It has happened already. Your account got a little bit low, you have overdrawn your credit, and you missed some dew dates. Probably more than you thought and you sincerely aren’t sure of what to do now.
Well, this is not one of those articles that will tell you to keep hiding, and we aren’t going to advising self-pity of guilt or anything either. One thing is sure though, we will be discussing why it isn’t as bad as you think and by the end of this article, you would have learned three practical, workable and result-proven steps to repairing your credit.
The deed is done! You’ve missed a few payments, you’ve overdrawn an account or two, you’ve maxed out your credit and are hiding like an ostrich with its head in the sand.
You do not want to be in this position, but do not fear. There are steps to take to repair your credit, get you in a place of financial freedom, to even buy a house within the next year. That is if you begin today.
Stick till the end and share your experience after practicing these tips.
Best of Luck
Repairing Your Credit and Becoming Financially Free
The solution is summarized below
- Calming the fire
The raging credit fire is spreading; you cannot cast it out at once, you’d get burned and lose more. So, don’t try to get rid of the credit at once, either. That will leave a bigger whole of credit. Tip number one here is thus:
“Do not pay a debt with another debt.”
This may sound awkward to some persons, but it does happen. You know that point where you have kept the debt alive perpetually, pushing the creditors to take actions, and then you are left with no choice but to get another loan to service it? One debt may disappear, but a bigger one survives it.
What Should I Do Then?
Start by making the minimum payments on all your credits. One step at a time – you may not put out the fire, but you are preventing it from growing.
- Put Out the Fire
It is time to start actual fire abatement. To do this, begin by equaling your debt to 50% of your credit availability. This does not get rid of your other debts, but it clears up your financial records and portrays you as a stable borrower. That way, you can have access to additional funds. Essentially, we’re saying if you have two credit cards with a $5,000 limit, it is better to have at least $2,500 left in each account than drawing one to only $500 and the other $2,000.
- Clearing Up Your debt.
At this stage, you should struggle to have good trade lines, because they will open doors to more credit. With bad trade lines, you will find it more challenging to have access to loans.
While you settle your debts gradually, you can incur funding from individual loan facilities. It may come in small value, but it is enough to keep you afloat. These loan facilities usually give you credit irrespective of your low trade lines. So, consider it a backup plan. Some include:
- Home Trust
- People’s Trust
Applications are mostly online enabled; as such, you can access them from your comfort zone.
Three Tier Lenders
This is another option you have. You could try out three-tier lenders. However, you need to have some money at hand. For example, if you have $3000 at hand and your debt is double or triple of that, you can take that money and pay it as a down in lieu of a credit card into a new Tier 3 lender/bank. You are most likely going to be accepted, and then your down payment will be available for withdrawal, likewise some extra credit.
Lastly, you can take out your loan to buy an investment with the bank. An example is the GIC. This should be your last resort. Your debt will be rebuilt gradually, and you may have access to some of the interest also. Banks are likely to accept this proposal because it is risk-free for them.
Once you reach good trade lines, your next aim should be remaining there. You must learn to maintain good credit; otherwise, you will be in and out of the mess.
Do you now see that no situation is impossible? Get started right away and share your success with us!
- Do not close credit accounts! It will reflect on your financial report!
- Only apply for credit you need
- Be active towards getting back your finances.
- Twelve months is the estimated period for a refresh.