The first step to repairing your credit is in understanding what happened and why you are now in financial trouble. Did you lose your job by being laid off? Did you get sick and lost access to your income and have no or very limited health insurance? Or did you overspend and now find yourself with a mess to fix?
All of these have happened to many people in different circumstances. Your first step in fixing your credit is knowing and acknowledging the reasons why your credit situation is the way it is currently. The second step is in knowing how to go about repairing your credit, and yes there is a right and wrong way of doing this!
If you just walk into a credit office and tell them that you can’t pay your bill, they automatically assume that you have no money and can’t even afford to make one payment. So it is important to know how to approach any type of financial institution.
Basically you want to have all your bills in front of you for the month. Then calculate how much money you have available to pay something on each bill. Prioritize which bills must be paid first. Your mortgage and utilities are high priorities, you don’t want to lose having your heat or hydro shut off.
Pay these first and then see what you have left over. If you have a small bill that is just one payment then pay this off next. Then try and make the minimum payments on any other bills you have left.
As soon as you have accomplished this you want to start putting money away for the next month’s round of bills. You need to get yourself into the habit of developing a bill paying strategy. This way you are less likely to default on your bill payments. As soon as you start to miss payments you will begin to have creditors hounding you.
If this is happening to you it might be advisable to think about going to see a credit counsellor. However, that can be another expense for you. If you can be self disciplined and take advice you can take steps to get yourself out of this credit mess that you are currently in.
Self help can be fruitful and by you having to take the steps you are not relying on someone else to fix your problem for you. Self help when done in conjunction with proper education can lead to increased self esteem and confidence. Along with of course, increased financial gain.