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Bad Credit? – Good Karma – The Steps You Need To Know To Go From Negative To Positive

A few years ago my credit score couldn’t get me a metrocard!  Yeah that’s right.  I had no idea how to manage my credit, how important a credit score was to my future and how to dispute illegitimate charges and protect myself legally and financially.

How important is a fair to good credit score?  Exceptionally important.  A bad credit score can keep you from a job, bump up an insurmountable interest rate on a car loan, and will most probably keep you from obtaining any kind of mortgage.  Of course, this might not sound so bad if you live in the city and never have to worry about a car and live with your parents but lets face it, hardly anyone is going to have those same set of circumstances for the rest of their life.

By trial and error – and I mean a lot of error, I eventually figured it out.  Do you remember how many commercials spanned across your television for bill consolidation companies and bankruptcy lawyers?  Like a lot, a lot.  People really didn’t know where to turn or how to begin.  Here’s my story and what I’ve learned.

bad-creditMaybe it’s not as bad as you think.  Let’s work the problem.  The first step is to find out exactly what you’re working with.  If you don’t know your credit score, go to Credit Karma right now (IT’S FREE), set up a free account and fill out the necessary information.  It takes only a few minutes and it’s well worth it.  By the by, did I mention that it’s FREE?  (I’ll have the link listed at the end of this article.)

Once you find out your score, Credit Karma will break down all of your current loans, credit cards, etc., and explain your score in great detail.  You will know exactly why your score is what it is.  The scariest thing about credit is the entire mystery surrounding it.  Take the mystery out of the equation by arming yourself with the truthful knowledge of where you stand.

Once you’ve processed all of that information it’s only a matter of time before you start repairing your credit and strengthening your score.  My advice is for people who have a bad or low credit score and have the means to repair it, meaning you are employed, receiving steady income that exceed your bills.

If you’re drowning in debt and have no money to dig your way out, are unemployed and you’re having a hard time putting food on the table this advice will not be helpful to you.  You’re in a very bad spot and need many prayers and a plan to get your head above water first before you even begin to think about getting to this stage and quite frankly have other needs more pressing than fixing your credit.  My advice for that person would be entirely different and in fact quite shocking to many people as it would consist of getting into more debt.

My general plan for that type of situation would be to say lots of prayers and be open to looking out for signs and guidance regarding what direction to best set your feet to path.  Being very general now, I would advice anyone in these dire straights to take up a career course of 6 to 18 months – education can pull you out of the depths of financial hell.  Many schools that offer these medical or business admin courses will let you finance the tuition.  Go to the library, use their computers to do some research, drop by the schools and talk to their people.  This plan is general but after talking to God, it might be the best thing, if he so points you in this direction.

And so if that is not your situation, you’re already gainfully employed, can meet your bills and have a little left on the side but you’re credit score is crap and you’ve got some steep credit cards then step one: add all of your outstanding bills up, not your monthly bills like, food, gas, rent, etc., but your credit cards, loan payments, bills of that nature.

Once you’ve done that try to see if you can either obtain a bank loan for the total amount of all of your outstanding bills, (if you’re a veteran, you may be able to acquire help with this, speak to representatives at your nearest Veteran’s office or click Resources for Veterans get started.

Resources for Veterans

What you’re attempting to do is called consolidation.  You want to consolidate all of your bills into one big bill.  One is much easier to handle than 7.  If you have multiple credit cards, and one of the limits can contain the total of all of the credit cards together then call up your credit card company, explain the situation and see if they’re willing to work with you to help consolidate all of your debt into something more manageable.

Once you consolidate everything you can, get organized.  Make a spreadsheet or just write it down on plain paper; all of your bills, the minimum due and the due date.  Start paying everything off before the due date.  Pick the smallest bill, put as much as you can towards it until you kill it then move on up the chain.  In six months, re-check your credit score.  You should see an improvement.

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Remember, everything is a process.  Nothing worthy happens overnight.  You’ve got to put in the time, effort, prayers and work to get yourself back on track.  The hardest part, is the beginning.  I’m telling you this from experience.  This is exactly how my sailor and I went from being broke asses to acquiring decent credit.  So take it from me, YOU CAN DO IT!

Once you’ve gotten back on track remember how easy it was to run up your credit and try your best to see that you don’t repeat the same mistakes.  For some of us, it was a necessity.  For me, I was going through a period of unemployment and used my credit cards to live, buy food and necessities, etc.  In any case, once you’ve gotten your credit cards under control, set limits for yourself.  Use them because if you don’t, you won’t have any credit history and that’s just as bad and in some cases, worse than having bad credit history.  So utilize your cards and increase your purchasing power but make sure you pay them off in a timely fashion.  Set limits to how much you can spend so that you can comfortably pay off the balance at the end of the month, or in cases of bigger purchases, a couple of months.  No one can tell you how to self monitor, that plan is entirely up to you but I can guarantee you that being in control of your finances and spending puts you in a very good position when the time comes for you to make bigger purchases!

Click on the words below and it will take you to Credit Karma to set up your account and find out your credit score for FREE.

Credit Karma

If you’re having trouble with the link please type the following into your web browser: www.creditkarma.com

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