A credit score is more than a number and at times can misrepresent you or put your scandalous business out on the street. Who’d knew that those 3 numbers standing so close together, could mean so much. Well as a recovered bad credit veteran, I am living proof that there is hope and that with patience, money, and time you can make that bad score look sexy again by…..
1. Police the hell out of your credit report. You would be amazed of the amount of people who never look at their credit report until they are about to purchase a big-ticket item or try to pre-qualify for a home loan. Do yourself a favor and pull your credit report and go through it with a fine tooth comb. It’s very possible that you will be amazed of what’s on it. Fact…correcting the mistakes and paying off forgotten judgments and past due bills will help increase your score.
2. Start paying your bills on time. Paying your bills on time equates to creditors having proof that you actually have the capability to pay your bills on time….imagine that. Not only is it a great way to establish credit worthiness, but you may adopt something even more precious, which is the habit of paying your bills on time. I know….what a great habit to develop. One that can actually improve your quality of life.
3. Slowly pay down your debt. The rule of thumb about your debt ratio is to keep it under 30 percent to prevent any negative effect to your credit score. My theory…why stop there? Why not push the envelope to achieve a debt ratio of zero percent? Yes people…becoming debt free opens the door to save more money and build wealth.
Don’t let your credit score define who your are…
– Recreate your credit history. Overtime good financial habits will erase the bad and offset past delinquencies such as bankruptcies, foreclosures, and late payments.
– Your bad credit life can be a temporary situation. Keep in mind that even though you may have to pay ridiculous interest rates, or use alternate methods to get credit, that overtime your bad credit score life will subside. Maintaining a positive outlook, and accepting that your financial situation is only temporary, can go a long way.
– Recreate your script for your life. I am a firm believer that a person should at least reinvent themselves at least once in their lifetime. Getting your finances in order is a great way to start on this type of journey and can give you the financial space to help fund what you really want to do with your life.
There are various reasons why people begin to live the bad credit life, and it’s not always because they have bad financial habits. For many it could be life pitfalls such as death, divorce, or a failed business. The reality is that life has a way of throwing a person a curve ball, and in a blink of a second you just have to swing and watch where the ball falls. Then hopefully you can run like hell, in pursuit of home base…
So are you there yet? Are you at home base?