It is said that only a foolish man [or woman for that matter] never learns from their mistakes. but those who are wise, and have been hurt by their errors of the past learn quickly. This is never more true when it comes to the subject of bad credit. When one has bad credit, your whole life could be affected in so many ways.
For instance, bad credit means that you cannot apply for the things you once applied for. Credit cards, mobile/cell phones, mortgages, purchases of cars, etc etc. Even trying to open a bank account will all be almost impossible if one accrues bad credit. To be refused higher purchases because your credit rating is not high enough, can be a most embarrassing thing to have to contend with.
With that in mind, how does one then go about learning from your errors of the past? The means is simple, but the act can be so hard to do. To learn about how not to accrue bad credit, you must first train your mind into a whole new mind-set. To do the complete opposite of what you did before
So, in order to overcome bad credit of the past, we must learn how to shop sensibly. It is always better to save up for that thing you want rather than deciding to buy using higher purchase – which would mean building up bad credit when your payments are late…or when you do not pay at all. You must also decide whether or not you really need that item you want to buy. And that is the crux of the matter…do you want that item, or do you need that item?
There is a difference between the two, and although many people can differentiate between the both of them they will continue to buy items on higher purchase,items that they do not really need. Obviously this is not good in the long run, as it wastes money that could be better spent on something else. And also, as explained it could earn you bad credit in the long run.
Late payments of any bills that you owe, are looked upon seriously. You will be penalised by building up bad credit against your name and address. Always try your utmost to pay your bills on time as late payments [30 days or over] could see you not only having to pay the full debt but the interest too.
Reduce the number of credit cards you carry – if any. It would also be a good idea if you contacted your creditors – this would be to tell them to close your account. On doing this contact the credit report agency, explaining to them your change in status. Avoid, at all costs, going into bankruptcy [ as this will stay on your name for 10 years]. Your ability to purchase on credit will be zero, so only in the most extreme circumstances should you think about bankruptcy.
When you contact your creditors, do so in writing, requesting that they reduce the amount of money you owe. Contacting them early and explaining your situation [rather than hiding away] is always the best policy. Nine times out of ten, your creditors will appreciate you letting them know about your situation and will come to some kind of agreement with you to reduce the bill.payments you owe. If they agree to do this, always ask for it in writing, as that will then become a legally-binding document. on their part as well as yours.
In order to reestablish your credit rating keep a set amount of money on a secured credit card, and make the payments on time, every time. Make sure that there is enough money on that card, not only to cover the bill, but to cover the charge of the card also.
Only by doing such measures now, will it save you from financial pain later. By taking back control of your money [rather than your money controlling you] you will set yourself up for a healthy financial future.