A recent graduate is no stranger to debt. It’s not a good feeling to have a mountain of debt (literally, hundreds of thousands of dollars) hanging ominously over you right out of college. A lot of the time, that is exactly what drives us to settle for some dead end job in the first place — the bills aren’t gonna pay themselves! If you’re like me, you’ve probably made some regrettable financial decisions during your college years that still have some lingering consequences. One of those consequences might have occurred after partnering with a group of enterprising Nigerian businessmen in need of your off-shore bank account. Another consequence is bad credit.
There is no quick fix for creditworthiness. Companies out there promising to remove outstanding liens, judgments or bankruptcies are run by scam artists and the truth is, they can’t do anything you can’t do yourself. The allure of getting that home and car loan, or securing that equity line of credit for your business, can be overwhelming but like losing weight, nothing bears fruit without a little elbow grease and a lifestyle change. Here are some practical steps to get you out of your credit funk:
1. Get a copy of your credit report. You are entitled (by law) to one free credit report from each credit agency each year (Equifax, Experian and Trans Union). Look over the reports and take note of any inaccuracies. With identity theft so prevalent and even human error a factor, you never know what might show up on your reports!
If you do come across any anomalies, draft a letter to the consumer reporting company to make your case. Clearly identify items in question and include copies of documents that support your position. Send your letter by certified mail and make sure you keep copies of everything. The best start to fixing your credit is clearing items that don’t belong!
2. Create a budget. Learn to track where you’re spending your money. In this day and age, it’s too easy to defer responsibility by swiping your trusty credit card and choosing to forget about the money you’ve just spent. The “little things” that you think you have the money to charge quickly pile up and make it even more impossible to get out of the hole you’re already in. Use free websites like Mint.com to visually aggregate your expenditures to show you how you can slim down your budget on things like leisure and going out to eat. Learn to prioritize what’s extraneous from what’s necessary.
3. Build a relationship with your creditors. Contrary to popular opinion, creditors don’t want to go through the hassle of having to send you to collections. Try to contact them before you’re in over your head. If you can talk to a live person and put together a payment schedule that is within your budget, everybody wins in the end. If you end up having to go to bankruptcy court, they might not see a penny so a genial relationship with your creditors can only help you.
4. Get everything in writing. Say you work out a payment plan over the phone with Steve the Creditor. If Steve loses his job and Ellen takes over your account, your payment schedule might get lost in the shuffle. Ask for paperwork so you don’t have to go back to square one and haggle with a more aggressive agent. Once you’ve paid off your debt, ask for a settlement letter to send to the credit bureaus so your credit report can be updated.
5. Stop charging your cards! Cut them up, lock them in a safe deposit box, or bury them underground. Do whatever you need to do. Just avoid swiping your credit cards! They are the bane of your credit-building existence. Make sure every month you pay the minimums on any outstanding balances you have until they are no longer a blemish on your record.
6. Faithfully make your payments. Once you’ve worked out lower payments within your budget, pay them faithfully (in full and on time!). Make a calendar to help organize yourself if you have to. The creditors are lowering your payments as a favor to you so don’t break faith. Stick to your budget and you’ll get out of your credit mire in no time!
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私は金銭管理に関しては確かに疎いです。 これまで与えられた紙幣、与えられたクレジットカードをそのまま何も考えず、使用していたまるで子供です。 支払い自体自分で行った経験がない為、最大の弱みとも言えるでしょう。 すでに本当のクレジットカードも家に置いてきました。使うことも、使って寂しさを紛らわすこともないので。