Can A Bad Credit Rating Be Fixed?
Can a bad credit rating save you from bigger problems? Hasn’t it done just that for many young people? I’ll explain how with a couple true stories.
Is It Good To Have A Good Credit Rating
My friend started his adult years with good credit. He was able to get credit cards whenever he wants, as well as finance cars, snowmobiles and more. He made the payments, and get stuck into debt while he was at it. When he was thirty years old, he had over $20,000 in credit card debt, plus loans on cars and business tools.
Eventually it was just too much to handle. After considering bankruptcy, he was convinced that the credit card companies would reduce his balance due if he just threatened to declare bankruptcy. However, he had to stop paying on the cards, or the credit card companies wouldn’t believe he was in financial trouble. He did this, and then drafted a nice letter to the companies, explaining his situation. Most cut at least 30% off what he owed, but he had to pay the remaining money immediately, which he did with a home equity loan.
As a result he was able to rebuild his credit score as his bad credit rating was not as bad as if he had actually declared bankruptcy. He also started to building again his credit balances. His good credit rating enabled him to again start the process of overloading himself with debt. He lives a stressful life, to say the least.
Story Of A Bad credit Rating
Another friend had her first credit score based on the phone bill in her first apartment, which she never paid on time. It was eventually disconnected. While she was young this and some other minor credit infractions, destroyed her credit scores. What effect did it had on her?
Just because she cannot take any further money she is not overwhelmed with debt and at the edge of bankruptcy. She has to buy things for cash when she has it, or wait until she saves enough. Has the inability to have a bunch of things around that are worth a fraction of what she owes on them made her less happy? No that is not true.
She seems happier than most people, perhaps partly because she just doesn’t have the debt-stress that is so typical today.
Sometimes Bad Credit Is Good?
I’m not saying you should purposely try to get a bad credit rating, but if you already have one, know that it isn’t all bad. The habits that got you here could get you into even more trouble if you could borrow more. Take it as an opportunity to stop going further into debt, and a chance to learn better habits?
Pay cash for everything. Pay down those credit card and loan balances (the higher interest ones first). The moment you get your cards paid off, start setting aside money to buy a good used car for cash. then, when you’ve done that, start putting what would have been a car payment into a savings account, for a future down payment on house or a business (the only things you should borrow for). Your bad credit rating can be a good thing if you take it as a chance and learn a lesson from it.
Related posts:
- Escape The Credit Card Trap
- Get Credit Score Help – Crash Course On Credit Scores
- Bad Credit Rating – A Good Thing?
- Why To Have A Spare Credit Card
- Debt Problems, Not Sure What To Do ?
Tags: bad credit, bad credit rating, Bad Debt, debt advice, debt assistance, debt free, debt help, debt problem, debt problems, eliminate debt, erase debt, get out of debt, getting out of debt, help with debt, how do i get out of debt, how to get out of debt, money, out of debt
