Do-It-Yourself Credit Repair

Good credit is easy and quick to wreck but takes a long, hard pull to repair. Do not fall for ‘credit fix’ ads. The only one who can fix your credit is you. If you want or need your hand held, you can go to a non-profit consumer credit counseling agency but it will probably cost you. If your credit is so far out of control that bankruptcy must be considered, you will have to go to a counseling agency before you can file.

There are many websites where you can learn how to get control over your debt. The time to look for help is when you begin to suspect you may have a problem.

Some of the warning signs:

• You pay minimum payments on credit cards.
• Your credit cards are maxed out.
• You buy groceries and basic supplies with a credit card.
• You’re late paying your utilities.
• You’re late with the rent.
• You have to pay late fees.
• You regularly scurry to the bank with your paycheck because you’ve already written checks against it.
• You get payday loans.

Any one of these should ring an alarm bell. You do have to get a grip. Don’t panic. People do stupid things when they panic. The first thing you need to do is cut up all but one of your credit cards. Keep the one with the lowest fees in a drawer and don’t take it out again until you’re solvent, debt- free and with a plan.

There are three things you need to do right away:

1. Set up a savings plan. That’s right. Even if it’s only five dollars per pay period. This is money you don’t touch. Forget you ever saw it, but do it religiously every time you get paid.
2. Get all your paperwork together. Figure out your total amount of debt. Realize that until it’s all paid off, you will be paying interest on it. So, the quicker you pay it off, the less it will cost you. Now, get the kitchen timer and set it for ten minutes. During that ten minutes, think about all the stuff you acquired and all the meals out and entertainment and what-not you spent your future on and beat yourself up and call yourself names and grovel in discomfort until the timer goes off. Then take a deep breath and get on with your life, and the plan for digging out of the hole.
3. Call your mortgage lender if you think you’re in trouble. Chances are very good that if you show good faith, they’ll work with you. The last thing they want is to repossess your home. The last thing you need is to pay late fees. Talk to them.

Now look into transferring your balances onto the lowest-interest card, if possible. If not, you’ve got to start paying down the cards by sending more-than-minimum payments and send them at least five days before they’re due, to avoid racking up late fees.

Get rid of your cable. That’s right. Keep only what you need for internet access.

Learn to cook. Eat at home. Nutritious food made from scratch is cheaper than the chemical-and-calorie laden ‘convenience’ food and a whole lot better for you than fast food. You’ll save cash and build up your health. Cold turkey on sodas and commercial snack food. Yes, there will be a withdrawal period. Sugar addiction is not a joke. But if you keep track of all the money you save, that should help. Buy a water-filter jug—it’s so much cheaper than little plastic bottles, and better for the environment, too.

Take a serious look at your transportation costs. Commuting is an expensive addiction. If you arranged your life so you didn’t need a car you could clear your finances a whole lot quicker.

Get a library card. Use your library. Cancel your magazine subscriptions.

Learn to shop with your eyes. Leave your money at home. You need to shop to know what things cost and to recognize good quality. You don’t need to buy stuff, though. If you recognize good value when you see it, you can buy the things you actually need and get the best deals. Learn to shop in thrift stores. You never know what you’re going to find. But don’t buy stuff just because it’s a good buy. Buy only what you really do need.

Get on a make, make-do, swap, barter, trade, and cash only basis. It can be fun and a challenge to see just how little money you can spend in a month. For the wiser among us it has become a sport.

Make all utility payments on time, and in full. And turn off the lights when you leave the room. This will all take time. But as you go, and as you become more familiar with Your Money or Your Life, you will find that your debt is going down, your savings are growing, you’re healthier, your time and energy are no longer being sucked down the TV, and you are getting more out of life. And, you will no longer feel that your life is out of control. What could be better?

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