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How to Repair or Fix Bad Credit

When you have written all about your income and expenditure, the outstanding loans and other expenses on a paper, you need to make a plan to make regular payment towards outstanding bills and avoid debt consolidation in the first instance because this generally comes with high interest. Once you have placed a cap over avoidable expenses, you will be possible able to pay the credit card or other bills regularly. When the situation is totally out and getting bad to worse, only then opts for debt consolidation

Sometimes, the situation is just out of your control and you cannot take any action to improve your financial situation without help, you can approach consumer credit counseling services (CCCS). In such a situation several consumer credit counseling services are available in your city and you can choose one with good standing to seek help. In the mean time you can talk to your creditors about your tight financial situation and they generally agree if you request them politely to remove penalty and lower interest rates and also offer them your own personalized debt repayment plan. When you start paying them regularly all over again. Some people are afraid of contacting their lenders and creditors. This tends to make the situation worse.

Not taking any action on deteriorating financial situation when you are experiencing financial difficulty can have serious repercussion. This can lead to property repossession or bankruptcy. As the saying goes, better late than never. So, take action NOW and start doing something. This very simple advice can turn hugely useful later. So, take action to take control of your financial problems without hesitation. All you need is determination, discipline and a positive decision.

The SELF HELP process in getting out of debt plays a very important role. Once you have collected all your financial records, monthly bills, income and expenses, you would be in a better position to analyze the complete picture of debts owed.

First of all, get a copy of your credit report from a credit bureau i.e. from Experian, Equifax, or TransUnion. You can even call a creditor to draw an easy payment plan which you can easily follow to pay back all debt owed. In case you find any errors you can contact the lender and bring to their notice the error.

At the same time, you also take concrete steps to pay your outstanding debt at the earliest possible. It is common knowledge that you will pay those debts that are marked with high interest.

Now-a-day many non-profit credit counseling organizations are available which can help you to consolidate your debts and reduce monthly outgoing installments. Important thing is that you have to select such a situation with care because many have hidden motives too.

Stop forthwith charging your credit cards. You can even repay part of the debt by taking interest free short term loans from friends and relatives. At the same time, budget your finances and spend on just essentials only like grocery, gas etc) as use as much monthly income as possible in repaying outstanding debts.

Forget whatever defaults have taken in the past. Start a fresh financial life by paying all your credit or other monthly payments timely. This will enable establish fresh improved rapport with your creditors. Make a budget and strictly follow the same.

Once you have paid all the debts and outstanding money, you can submit application for a new credit card to start building fresh credit history. Once you get new gas or departmental store credit card, make it a point to make payments on time.

Final Thoughts

1. Prepare a handy Worksheet to show summary of your monthly income, expenses, deductions and debt payment plan.

2. Try to take charge of your financial situation with self-help and with the help of family members and friends.

3. Contact creditors immediately on phone, email or personally and apprise them of your financial problems to work out a plan.

4. Avoid debt consolidation in the first instance and try that creditors agree at your personalized debt repayment plan.

5. Consult Consumer Credit Counseling Services and resort to debt consolidation if creditors are adamant.

6. Develop a time bound plan of three or four years to get out of debt completely.

Vivek Kumar is an experienced writer who writes articles of general interest information dissemination. You can find more articles like this at

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