Learning Everything About Credit-Part 3-Things to Do When You Have Bad Credit

This is the wrap-up on the 3-part series of "Learning Everything About Credit." The last series will focus on what to do when you have bad credit. In the previous two parts, we discussed everything from the importance of credit to credit cards and credit reports.

There are many reasons why many people have bad credit. But whatever the reason is, there is always hope in repairing your credit and getting your life back on track. Here are a few things that you can do:

• Check your credit report for discrepancies: You should get in contact with any of the three credit reporting agencies (Transunion, Experian, Equifax) and provide them with the following information:
• Name and address
• Check off the item(s) that is(are) incorrect
• Give documents to back up your claim
• Ask that the checked-off information be investigated and corrected
• For more information on correcting your credit and learning more about your rights, you can visit www.consumerfinance.org
• Find out the reason for you having bad credit: There could be many reasons--it could be anything from having low income to moving around and changing addresses on a frequent basis, or the most common---having too much debt.
• Getting your finances and your life back in order: You can begin with paying your bills on a timely basis. When you pay your bills on time, you are looked upon on being a good credit risk.
• Keep your debt at a minimum: If the majority of your monthly income is spent on paying off additional debt, then creditors will be very skeptical of extending credit to you.
• Do not have many credit accounts open: Cannot stress this enough--many people think that having many open accounts are a good thing--think again, it is the total opposite. As a result, you are more likely to get in way over your head and get deep in debt.
• Show those creditors that you are financially stable and creditworthy: If you are constantly changing addresses and/or employment may have a negative impact on your credit rating.
• Use a small portion of your available credit: Creditors want to see that you use your credit when necessary--not to the point of maxing out on your credit cards.

There are times when you may need more help--I mean to the point when you will have to take extra measures to repair your bad credit. The last resort should be filing bankruptcy. (Unfortunately, I had to file bankruptcy eight years ago-I had gotten way over my head due to being involved in a domestic violence situation two years before I filed bankruptcy). Anyway, before you have to resort to bankruptcy, you should get in contact with your creditor and explore which options you can take to resolve your credit situation. You can contact the National Foundation for Credit Counseling (www.nfcc.org or call 800-388-2227. They can assist you to find the nearest Consumer Credit Counseling Services in your area.

If you follow these few things on repairing your credit, then you will be on your way to stellar credit.

I will talk to you later. Until then, Happy Saving!

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