What do you do when you have a bad credit score? Panicking will not solve anything and if you can take this problem without any assistance, you can surely do the credit repair yourself. But how do you do that? The first step is to find out what is written on your credit report. Is everything there correct? Should there be discrepancies, send a letter to the credit agency together with the supporting documents. That way, they can make the changes and this will be reflected on your credit report. If there is nothing wrong with the report and you have a problem paying your creditors, it is best to inform them at once so they know what is going on and a deal can be struck. To them, they would much rather that you pay a certain amount rather than nothing each month. This is because even if they can take the matter to court and they do win, you will still not have enough money to pay for what you actually owe them and in the end, they do not get anything out of it. The agreement you struck must be made in writing so you have something to show in your defense should any problems arise in the future. Since they will keep their part of the bargain, just make sure you do your part. To do that, you need to create a budget and make sure you are saving enough money to what you agreed to pay. You may have to cut down your shopping expenses and eating out for quite some time. Whatever you earn should be used only for the essentials like bill, gas and groceries. Minimize the use of your credit card. As much as possible, pay for items with cash. If you need to use your credit card, monitor how much you can only spend monthly so the money you already owe does not get any bigger. If you have more than 4 credit cards, try cutting them down to only two. The ones which should go are the ones that have high interest rates and those that were less than 6 months old. At the same time that you are paying off your debt, it will be a good idea to get a secured credit card to continue building up your credit history. This type of card is unique because you already have the funds in the bank and this will just be deducted every time this is swiped in a card terminal. Since banks will not give you a loan when you need cash, join a credit union. You will soon have a good credit rating if you are able to stick to the plan for the next few months or years. Remember, your payment history has the heaviest impact on your credit score. Credit repair is being able to pay what you owe gradually is much better than filing for bankruptcy. This is because it will be on your credit for the next 10 years so why put yourself in that situation when you can do something to change it now. All it takes is some will power and guts to face it head on. Remember, you put yourself in this situation so find a way to dig yourself out.
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