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How To Live With Your Bad Credit History
If you've been burdened with credit card debt thanks to a bad credit record, then it's important to know that you're not on your own - more consumers around the world are feeling the harsh pinch of the global recession on their finances.
Between increasing job losses, salary cuts and the rising price of oil, your money is probably going towards other necessities before you can even think about reducing your credit card debt!. On the other hand, while feeling as though your budget is being squeezed is no fun, during these uncertain times it's ideal to work on your credit score as much as possible.
But how can you fight the battle against credit card debt, especially when it feels like you have no room in your budget for any expenses? Simple: follow these steps right down to the word, and watch as your credit score skyrockets!
Enroll In An Automatic Debit Program. Haven't done this already? If not, you're really cheating yourself out of a great way to ensure that all of your credit card bills are paid on time, with little effort on your part. Automatic debit takes money for credit card payments out of your bank account, so you'll always pay your bills on time without worrying about overdue payments and their effect on your credit score. And since your rating is mainly composed of your payment history (35%), it's an ideal way to get one of the major factors that makes up your credit score down pat.
Don't Avoid Credit. It may seem like a confusing idea, but when attempting to improve your credit score, don't avoid credit cards altogether. In fact, keep at least one card with an open credit line, as a large part of your score is determined by your debt to credit line ratio. If your cards are maxed to the limit, get a financial expert to rework your household budget so that you can put aside more money at the end of the month for your credit card bills. You'll be surprised at how much extra cash you can put towards those huge card balances, which will get you on the path towards financial independence in no time at all!
Get A Prepaid Credit Card. Once again, you might be tempted to avoid all forms of plastic at all costs, but there are cards out there made for consumers just like you. It's no secret that using a credit card responsibly will help you maintain a good credit score; but if you're just starting out on your financial education, get a prepaid credit card to help you avoid any impulsive shopping sprees. Prepaid cards are viewed the same as ordinary credit cards by the credit bureau, so you'll still get the benefit of boosting your rating. A deposit of up to $500 ensures that you can't max out your card, as lenders will use the deposit as collateral against your spending. It's a great way to stay on course while fixing that credit score!
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