Devise your own Credit Repair Plan
You have reached the point in your life that you realize that you need to make some drastic changes in how you manage your spending and credit before you reach the point of no return. You do not want to rush into "debt consolidation" or use a home equity loan. You need to have a plan that is worked out very carefully.
Round up all credit reports, bill payment and credit card records, loan and mortgage records. You can find debt worksheets on line that will assist with making your plan. Most likely sections of your planning will be occurring at the same time.
Remember that there are 3 major credit reporting bureaus and you need all 3 reports. You must make sure that the reports are accurately reflecting your credit profile. Be like a bulldog and hang on. This will probably take some written communications between you and the agencies.
Record in black and white all of your financial obligations. This will affect the money management part of the plan. Do list all credit cards in order of highest to lowest interest rates. Also include the monthly minimum payment required for each card.
After this, you are going to look at the picture of "disposable income" and "discretionary income." What are these? You have a certain amount of your salary that pays for your necessary expenses such as loans, utilities, mortgages, insurances, and credit cards. This is disposable income. Subtract the total from salary and this is discretionary income which is the amount you have to assign to reducing debt.
Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won't be a fast process.
To immerse yourself in this change of pattern of handling money, you need commitment and will not feel comfortable for awhile. Lifestyle changes are needed. You will need to cease unnecessary spending, buy only essentials, avoid travel, eat at home, pay bills on time and stop charging.
The bottom line of the situation is that you are responsible for creating it. There is no credit angel. You need to fix it and use smart money management techniques to maintain your repairs.
Round up all credit reports, bill payment and credit card records, loan and mortgage records. You can find debt worksheets on line that will assist with making your plan. Most likely sections of your planning will be occurring at the same time.
Remember that there are 3 major credit reporting bureaus and you need all 3 reports. You must make sure that the reports are accurately reflecting your credit profile. Be like a bulldog and hang on. This will probably take some written communications between you and the agencies.
Record in black and white all of your financial obligations. This will affect the money management part of the plan. Do list all credit cards in order of highest to lowest interest rates. Also include the monthly minimum payment required for each card.
After this, you are going to look at the picture of "disposable income" and "discretionary income." What are these? You have a certain amount of your salary that pays for your necessary expenses such as loans, utilities, mortgages, insurances, and credit cards. This is disposable income. Subtract the total from salary and this is discretionary income which is the amount you have to assign to reducing debt.
Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won't be a fast process.
To immerse yourself in this change of pattern of handling money, you need commitment and will not feel comfortable for awhile. Lifestyle changes are needed. You will need to cease unnecessary spending, buy only essentials, avoid travel, eat at home, pay bills on time and stop charging.
The bottom line of the situation is that you are responsible for creating it. There is no credit angel. You need to fix it and use smart money management techniques to maintain your repairs.
About the Author:
With never before seen challenges in the credit markets it?s more important than ever to have excellent credit. For more information check out Rob Kosbergs' Detailed FREE Guide on Maintaining and Repairing your Credit Score by going to Bad Credit Repair for your FREE information.
posted by Credit Counseling at
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