It's not easy to fix your bad credit. Whether you lost your job, had a serious illness or let debt get out of hand, you may feel like you'll never recover. Although it does take time, there are ways to create a better financial situation.
Things You can do to Fix Your Credit
As soon as you realize that your credit is damaged you should take steps to fix it. Not doing so will only make it worse. Here are a few things you can do to repair your finances:
- Assess the damage. Your first step should be to get free copies of your credit report. One of the best resources for this is CreditKarma.com. Not only is their service free, but using it won't hurt your credit score.
- Talk to your creditors. The companies that you owe money to will often work out special terms with you. For example, a credit card company may allow you to establish an automatic payment plan and reduce the interest rate during the payment period.
- Stop collection actions. You can dispute debts that you don't think are legitimate. You can also ask creditors to stop contacting you, except to inform you of any legal action they plan to take.
- Be patient. As you pay off your debts, the negative impact of them will go away. This does take some time, but eventually your credit scores will begin to rise.
- Attend credit counseling. By attending credit counseling and debtor education classes, you can learn additional tactics for repairing your finances. Your counselor should be able to help you determine if you would benefit from a Debt Management Program or bankruptcy.
- File bankruptcy. Although it's the last item on this list, it can sometimes be the best way to solve your financial problems. Don't be afraid of the stigma that is often associated with bankruptcy.
Rebuilding Your Credit after Bankruptcy
If you have filed bankruptcy to fix your credit situation, you will need to work on rebuilding your credit. One of the best ways to do this is by financing a car after bankruptcy. Your on-time payments will help your credit scores rise, once again putting you on the road to financial success.
If you're ready to get started, fill out our online application to see how much you could borrow.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.