Tricks That Can Help You Climb Out of the Bad Credit Hole

Bad credit can hold you back from doing things like buying a car or house or renting a house. It can even affect what kind of jobs you’ll likely be able to get. 

However, having bad credit isn’t the end of the world. You can still fix it. If you have found yourself in a bad credit hole, you can climb out of it by utilizing the following tricks.

Pay More Than the Minimum on Your Credit Cards

Maxing out your credit cards can really tank your credit score. Ideally, you want to utilize less than 30 percent of your available credit. You can improve your credit by paying more than the minimum payment on your credit cards each month. 

This will allow you to pay them down faster and lower your utilization overall. Even paying a few extra dollars each month can help you pay off this debt a lot faster.

Get a Part-time Job

It’s not uncommon for many individuals to not have any extra money left over that they can use to pay off some of their debt. If all your money is going towards bills, then you may want to consider getting a part-time job. 

By working just a few hours a week, you can earn the money that you need to get out of debt a lot faster than you would have otherwise.

Negotiate With Debt Collectors

If you aren’t able to pay your debt for several months, those that you owe may seek the assistance of a debt collector in order to try to collect the money that you owe them. 

While it can be scary to get a notice in the mail that a debt collector is now handling your debt, you may find that they are willing to work with you. 

Many debt collectors will allow you to make payments on your debt for an extended period of time. If you have a lump sum of money available, you may be able to settle your debt for a fraction of what you owe them.

Seek Credit Repair Services

It can be difficult to repair your credit on your own. This is why many individuals seek credit repair services. They can look at your circumstances and credit profile to give you specific advice as to how you can climb out of the bad credit hole.

Bad credit may feel insurmountable, but there are plenty of things that you can do to climb out of this hole. Though it’s easy to be overwhelmed and to try to ignore your debt, it’s important that you deal with it and that you commit to paying it off no matter how long it will take. Once you pay off your debt, you’ll see your credit steadily grow over time.

Financial Recovery Tips for People and Businesses Hit by the COVID Economy

Over the past year, tons of lives have been disrupted. Despite the hard times, sometimes it is all you can do to pick up the pieces and keep moving forward. Otherwise, how else would things go back to normal? 

Thankfully, with the right approach, you can return to full steam. Plus, if you got a little bit of luck, you'll be even better off than you were before. If you’re looking to improve your circumstances after personal loss (whether financial, personal, or health), here are some ideas to consider about steps you can take to reset and try again. 

These tips are equally applicable to households as well as businesses, so let’s get started.

Evaluating Your Present Circumstances

To begin, you've got to take a good hard look at where you and your business are. Getting an outside perspective can also help you see things from another angle. Having a clear picture of where you are versus where you want to be can help you think about what you need to do to get to the place you want to be. 

Look at your circumstances, get your bearings, and then you can choose the path forward. Financially speaking, make sure you are familiar with your bills and how they are paid. 

Often, one person in the family or business manages the budget, but if more people are aware and at least know where their money is and who it goes to, it can take a lot of the insecurity that comes from not knowing.

Write Your Budget Down on Paper

Start by listing all your monthly expenses on paper. Following that, add up all your income as well. Now, try to make both sides of the equation balance. If you have less income than your expenses, you've got to make some major changes.

If your business is a brick and mortar company or a restaurant that relied on foot traffic or a dine-in experience, a pandemic and shutdown would certainly explain a loss of revenue. Is there a way that you can pivot and bring your product to your customers instead? 

Seeing your budget in front of you would help tell you what you can or can’t try to do and how much time you have to try new ideas.

Of course, if someone in the home has lost a job, that would explain a deficit. Still, until they are employed, you'll have to figure out how to balance the budget. 

You’ll never know when you or another member of your household will get hired again, so while looking for jobs, it is wise to try to cut bills or spending on non-essential purchases as much as possible.

Are There Areas Where You Can Reduce Your Expenses?

Often, we have tons of unnecessary expenses that come out of our bank accounts each month. Most of the time, these charges occur without anyone realizing it. 

Since they automatically debit the account, it could be from a subscription service you haven't used in years. Maybe you only use it rarely, or it’s a subscription to a magazine or video game service.

Often, businesses must cut discretionary spending as a way of saving money. This can mean temporarily reducing or eliminating spending on company parties, team lunches, company benefits, or anniversary gifts. 

After all, the little (or not so little) things are cut. If there’s no way to keep going, sometimes it means laying off employees. This can be a difficult process, and for small businesses who don’t have a large staff, it can be impossible to do, but it must be considered since nobody will have a job if the company shuts down.

Would Increasing Your Income Be Possible?

