Monday, August 6, 2012

Want to fix your credit? Here's the 1st step!

Having bad credit at an early age was both a pain in the butt, yet a blessing in disguise. Once I learned how to climb my way out of the mess I created, I learned invaluable lessons that stood with me. In no way do I claim to be an expert at repairing credit, this is just a very detailed account of the things I did in order to fix my credit and get out of debt.

Get your credit reports from the three credit bureaus, Trans Union, Equifax, and Experian from Also obtain you FICO score, so that you know where you stand. You might have to pay for it, but if you have an American Express card they might offer it to you once a year at no additional charge. Once I saw how much debt I was in, I had to make some lifestyle changes in order to pay down my debt. I'll go through those steps in later posts. Once I had my credit reports in hand, this is what I did.

Write down all of the debt from on each card with the interest rate next to it. Don't get emotional about what you are looking at. In order to get through this, which is very possible, you need to be strategic.

Call each of your debtors and find out if they are willing to negotiate a debt settlement. Let them know that you want to make good on your debt, but you need them to negotiate within your means. The only thing they can do is say "No", but if you are able to come to an agreement, you might be able to save both money and time. *Please note: I do not have any experience with Student Loans. Check out the Student debt repayment assistant at Consumer Financial Protection Bureau. I've never used it, but Suze Orman speaks positively about it and I trust her financial opinion.

Start to pay down on your debt. Rule of thumb: pay down as much as you can afford to the card with the highest interest first while only paying the minimum on your other credit cards. Once the 1st card is payed off, take the money that you were using to pay the 1st card and combine it with the 2nd card. When the 2nd card is paid off, take the money from the 1st and 2nd card and pay off the 3rd card. You see the pattern? As time goes on, your debt will go down and credit will improve.

There are no quick fixes at turning bad credit into good credit. As time goes on you will establish good history. Whatever you do, don't ignore the problem. You're wages can be garnished. Your student loans debtors can take your income tax returns. It's much better to address the issue taking the offensive approach rather than a defensive one. You should also know that you do not have to be harassed. Take a look at the Cease and Desist Letters from

The next blog topic will discuss, how I found the money to pay off the debt.

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