Smart Ways to Deal with a Bad Credit Score

When was the last time you checked your credit score? Was it excellent or was it poor? Some people may have an excellent credit score throughout their life and then suddenly something in their life changes and the end result is that they are left with a bad credit score. A death, a divorce, a failed business, a catastrophe such as a major flood or hurricane; anyone of this things can dramatically change your personal finances. So what can you do if you are suddenly left with a bad credit score? Here are some tips.

Tips on How to Deal with a Bad Credit Score

Deal With Existing Debts

Contact the financial institutions that you currently owe money and talk to them about creating a payment plan that fits within your budget so that you can repay what you owe, within a timeframe that you can manage. Be polite and professional. If the first person you speak with is not willing to help you, ask to speak with a manager.

Look for Mistakes

Dispute any inaccurate information on your credit report that may be reducing your credit score. It could be a credit card that you paid off last year, but was never reported. Or it could be a loan that you paid off 10 years ago but was never reported. Make sure all of the details on your credit report are up-to-date.

Credit Counseling

Depending on your situation, you may find it beneficial to speak with a reputable consumer credit counselor about your bad credit. Sometimes we are so frustrated by our situation that we just can’t seem to find a way out. And sometimes our personal finances are not as bad as they appear. A credit counselor can review your finances and help you find solutions that you probably haven’t thought of.

Rebuild Your Credit History

Once you deal with your existing debt it is time to work on rebuilding your credit history and improve your credit score. Keep in mind that this can and should be done while you are paying off your current outstanding debt.

As you know, the best way to improve your credit score is to show that you can borrow money and then make your monthly payments on time. You can do this by applying for a secured credit card with your local bank, or by applying for a loan through Aspire unsecured loans. Take out small loans and repay them on time. Each time you do this the lender will file a report with your credit bureau to show that you are paying on time.

As long as you continue to pay off your existing debt on time, and repay your loans on time, your bad credit score will work its way up to excellent again.


    • DC @ Young Adult Money

      DC @ Young Adult Money 10/29/2013 5:34 a.m. #

      Haha what a great infographic! Rarely do we think of superheros in these terms.

      • Sicorra

        Sicorra 10/29/2013 3:54 p.m. #

        True. We typically think they are rich and powerful, and can afford their lavish lifestyles.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 10/29/2013 10:59 a.m. #

      LOL! And to think everyone wants to be a superhero. Maybe not if they knew how bad their credit rating is. It's a good thing most are independently wealthy so they don't need to take out loans. :)

      • Sicorra

        Sicorra 10/29/2013 3:56 p.m. #

        Maybe they just appear to be wealth but actually finance their mansion and fast cars through loans. Who knows. (ha..ha...) :-)

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