When it comes to bad credit, you don’t just sit there and let it affect most aspects of your finances. To stop it from haunting your loan, credit card and even mobile phone contract applications, it’s time to put your foot forward and fight back. The only way to beat bad credit and its side effects is to plan an aggressive and strategic offensive. You may feel helpless and overwhelmed just thinking about the matter but if you’re ready to live without bad credit causing havoc in your life, below are some things you can do:
Face the Music
Like with any problems, the first think you must do to overcome bad credit is to face the music. Unless you face your debt head on, you may never a fighting chance to get out of the debt trap. Get the lay of how bad your credit history is by doing the following:
- Check Full Credit Report – Your credit score only tells you whether you have a good or a bad one. It doesn’t detail the cause of said score. To know the full story, you must check your full credit report. The report will tell which specific financial decision or credit products contributed to the state of your credit rating.
- Check Recent Credit History – In addition to your full credit report, you should also pay attention to your credit history for the past year. Most lenders consider the last 12 months more important than the earlier part of your history. If you’ve been a consistently good payer the past year, lenders are likely to consider that when assessing your reliability.
Device an Offensive Plan
When dealing with debt and bad credit history, you need a detailed plan to overcome the problem. Asking for professional help may be necessary when your situation is too complex for you to handle. A good financial advisor should be able to assess your situation and also provide a comprehensive plan to kick off your fight against bad credit history.
Even with professional help steering you to the right direction, doing your own homework is recommended. Taking the time to research about financial jargons, concepts and strategies will come a long way. Education, after all, is your best offense when it comes to financial problems such as bad credit.
Prepare to Negotiate
While being aggressive with your offensive plan is what you need to fight against bad credit, you must also leave room for negotiation. If the situation calls for it, prepare to take out your negotiating skills and strike a deal with your lenders. Most lending companies are actually not as evil as borrowers claim them to be. If you ask, they’d be happy to work out a new arrangement that will be comfortable while they still earn their keeps. Just make sure to have the new arrangement detailed in writing to avoid any form of misunderstanding later on.
Patience is the Key
In the same manner that you did not earn your bad credit score overnight, you will never magically solve the problem in a snap. The first years of your fight against bad credit is going to be fraught with struggles and complications. You’ll get overwhelmed from time to time. You might even want to give up in the middle of everything. When the going gets rough, patience is the key. Stick to the plan and wait it out. As you commit to repay your debts consistently and regularly, it will eventually show in your credit rating.
The Last Resort
When all else fails, the last resort and weapon against bad credit, creditors and pesky debt collectors is bankruptcy. Filing for bankruptcy would seem like surrender for many. That’s true but only to a point. When you’ve tried everything from seeking professional help to putting up an aggressive and offensive fight as well as negotiation but to no avail, it’s time to step back and consider bankruptcy. Bankruptcy is a financial tool you can fall back on when your efforts are not solving the problem. It may reflect on your financial history for years but it will give you a fresh start which you should use smartly.