There is no doubt that if you live long enough on this earth, you may encounter some hard times. Even the most famous, influential people have been gone through financial strain at some point.
Dwayne “The Rock” Johnson had $7 to his name before he made it big in Wrestling. Both Tyler Perry and Steve Harvey, each, lived out of their car for a period of time. Barbara Corcoran from Shark Tank failed at 22 jobs before she decided to borrow $1000 and pursue her dream in real estate.
Whenever you go through financial hardship, your credit can take a big spiral downward. This can be detrimental to your future.
A lot of you might ask, how do I repair my credit?? Remember that repairing credit is like losing weight. Its not easy and it does not happen overnight. If you ever come across a program that “guarantees” quick credit repair, run in the opposite direction.
These schemes may do more damage to your credit. The best thing to do is patiently manage it over time. Notice the key word, patience. Here are some steps that you can do to help get started on your road to recovery.
Steps To Help Repair Your Credit
- Check Your Credit – How do you know what your credit score is?? The best way to find out is to run a free credit report. This will give you an updated credit score and allow you to check to see if there are any errors. You want to keep an eye on this because if you find errors, report them to the credit bureau.
- Reduce the Amount of Debt You Owe – This is something that I am working at myself. Debt can easily be accumulated, especially if you have a credit card. Its so easy to just pull that card out to pay for whatever it is that you probably don’t need at the moment. If you have debt from several areas (credit cards, car note, student loans, etc.), select which one you owe the most interest on and start to pay that section first. Meanwhile, keep making the minimum payments in the other accounts. Oh, and be sure to cut up ALL credit cards!! That is what got you here in the first place. As hard as it is, try and start paying with cash.
- Setup Payment Reminders or Automatic Bill Pay – Paying your bills on time is one of the best ways to contribute to your credit score. This will improve your score and will help maintain a high score. Set reminders to make payments on time or you can do like I do and enroll in automatic bill pay. This way every month, I don’t have to worry about what is due on what date. It is automatically deducted from my account. You can set this up through your bank.
Once you get your credit back up to a viable score, you should do everything you can to keep it high. Remember all the difficulties and stress you dealt with when your credit score was low. This should be a constant reminder in your head that you are going to do whatever you can, not to visit that place again.
Here are some tips to help you maintain good credit:
- Pay your bills on time
You would be surprised how much damage paying your bills a couple of days late can do to your credit score.
- Stay up to date on your payments
You forget something, and emergency comes up, it happens. If you forget to pay a bill, make up for it and be sure to stay current. Staying current with your bill payments is a great way to keep a high credit score.
- Paying off a collection account doesn’t remove it right away
Once you pay off a collection account, it takes 7 years for it to comes off your credit report. That’s seven years that you will have a negative cloud lingering over your credit. That is hard to recover from.
- Having trouble paying your bills
If you are having trouble making ends meet, contact your creditors and let them know. They might be willing to work with you on a payment plan that is more suitable for your financial situation. Something is always better than nothing.
- Keep your balances low on your current credit cards
Once you get those balances low on your credit cards, do everything you can to keep them there.
- NO NEW CREDIT CARDS