Bad Credit: The Long Road back to Stability

Headache Bad Credit

Whatever the reason you may have, when you have bad credit scores the path back to a better reputation is a long and hard one. Of course, every journey starts with one step and for financial problems, the first step means admitting you did wrong. You don’t have to dwell on these mistakes for too long; what matters is that you start thinking about the solutions to a low credit rating. There are a lot of ways through which you can do this, but they can be a little overwhelming. So to make it a little easier on you, here are some of the easiest means to fix up your credit rating.

Re-Checking your Credit Forms

The worst thing about credit reports is that there are so many pieces of paperwork to go through and so little time to work on them. This is why, sometimes, errors can be overlooked and numbers can go over their sums. So, the first thing you should try out before you accept your bad credit score is to re-check the numbers. While it would be wise to look up an accountant, you can still try to do this process on your own. Just make sure to triple check all of your forms just in case you missed something.

Look up the Age of Your Debt

In certain places around the world, governments impose a law which states certain debts can only last a set amount of years. If they go past it, it is in your full power to invoke the statute of limitations and end this debt through the help of your government. In certain cases, you can also ask to dispute the debt with the collector. If your dispute proves correct, then your debt will go away. Disputing debt is also a sure way to buy you a little more time because a company will need to investigate the claim. These are pretty efficient means to raise your low credit rating.

Get a New Credit Card

Credit Card

Okay, so this step may seem a little counterintuitive, but you have to bear with me. A new credit card means you’ll have the power to build upon your credit score. However, there are some rules you should follow. First off, your new credit card cannot go over the limit because that’s how you ended up in debt in the first place. You’ll also have to make your payments on time and preferably in full. If you’re having trouble finding a bank that will let you have a card, try local financial institutions. There are other kinds of credit cards you can look up, but those are dependent on what local businesses have to offer you.

Be Patient

settle your finances

Like most stories of redemption and rebuilding, fixing your low credit rating is a matter of patience. Since you started out in a bad place, it will take a while before banks start trusting you with their cards. The unfortunate truth here is this can take months and can even go on for years. However, as time goes by, you’ll see the negative impact of your rating lessen and even disappear over time. You have to be aware though; if your score is bad enough the wait will last at least 10 years.

Consider Bankruptcy

This is the last resort you should turn to because bankruptcy can bring its own set of negative consequences. First off, you lose all of your privacy when it comes to your finances. Everything you report and file will be made public. At the same time, you will have no credit score whatsoever, and that can be just as bad as a negative rating. Lastly, if you’re still paying off a mortgage, the bank has the right to take away your property if they see it fit. However, all of your debts will be wiped and debt collectors won’t be able to contact you for any reason whatsoever.

So after you’ve done all this, what’s the next step? Well, as was mentioned in tip number 3, you’ll have to restart your credit rating by getting a new card. After that, you’ll have to follow all the rules the bank sets before you. Once that’s done, it’s just a matter of paying your debts on time and soon enough, you’ll have a great rating which will set you back on track.

Photo Attribution:

Featured 1st image by David Castillo Dominici /

2nd image by phanlop88 /

3rd image by Stuart Miles /