Bad Credit Truth

Save, hard to do or is it?  So many Americans have dealt with this issue.  Rather than put some money away every week, they take the bulk of their weekly or bi-weekly check and spend it on “stuff”.  I would challenge anyone to write down what they spend their money on each week, make sure that you don’t take into account your .  It is almost impossible to remember what you spent your money on, but you realize that you have no money and have nothing to show for it.  This is a brutal wake up call.  I wished that I had learned this at a younger age.  Instead, I started to learn this in my twenty’s.  I have had a job since I was fifteen.  Now, do you think that I have a single penny from when I was a teen, Nope!  This aggravates me when I think about it.

Now, I have figured out a plan that works for me at this point in my life.  This may or may not work for you.  What I do is I take and add up my bills and then I divide by 4.3 ( this is about how many weeks are in a month).  I take that number and compare it to my weekly earnings.  Now I take a number that I am comfortable with putting in savings and add 15 percent to it.  When I first started to do this, I felt that I had absolutely no money, that was just the opposite.  I had money, but I just wasn’t spending it.  As time went on, I was able to live with on the little “pocket money” that I had.  You would be amazed how you can stretch your money.  Every once and a while, I would take a peak at the account online and see what the balance was and I would have a little party in my head.  It feels good to save money!  There is no way around it!

One way that you save money if you have a hard time disciplining your self is to have direct deposit.  What I do is I take that amount that I have allotted  to save and have that money be deducted from my pay check and automatically deposited into a savings account.  I don’t even see that money at all.  You know the old saying, “Outta sight, Outta mind!”  That is exactly what happens.

Not everything that I said is going to directly mold to your specific life, but these are basic principles that I have lived by and have treated me well.  Just remember folks, when it comes to saving, discipline is the main key.  This fundamental key of discipline will carry on with you.  It will create good habits that will stay with you for life.  It will most certainly give you a solid advantage to stray clear from getting into bad credit. Always keep your eye on the prize.  Once you see the fruits of your labor, you will most certainly satisfied.

So you have just applied for a credit card and you have been denied.  Or you went to get a cell phone, and you were denied a plan without a HUGE deposit.  What steps can you take to rebuild you credit?  Here are a few:

1. Request a credit report:

Most people do not know that you are allowed by law one free credit report from each of the big three credit reporting bureaus each year.  The big three are: Equifax, Experian and Trans Union.  Now if you figure that out in your head, that means that you can get one free credit report roughly every quarter, or every three months.  Now, they will not give you your credit score, they will give you the report.  This will outline every open accout, late payment, every account that went into collections and so on.

2. Examine the report carefully:

When you get the report, make sure that you go over that report with a fine tooth comb.  It is important to realize that your credit is literally your trustworthiness to lenders.  When you walk into the bank to get a loan for a car.  The loan officer does not go by a judge of character, they will go strictly by numbers.  The loan officer is not going to say to themselves, ” Wow, this guy has a nice suit on and it really looking sharp today.  I think that I will give him a loan.”  Now that would be nice if they would do that, but that is not how the cookie crumbles.

3.  Divide and Conquer:

It is important to not let your self get too worked up over this.  This is very important, but not a life and death situation.  It’s imperative that you do not let your debts go unresolved.  Make sure you have a plan installed.  Do small things to improve your bad credit.  Open a savings account at a bank.  Once you open and start to save money, this shows banks that you are taking initiative to improve your financial status, and save for the unexpected.  Make payments on time.  This is one that usually slips by people.  I myself have let that happen to me, and it came around to bite me in the hind quarters.  Making your payments on time will greatly improve your credit score for the long run.  If you have unpaid bills, and they have gone to collections, make a concerted effort to contact the collection agency to make the full payment or settle on a price you and the collections company are comfortable with.  Remember, unpaid collections are fare worse than paid collections.

Remember that these are just a few of the steps to take at revamping your credit report and score.  Folks, it’s not going to happen over night and suddenly you will wake up and be approved for a $500,000 mortgage from the bank.  Like with most things in life, it only takes a short time to ruin, but a long time repair.

Imagine you are driving buy a big car sales superstore, every one has at least one by them.  So you are driving by, and you have this jalopy that you were given when you were sixteen by your grandmother.  You are now 24.  The car is rusting out, there are a few unknown rattles that are coming from under the hood.  The car is blowing so much smoke out from the tailpipe, you can hardly see that eighteen wheeler behind you.  You look to your left and you see this ten by ten dot matrix screen that you can see from the moon displaying, “NO CREDIT, NO PROBLEMS!” or, “Bankruptcy, bad credit, you’re still approved!.

So many people get dragged into this marketing ploy, it’s not even funny.  You start to think, “Yeah, I need that new car, this one is not cutting it anymore!”  What you don’t understand is that, yeah you will be approved, but the interest rate will be so astronomically high, you will not be able to see all of the numbers on graphing calculator.  But, by the time you get to that point, you will start to make excuses for yourself to have this new car.

If you absolutely need that car.  Make sure you do your research first.  Contact the BBB (Better Business Bureau) and check if the dealer has had complaints filed against them.  What a lot of the time, shady car dealers will do, is inflate the cost of the car, and then knock some of the price tag off and then they make it look like you are getting a fantastic deal.  Then they will slap the high interest on the loan.  be careful with this one.  When you finance through a dealer, the dealer gets a cut of the finance.  So if you call the lender your self, you may be able to get a few percentage points off. Bad credit car loans are a bad idea as a whole.

All in all, make sure that you expense all avenues before going with the high interest car loan.  This can even ruin your credit more so than it was before.  One rule to go by, ALWAYS make sure you can afford it before you sign your signature on that line!