Bad Credit now what

Overcoming bad credit in a five-stage journey

‘The mass of men lead lives of quiet desperation’. While it is unlikely that Henry David Thoreau’s famous words penned in 1854 were a testimony to the scourge of bad credit felt by so many Americans today, it is no exaggeration to say that bad credit can result in quiet desperation. You do not, however, need to take bad credit lying down. Consider the following 5-stages to overcoming bad credit.

1st Stage – Review Your Credit Report

Reviewing your credit report is the first step to overcoming bad credit, because you need to identify exactly what’s on your credit report before you can take steps to fix the problems.

2nd Stage – Correct Any Errors

Credit reports often contain incorrect information. After reviewing your credit report, identify any errors and report them to the relevant institution. If misinformation is standing in the way of your good credit history, do not be shy about disputing it.

3rd Stage – Reduce Debts through Consolidation

In today’s economic climate, there are many companies eager to help you consolidate your debts with a debt consolidation mortgage loan for a price. The price is a higher interest rate than most mortgages, but it will still be much lower than your credit card interest, so a consolidation loan is a key step toward reducing your monthly repayments and establishing good credit.

4th Stage – Eliminate Outstanding Debts

While you cannot change the past, lenders give more consideration to your recent payment history than to the events the contributed to the debt years ago. Consequently, the next step is to identify any outstanding debts in your credit report and repay them as soon as possible. Some great ways to pay off those outstanding debts are to have bills automatically deducted from your bank account, or take advantage of modern technology by paying them online as soon as they arise.

5th Stage – Behavioural Change:
One Card, Monthly Repayments, Savings Strategy

This 5th stage is by far the most challenging step in the recovery from a bad credit history, because is requires a fundamental behavioural change:
Firstly, get rid of all but one card, which is more manageable and easier to track. Make only small convenience purchases on the card and pay it off in full each month. This requires a lot of self-discipline, which can be painful, but it demonstrates to lending institutions that you can manage credit wisely.
Secondly, make sure you pay off the debt every month to limit your interest charges.
Finally, since your monthly debt repayments should be lower with your consolidation loan, save the extra money and put it into a savings account for emergencies.


Overcoming bad credit is like overcoming bad habits it takes time, effort, perseverance and copious amounts of self-control. Bad credit is not, however, an insurmountable challenge, and this five stage journey will see you well on the road to financial recovery.