| Credit Repair: Stop Your Negative Trend |
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| Written by Brad Morgan |
| Tuesday, 14 April 2009 11:36 |
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Warnings from those previously singed and scarred holders of negative credit ratings told you not to get a credit card, but those pre-approved credit cards kept slithering into your mailbox.
Warnings from those previously singed and scarred holders of negative credit ratings told you not to get a credit card, but those pre-approved credit cards kept slithering into your mailbox. Part of the allure of credit cards is the belief that you need one, "just in case." As a result of such thinking, these offers are not discarded as they should be. Instead, you keep one or two to look at for those "just in case" situations. Credit card companies are masters in the art of temptation. They can draw you in with promises of incredibly low APRs, zero percent balance transfers, and more. Plus, who wouldn't want a card that you could personalize to fit your style? Recently, many credit card companies offer to design a card just for you, making it even more irresistible. You eagerly signed your name at the end of the application and threw caution to the wind. You figured, what is the harm in trying? After a few weeks of telling yourself that you have mended your spending ways, you finally get your new card. A host of financial burdens seem to melt away. You no longer have to worry about your car breaking down or where to get gas money - you can always borrow the money and pay it back later. Your way out of emergencies, your life boat, has arrived. And it looks great with the puppies playing on it. Once you diligently read the terms, you get right on the phone and activate it. This is a great step towards financial responsibility. When you have a new credit card, you can feel financial worries lessening. Suddenly, you can buy things that were out of reach only the day before. But you won't overspend and you will always pay on time, you continue to tell yourself even as you head to the mall. The first payment slip comes in from the bank. It is asking for a number dangerously close to the number on your pay check. This where you lose control. Rather than paying off the total due, you pay a portion. You continue to use the card to its maximum potential and again pay only the minimum. Eventually, you want to buy more and pay less. You sign up for another card. You?re approved. You buy and pay the minimum on two cards. Now you are buried in debt, and to make it worse, the low, tempting APR rate has expired. You may go from zero percent to in excess of twenty percent. If you miss payments, it continues to climb. Your debt grows on its own, even if you stop using the cards. You go on paying your minimum payments, ignoring the damage to your credit score. You'll pay it off eventually, right? You make plans to pay off the entire balance with tax refunds or bonuses. But these get sucked up in everyday purchases, and still your debt grows. Soon, you have financial obligations that are pressing on you: how will you pay your heating bill in the winter? How will you pay for the increase in gas and commuting costs? What happens now if your car needs repairs? All that, and creditors calling and sending overdue notices. You cannot pay your debt. You no longer have control of your financial situation, and this affects every aspect of your life. Start boldly and decisively to take back control. Take your three credit cards and cut them up. Be merciless. If you work hard to pay them down, you don't want the temptation to start using them again. Once you've paid them off, you want them out of your life. If this is too much severing of ties, keep one card and pay it off first. This will be an emergency card for bills that need to be paid. In fact, defining what constitutes an emergency prior to using it will help prevent miscellaneous spending. It is then time to begin answering those calls with a game plan in mind. Credit card companies are not fans of delinquent account holders, but they will work with you to get the money they want. Figure out what you can realistically pay each month. The key is honesty. Don't name a figure that is too much; you will end up in a worse position, and the creditors will not be as willing to work with you again. It is easy to view credit cards as a way to get what you want without having to pay for it. The reality, though, can hit you when your credit score is in shambles and you are getting collection calls. This is real money, and it is your responsibility to repay it. Time allowed this debt to get out of hand, and time is required to get it back in control. This problem will not dissipate overnight. Expect this process to take years, if not longer, to fix depending on the amount you owe. Not only have you established a hefty debt, but you have put your credit score in front of a trigger happy firing range. Those holes take time to repair. Credit repair is real. It just takes a strong sense of reality, responsibility and understanding of how the problem came to be. Learn how to fix your life by restoring your credit rating. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. A great way to repair credit is with the free credit reports site and getting your free credit score. |