A bad credit history can haunt your life for a long time. You might have only made one money mistake that just escalated more and more. Or, you never properly learned about money and became a reckless spender. You bought anything you wanted because you didn’t understand that there is no free lunch. Hopefully now you understand what you did and the consequences you’ll face. Those consequences include a bad credit history that will make near impossible to get a loan anytime soon.
Now you regret what you’ve done. Don’t worry, you didn’t ruin your future. Sure, creditors don’t trust you very much and it’s unlikely you’ll be able to get a mortgage loan, car loan, or good credit card, but you can turn things around. Start by paying all your bills on time. Anything you regularly have to pay for will affect your credit history. Up until now, it has affected it adversely because you didn’t pay for everything on time or at all. But now, you can make a positive change.
Pay for your cell phone, rent, utilities, and every bill you have on time or early. Even one day late can be bad. If you try to pay everything at least a week early, you can be safe. Also, make sure you pay your credit cards, preferably more than just the minimum, every month, and don’t charge anything more too them! If you feel like you can afford to do all this, you need to take a hard look at where your money goes and start to budget.
Once you feel like you have a hold on your finances and are quickly paying off your debt, you can move on to other ways of repairing your credit. If you still have a large sum of debt, not including a mortgage, you should concentrate on paying it off as quickly as possible. When you are ready, you can begin to prove to creditors that you are financially responsible. By getting a credit card that is designed for people with bad credit, you can do this.
Be aware that these credit cards are not pretty. They have high interest and lots of penalty fees and other fees. As long as you pay the balance in full every month, you will avoid the interest rate and penalty fees, which will make it all bearable. Of course, you must pay it in full every month anyway, if you are trying to repair your credit. Start by just charging one thing to it every month so that you don’t go overboard. For example, for the first 3 months, only use your card to charge gas. This way, you won’t overspend.
As you move forward with your credit reparation, stay positive. Don’t worry that you will never be able to get a reasonable mortgage or that your dream small business is completely out of reach. Keep working at it and check your credit score every so often to check your progress.