Adapting and diversifying your income streams in business can be essential in times of change. Saying that on paper is easy, but executing it is often more challenging. Companies with a narrow niche are more likely to fail if they can’t adapt to a changing market. 

For this reason, you should consider how you can add to your products or services in a way useful to people. If you run a food truck, what if you could do catering? Can your department store begin shipping to customers who purchase things online? Can you make use of freelance delivery drivers to bring products to people in your neighborhood?




At home, perhaps, you are already on a shoestring budget. If that happens to be the case, then you might consider trying to supplement your income. Have you thought about ways to make money on the side? Also, if anyone in the home could pick up a job, they could start working a few hours each week. That way, they can help to contribute until the ship is upright.

Have You Considered Refinancing Some of Your Debt?

Finally, thanks to recent rate reductions, refinancing can be a great way to improve your cash flow. By reducing the interest accumulating on the money you owe, your monthly payments will shrink in size. Thus, if you qualify, refinancing the debt could save you money over time.

Rethinking Your Perspective on Debt

How much credit do you have on your credit profile? If you believe that you are overburdened, consolidating your debt could be a source of relief. In some circumstances, companies purchase debt from consumers. 

They will purchase all the consumer's debt while also giving them a lower monthly payment. Either by reducing the interest rate or extending the payment timeframe, you'll receive a more affordable payment. 

There are also forgivable loan options (PPP loans) that companies might be eligible for depending on your area ad type of business. Resources like these are crucial to investigate but vary from region to region.

Credit Repair Strategies

If your credit is bad because you have been behind on payments, finding lending options through traditional lending sources can be a daunting proposition. However, if you are a business in, say, Melbourne, Australia, with a delivery vehicle that just breathed its last gassy breath and you need to replace it, or your business will die too, or have to have a vehicle to commute to the job that is keeping your housing bill paid, sometimes getting a car loan from an alternative lender could be the right answer, even if temporarily. 

Making your payments on time is good for your credit in the long term, even on a less than ideal loan, and you can always refinance to a better rate when things improve. Just watch out for lending scams and predatory lenders who would take advantage of you in a rough spot.

Making Tomorrow a Better Day

As long as you follow this advice, things should start to get better soon. That way, simply making ends meet no longer runs you ragged. Otherwise, you'd have to work yourself to the bone just to make the minimum payments. If you had to ask us, that's no way to live.

How Credit Makes the World go Round

Wipe our Debt (Photo credit: Images_of_Money)

Way back before everyone carried little plastic cards in their wallets instead of cash, the saying was money makes the world go around; not so anymore. You and I are not the only ones who seemed to be enslaved by credit. The biggest user of debt is the US Government itself.

How it Works

Just about everybody is aware that our country is trillions of dollars in debt, but not everyone knows how our government keeps functioning under that debt load. Creating more money is not the answer. If our government creates too much money inflation runs rampant. Instead of paying four dollars at the market for a gallon of milk you end up paying 24 dollars instead. Our government keeps working because of their ability to borrow from other countries, primarily China and Japan. 

If not for the trillions of dollars borrowed from these two countries our country would indeed come to a complete halt. We borrow money by issuing US Treasury notes and bonds. China, Japan, and other countries buy these debt instruments for the interest we pay them every few months. When the bonds and notes mature they’re either rolled over into new Treasuries or we pay the principle amount back in cash. Most Treasury Securities mature every 5, 10, 20, or 30 years. In most cases our government strives to roll the debt over into new long term debt so they don’t have to come up with the cash to pay out.

The Cost of Bad Credit

Most people now days are familiar with their credit score and how it impacts your ability to borrow and the interest rate they receive. If you have poor credit the amount you are able to borrow suffers, and the interest rate you can borrow at rises. The same goes for our country. For many decades our countries credit rating has been the very best; AAA. That makes the US just about the safest country in the world to borrow from. Due to our current economic problems our country’s credit rating has suffered. 

Standard and Poor’s, one of the primary credit rating agencies in the world downgraded the United States debt from AAA to AA with a poor outlook. They have since changed the outlook to stable but have kept their rating at AA. So what does that mean for our government? In order to attract enough investors (like China and Japan) our government has to be willing to pay a higher interest rate due to the increased risk of borrowing from a country in financial and economic turmoil.

Just like the average citizen, as their credit score improves or disproves, the interest rate they are able to borrow at rises or falls. The amount of money you can borrow will also go up or down depending on your credit score.

What if You Can’t Borrow

If your credit score falls too low you lose the ability to borrow money at any rate because the risk is considered to be too great. If you can’t borrow what do you do when there is a financial emergency? Fortunately for most people there are finance companies that give payday loans, personal loans, and car title loans, to name a few. Those are all high interest rate ways to borrow money no matter how bad your credit may be. 

