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REDDITCredit is how our modern economic system works. We borrow to maintain a certain lifestyle and as long as we pay back the monies we owe along with the interest that accrues, the system works great. But when we either borrow too much or don’t pay it back on a timely basis, we can run into trouble. How do you know when you have a bad credit rating or credit score? You can check, but usually there are signs of problems. Missing payments is one sure sign that you have credit and money problems. So, too is going over your limit.
One rule of thumb around credit is that it should not be stopping you from enjoying your day to day activities. If your monthly payments are too high or if you have multiple credit cards that you use to pay off against each other, that is certainly not a good thing. Neither is having the bank or credit card company calling you or even worse collection agencies, hounding you to pay back the money you owe. If you are trapped in a bad credit crisis you can get help and counselling. You can also start today to improve your bad credit and get back to really enjoying your life instead of worrying about your bills.
Here are 10 tips to help you improve your bad credit.
Know what you owe
Get copies of your credit reports. You can order them online from all the major credit rating agencies. This will tell you where you stand and what you currently owe. Are you in serious trouble with any creditors?
Know what you spend
Write down everything you spend for a week. Then do it for a month. But at least you will see where your money is going. It will help you identify things you can cut out and to make a budget later.
Stop making it worse
If possible, stop using your credit cards immediately. Cold turkey is hard, but effective. Pay for your everyday expenditures but nothing else. No clothes, no music and no eating out until things get better.
Talk to someone
Get help. Talk to a financial counsellor, or seek out a credit counselling service in your community. They can help you sort out fact frim fiction hen it comes to credit.
Make new habits
Start doing things different right away. One thing to do is to make more than the minimum due on your current credit cards. You will not just be paying interest, you’ll soon see the balance go down faster, card by card.
Start with the biggest problem first
Who is calling you right now looking for their money? Deal with them first. They may not be the biggest amount you owe, but if they are calling they are your biggest problem right now. Deal with them today.
Find new strategies
Try and figure out where you went wrong and develop new money strategies to replace the ones that got you into trouble. Talk to your family and friends who have good credit and do what they do.
Set new goals
Set a goal of being debt-free in by a point in the future. Maybe look at two years down the road. Than make a budget and a financial plan to make that goal actually happen.
Make a plan
Making a budget is simple. Track your current expenses closely so you can see what you spend now. Then build your budget by adding essentials like housing, food and getting to work first. Match your income to your reality.
Stick to the plan
To fix bad credit you must stay on top of it. Monitor your spending on a continual basis. Keep track o your budget and adjust if problems arise. Plan ahead and make it happen.
