One day you realize that you are in a serious personal financial disaster situation. If you want to avoid a situation that is so out of control there is no way out, you need to make the effort and take the time to get your money management and credit use habits back on track. You don't need to rush into "debt consolidation" or "home equity loan." You can work out a strategic repair plan for yourself.
You will start by collecting all your credit reports, bill payment statements, and credit card statements, mortgage and insurance records. Locate debt worksheets on the internet to help you work. All of these steps will be taking place at the same time.
Be meticulous about ensuring that your credit reports (there are 3 major credit reporting agencies) are accurate and truly reflect your credit status. To complete this project may take some written communications with one or all of the credit reporting agencies. Stay with the process.
Record in black and white all of your financial obligations. This will affect the money management part of the plan. Do list all credit cards in order of highest to lowest interest rates. Also include the monthly minimum payment required for each card.
Now need to know your DISPOSABLE AND DISCRETIONARY INCOME. These "d" words are significant for your plan. Disposable income is the amount of money that comes out of your salary to cover necessary obligations like mortgage, food, utilities, insurance, car, credit cards. Subtract total disposable income from salary, you have discretionary income, the amount to be applied to debt.
Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won't be a fast process.
There will be some personal discomfort as you tackle this project. There will need to be changes in your lifestyle. You will need to cease purchasing that is not essential. You will need to stop charging, pay bills on time, minimize travel and entertainment, dine more at home and perhaps give up other indulgences.
The bottom line of the situation is that you are responsible for creating it. There is no credit angel. You need to fix it and use smart money management techniques to maintain your repairs. - 16492
You will start by collecting all your credit reports, bill payment statements, and credit card statements, mortgage and insurance records. Locate debt worksheets on the internet to help you work. All of these steps will be taking place at the same time.
Be meticulous about ensuring that your credit reports (there are 3 major credit reporting agencies) are accurate and truly reflect your credit status. To complete this project may take some written communications with one or all of the credit reporting agencies. Stay with the process.
Record in black and white all of your financial obligations. This will affect the money management part of the plan. Do list all credit cards in order of highest to lowest interest rates. Also include the monthly minimum payment required for each card.
Now need to know your DISPOSABLE AND DISCRETIONARY INCOME. These "d" words are significant for your plan. Disposable income is the amount of money that comes out of your salary to cover necessary obligations like mortgage, food, utilities, insurance, car, credit cards. Subtract total disposable income from salary, you have discretionary income, the amount to be applied to debt.
Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won't be a fast process.
There will be some personal discomfort as you tackle this project. There will need to be changes in your lifestyle. You will need to cease purchasing that is not essential. You will need to stop charging, pay bills on time, minimize travel and entertainment, dine more at home and perhaps give up other indulgences.
The bottom line of the situation is that you are responsible for creating it. There is no credit angel. You need to fix it and use smart money management techniques to maintain your repairs. - 16492
About the Author:
With unprecedented problems in the credit markets it?s more important than ever to have excellent credit. For more information check out Rob Kosbergs' Detailed FREE Guide on Maintaining and Repairing your Credit Score by going to Bad Credit Repair for your FREE information.
