Being Honest with Yourself: The First Step to Credit Rebuilding

[Apr 16, 2008.]

 

Everyone makes mistakes in their lives – some more noticeable than others. When it comes to your credit, these little mistakes, overspending and late payments, for example, can add up to problems down the road. While you probably already know what a poor credit score can do, what you might not realize is just how far from a ‘good’ credit score you are. It’s time to take inventory of your current financial situation and assess what needs to happen next.

Being honest with yourself does not mean that it’s time to berate yourself for the actions of the past – you can’t do anything about them. But you can start anew with better decisions and a plan to correct past mistakes. You will want to start by gathering your current credit card balances as well as any other loans that you might be repaying at the current time. Take out a piece of paper and write down these balances as well as the interest rates that you are paying each year. When you have these numbers written down, you will want to total up your balances to see what kind of debt you have.

The truth is that even if the number seems large, it’s not as difficult to pay off as you might think. With calculated steps, you will be able to slowly chip away at your debt and begin to rebuild your credit. Being honest with yourself about the debt amount that you do owe will help to give you some incentive to start planning to pay these balances off. But you’ll also want to take the time to write down any new expenses that you incur so that you are still managing that previous total and keeping track of where you’re at.

What most people find helpful is keeping a monthly log of the payments they make to each account as well as any additions to each account’s balance. This piece of paper or notebook will serve as a reminder of your credit status as well as what you need to do. In an ideal situation, you will want to pay down the balances as quickly as you can – and this generally means not adding to the problem in the meantime.

Honesty is the best policy when you’re trying to rebuild your credit:

• Find out your credit balances


• Find out the interest rates you’re paying


• Keep track of your spending


• Try not to increase your balances

Most people have no idea how much they owe, so they aren’t able to create a plan that will help them lower their bills. But you can.

More Information:

• Steps You Can Take Today to Start Rebuilding Your Credit
  While it can seem impossible to dig yourself out of financial trouble, the truth is that you didn’t get here overnight. Your debt accumulated over years and years, most likely, so while the road to debt freedom may be long, it’s not a road that will go on forever.


• Rebuilding Your Credit On Your Own vs. Getting Help
  If you’re struggling to pay off debts and boost your credit score, you’re not alone. More Americans than ever are dealing with financial troubles that are not only causing their financial health to suffer, but also their emotional health.


• Living Cheaply When You’re Rebuilding Your Credit
  The fact of the matter is that when you’re trying to rebuild your credit, you’re going to need to make some changes in your life. This will mean that you need to adjust your current spending habits in order to start paying down the debts that you have, as well as start looking for ways to live within your means for the rest of your life.


• How to Buy Gifts When You're Rebuilding Credit
  If you’re trying to pay down some debts, the prospect of giving someone else a gift becomes a stressful thought. You want to give gifts as you always have, but you also want to save your money in order to boost your credit score.

External Links:

• Credit Repair: Self Help May Be Best - You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:


• Information About Credit Counseling and Debtor Education