Unfortunately for our government it’s not so easy. It is vital to our country’s economy that our government is able to borrow what it needs to keep functioning and hopefully one day someone will come up with a way to significantly reduce our country’s debt.

Smith is a professional blogger that provides financial information on savings and loans. He writes for InstaLoan.com, a leading title loan lender.

Debt Settlement and Credit Counseling Can Solve Your Financial Problems

Wipe our Debt (Photo credit: Images_of_Money)

Most of all Americans are in debt, but that’s not always a bad thing. There’s a saying that goes you need to spend money to make money. It’s when you are in debt that you did not intend to acquire and you don’t know what to do – then it becomes a problem. Whether it’s for your mortgage or overuse on credit cards, many debt counseling services exist to help guide you through these issues. 

So what are the factors you should take into account before looking into these organizations for help? What data points should you use to compare debt settlement and credit counseling services?

Compare Debt Settlement & Credit Counseling

1. Location – though communication via e-mail or by phone is easy, nothing beats an in person meeting when it comes to learning how to deal with financial issues.
2. Services – Are you looking into debt management programs or just counseling? You should also look into specific information like housing counseling or pre-discharge debtor education.
3. Agency Type – Both for profit and not for profit agencies exist, but not for profit ones generally rank higher and charge less.
4. Affiliations – This is just more for credibility, but that’s how you know whether an agency can be trusted. 5. Price – even not for profits have to earn revenue to stay afloat. The average debt management plan is about $65 per month.

Useful Guidelines to Increase Your Credit Score and Get Rid of Debts Faster

Factors contributing to someone's credit score, for Credit score (United States). (Photo credit: Wikipedia)

Many of the folks don’t really understand that there are several practical credit repair guidelines that could aid them to precisely nullify the damage, and improve their credit score, when they get a very low credit score due to some genuine reason. Debt collectors really don’t fancy you to comprehend these secret tips for the reason that they would probably get less work, if everyone starts recognizing the importance of these guidelines, and learns to execute the same to increase the credit score.However, you do get several privileges, and at the same time debt collectors do have some standard rules, and regulations that they should follow sincerely all the time. 

Ensuring No Errors in Your Credit Report

The first, and the foremost thing that you should do to increase your credit score is to check the negative points that are associated with your personal credit report are deadly accurate, or not. Every now and then, it has been observed that a simple, negligible error present on the credit report of a person is actually what that leads to a significant dip in the credit rating of that particular person.

Get a Copy of Your Credit Report from all Agencies

Demand all the 3 vital credit agencies to dispatch a replica of your standard credit report, and then carefully look at all the particulars that are entered in your report to make sure that there are no errors whatsoever. In case, you discover any error either small or big, immediately bring that to your credit bureau attention by writing about the discovered mistake to them, so that they can inspect it, and finally solve the mistake.

Getting the Erroneous Records Fixed Quickly

No one really wish erroneous observations to be the major reason behind their low credit rating; hence, this is the foremost thing that you are supposed to completely avoid at all costs. Whenever you are conversing with a credit agency, you should keep up all your details, and documents filed properly, and the best idea is to mail an official letter to them via any certified email service, and save a copy of the mail sent for your own records.

Be Assertive If Your Requests Are Not Entertained

The credit agency should inspect all factual errors, and come out with a reply within maximum thirty-days, but at times your particular case may get misplaced or it is simply aren’t ahead of everything, hence it is always recommended to uphold your own set of records for future reference. Also remember that you’re not an assistant functioning for the credit agency, this data significantly influences several important aspects of your everyday life, so your must be very assertive when you are dealing with such agencies.

You must still be precisely polite, and professional, but make sure not to converse with them as if you are requesting them to do a favor for you, since it is more significant than that. You just want a small or a potential error fixed in your credit report, and at time you may have to be very aggressive to compel the credit bureau representatives to realize it. As per law, the credit agency will have maximum of 45-days to reply to your query, but in most cases it has taken considerably more time than that stipulated time limit. So, don’t be shy to threaten them to take legal action after the stipulated duration of 45 days.

The Bottom-Line

Down the line at some stage in the near future, you may plan to get a new car or buy property, and for that you may be required to apply for a financial loan; if you have a really bad credit rating, you may even fail to get the loan that you are looking for. So, it is always advisable to follow all the above discussed secret guidelines to have a healthy credit score.

Author Bio

This guest post is written by Ann Boulette, who has been using these simply tips to take care of her credit repair, and she has managed to boost her score tremendously over past 2 years.

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