Bad Credit Blog

If you have been having financial trouble for some time and wondered if there was any debt relief in your future then it’s time to cheer up, the answer is YES!

If you don’t get a handle on your past due accounts there is no hope for the future. We have been there ourselves, that’s why we built this site, to help others. So let’s look at some options.

First let’s get a handle on your credit card debt . If you are like most Americans you’re credit cards are maxed out! The average person in the USA has 11 credit cards according to the banking industry. Eleven credit cards are way too many; you should have not over two or three. If you are looking for debt relief and are considering getting rid of some cards the first rule is to get rid of the credit cards you have had the shortest time not the old timers. Part of your credit score is computed by how long you have had the credit card, thus a card you have had for 10 years is worth more than one you got yesterday for credit score purposes.

Of course, if the older card company is jerking you around and making you pay 30% interest then it’s better to get rid of the card. Just don’t throw away ALL of your older cards!

The easiest way to start feeling some debt relief is to pay more on the cards that have the highest interest first. Make the minimums on the others if you have to, but get those high interest rate cards paid down. Never just pay the minimum; you will never get out of debt. Keep chipping away at these till you have them paid down. It may take a while, but we know you can do it!

When you have the cards with the highest interest paid by approximately 40 – 50% call them and ask for an interest reduction. Tell them that you want to keep their card but unless they give you a rate reduction you are going to pay it off and cancel the card. They will in all likelihood cut the rate considerably.

Set up a budget and live by it. This is the true answer to debt relief. We have budget forms available on our site both the one-month and twelve-month, and they are FREE. They are easy to work with and will help you to see EXACTLY where your money is going each month (you’ll be surprised!)

What Do I Do If My Debts Are Too Far Behind And My Credit Card Companies Won’t Work With Me?

Let me say first off, try everything before bankruptcy. In 1989 – 90 I owned a business and took out an SBA loan so I could purchase a second one from a “friend” of mind, who I thought wouldn’t lie to me. Well, he misrepresented the facts about the business. He wasn’t making the money he claimed and it drained all our money from both businesses and forced us into bankruptcy and out of business – one of the saddest days of my life.

So when I say don’t declare bankruptcy if you can avoid it, I know what I am talking about. Our credit was ruined for 10 years. Plus the new bankruptcy laws won’t allow you to wipe the slate completely clean on credit card debt. So let’s explore another debt relief option. Credit Counseling Credit counseling is a way to get some debt relief and get your payments under control. With credit counseling you can pay off your credit cards in about three years. There are upsides and downsides to using a credit counselor though so you’ll want to consider these facts.

What does a credit counselor do? A credit counselor takes all your current credit debt and contacts the creditors to negotiate a “pay-off” amount. Sometimes they say they negotiate a “lower interest rate.” It’s the same principle. It lowers your monthly payments. Why will credit companies do this? For a couple reasons:

First – they are guaranteed a payment from you every month until the principle amount is paid off. And to their thinking, something is better than nothing.

Second – the credit cards are canceled so they know you won’t run up more credit debt with them.

You agree to cancel the cards and get set up on a payment plan. The credit counselor will collect the money each month in one payment and then pay each creditor their piece of it, so you don’t have to keep writing multiple checks.

Upside – Some much needed debt relief! And your payments are finished in three years.

Downside – Your credit score will not go up until you are finished paying off the credit cards.

If you’re not sure a credit counselor is right for your situation you can take our quick survey by clicking here.

Repairing Your Bad Credit

Once you have managed your past due bills, the next thing you will want to do is start to improve your credit score. Here are some steps you can take.

Order a copy of your credit report. Order all three. You can get them from free credit report.com here. At least 79% of the credit reports contain some errors according to the credit agencies themselves.

The LONG way to fixing your credit involves writing to the credit bureaus (one letter, one disputed item) and challenge any item that is wrong or outdated and ask them to remove it. They will contact the creditor and then make the decision as to what to do. Don’t be surprised if nothing happens in your favor.

The SHORT way is to use a credit attorney to get things moving. We recommend Lexington Law because of their track record in this business. As attorneys they know what it takes to clean up your credit report. Can you afford this? Absolutely! They charge a modest monthly fee with a 100% satisfaction guarantee if you are not satisfied! How can you afford not to!

Debt relief is possible, but only if you don’t procrastinate! You can do it, with a little effort and perhaps some help from a credit counseling agency. Good luck to you! Don’t delay!

For more credit help, please visit our site. We have been there and know how bad credit can affect everything, including your health. Take a look!

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I was talking to a friend of mine the other day, who I knew was drowning in credit card debt but working hard to pay it off. When I enquired how things were going he hemmed and hawed and finally told me it wasn’t going very well. He confided that instead of not using their credit cards for the holidays as he had told me was the plan, both he and his wife got into a competing match (it seems) to see who could outspend the other. Now my friend and his wife blame each other for their credit card debt. Any rational person knows this is a recipe for marital as well as financial disaster.

This got my wheels spinning because I have been in credit card debt in the past; maybe you have too and can identify with what I’m about to say. Here are some of the dumbest reasons for NOT getting out of debt.

1. It’s all (his or her) fault. Money is the #1 reason for divorce in this country. Instead of taking personal responsibility they play the “blame” game. One of you needs to provide some financial leadership. It’s not always the man’s job (or woman’s) it’s whoever has the best head for management. The other partner needs to cooperate.
2. Credit cards are the only way that I can get what I need. (Translated: want). What is really needed is a budget. It just takes a little discipline. In other words, you give yourself an “allowance” to spend on things you WANT, then use everything else to pay for everyday living AND to pay off yoru credit cards. If you are in credit card debt too deep then you will benefit from a good credit counselor . Many times this is the only way out.
3. Spending makes me feel so good. I’m not a psychologist but I have read of people that get a high from spending. There’s also a section of people who get the same feeling from shoplifting. If you fit this get professional help. Someone told me that they feel “free” when they spend. They are lying to themselves, they are not free, but rather a slave. Don’t be foolish!
4. If I get too deep, I’ll get another credit card with 0% and transfer the balance. Well, duh! That’s so unintelligent that I won’t comment!
5. I’m not paying “that” much in interest. Oh, really! If you run an average credit card debt of $6,000 - and if that amount remains level for a year and your interest is 21% you are spending approximately $1500 in interest charges alone! AND that’s just for one year. Einstein’s definition of insanity is “doing the same thing over and over expecting different results”. Still think you don’t need help? You need to contact a credit counselor Immediately!
6. I don’t think I can ever afford to retire; besides I love my work. I’m not sure our Creator ever intended us to completely retire as we see it done today. But consider what would happen to you or your family if a disaster should happen. Recently the bottom fell out of the real estate market and property values fell dramatically. If you were laid off your job you may not qualify for a home refinance. Think about that next time you head out to the mall!
7. I’ve lived on credit cards for so long that I don’t think I can live without them. You CAN and you MUST if you ever want to be free. There is nothing wrong with using a credit card occasionally for an emergency. However a night out is not an emergency! If you can’t handle a credit card responsibly, then don’t carry one.

Let me make a confession; I am no different than you, so I don’t carry my credit cards on a regular basis. I carry a debit card only most of the time and always know exactly how much I have in my checking account so I don’t overdraw.

If you need help with your financial world we can help. Whether it’s mortgage refinance or a 1st time homebuyer with no credit or bad credit, pre-qualified auto loan , auto insurance for people with bad credit. Whatever your need, we have answers.