Guest Post author Ann Shirley, this post does contain an affiliate link
Tax season is right around the corner. While many people may be excited about receiving
their tax returns, others may be dreading it as it’s merely another reminder that they have to pay
off their outstanding debts. It is common for people to be struggling with debt especially after
the holiday season in a bad economy. Debt is never a good thing as it possesses the power to
destroy your credit which can make it difficult to receive loans or get approved for things like
purchasing a new car or home. However, you don’t have to let debt run your life. Here are 5
ways to bounce back from bad credit.
1. Pay Your Bills On Time. This may sound simple, but when you’re behind on your bills
it may be easier said than done. It’s tempting to want to just pay partial amounts or skip
paying some bills all together when money is limited. However, it is crucial to pay all
of your bills on time so you don’t fall deeper into debt and end up damaging your credit
even more. Worry about paying off your current bills before digging into paying off
debts.
2. Pay Off Debts. Once you pay all current bills then it’s time to worry about paying off
your debts. Don’t delay paying off your debts or you’ll only be allowing yourself to fall
into more debt as you will accumulate higher interest over time, meaning you’ll end up
paying more than you would initially have to. The quicker you can pay off your debt the
quicker your credit will be restored.
3. Cancel Services You Don’t Need. Make a list of all of the bills you pay. Then try to
eliminate some of them based on how often you use them. Look for cheaper alternatives.
For example, can you do without cable? Many people are switching to cheaper
alternatives like Netflix which is less than $8 a month.
4. Consider Getting a New Credit Card. You might be hesitant to open a credit card when
you are in debt thinking that it will hurt you. However, opening a credit card can actually
help you to restore bad credit if you can manage to make payments on time. There are
also some new secured credit cards such as the Unity Visa that aim to help you restore
bad credit. This credit card is not a pre-paid card, but is offered at a fixed rate that is not
variable which will help prevent you from overspending and falling deeper into debt. One
of the highlights of this card is that it sends reports to major credit bureaus which will
show that you are making an effort to restore your credit and pay off your bills in a timely
fashion.
5. Budget. Nobody likes to budget. It’s never fun to cut back on spending and to do without
some of the things we enjoy such as a night out with an expensive meal and a trip to the
movie theatre. However, it is important to save money and put it to good use — towards
paying off debts and paying bills on time. The more you budget now the less you’ll have
to in the future. Once all of your bills are caught up and debts are paid off you can use
your leftover money for enjoyment. When spending money try to plan ahead and think
about not only the things you want, but the things you need. Make lists when going to the
store and try to plan meals ahead of time to cut costs.
What are your best secrets for restoring bad credit and getting out of debt? Have you tried any of these tips?
This is a guest post, author: Ann Shirley
A great tip for a couple to dig their way out of bag credit is to become competitive about it – make it fun. Whichever one saves and does the best money wise for a full month, gets out of a hated household chore for that month, etc.
Oh that is a good idea! Thanks for sharing!
Greetings! Very helpful advice within this post! It’s
the little changes which will make the most significant changes.
Thanks a lot for sharing!