Tip #1: Organize and prioritize: It is very important to organize all owed debt and determine a payment plan, preferably more than the minimum due amount. Also, prioritize which loans, cards, and lines of credit are the most imperative and realistic to pay off within a set amount of time.
Tip #2: Limit the use of credit cards. The ideal balance to credit utilization ratio is 30% or lower. Every card swipe means accumulation of debt. Continue to pay your bill on a monthly basis and do not close your account. This hurts your credit score because creditors prefer for customers to have a long, consistent credit history.
Tip #3: Discuss your financial circumstances with your Student Loan Provider. They work with students and graduates to find the best payment arrangement, forbearance or deferment plan to help eliminate or put on hold the unrealistic monthly payment amounts and frequency.
Tip #1: Patience. Time helps heal physical, emotional and also financial damage caused by divorce proceedings and agreements. After assets are divided and accounts are either added or taken away, credit changes occur. It is very important to be patient and do not open any new accounts unless needed to (because all were in former partner's name or joint accounts).
Tip #2: Pay your bills on time. Always make sure bills are paid before or on the expected due date. When a payment is 30 days late or more, creditors report the account to the credit bureaus which hurts your credit score immensely.
Tip #3: Continue to establish credit history. Do not make decisions out of desperation or fear by closing accounts or opening store lines of credit. Keep your account in good standing because this establishes trust with creditors and can only boost your credit score.
Unemployment/Loss of Income:Unemployment and loss of income has a negative psychological and physical affect on one's psyche. With an ever-changing job market, it can be very difficulty to find and secure a job or career. With no income coming in, it may seem nearly impossible to fulfill one's financial responsibilities.
Tip #1: Contact your creditors and student loan provider. Again, it is very important to communicate and explain your financial situation to your lenders. Many institutions offer protection or forgiveness programs to borrowers who face difficult financial times.
Tip #2: Save as much money as you can and prioritize your needs and put aside your wants. It is very important to set aside money for your house, car payment, utilities and any other necessities.
Tip #3: Stay positive. Do not panic and continue to search for opportunity.
Bankruptcy:Bankruptcy can stay on your credit for up to 10 years, but with the proper steps taken, it is possible to bounce back smoothly and much more quicker than expected.
Tip #1: During bankruptcy, focus on re-building your credit by opening a credit card. Charge minimally and pay consistently.
Tip #2: Use only 30% of your credit utilization ratio. Credit score begins to drop once borrowers near or exceed 50% of credit borrowed.
Tip #3: Think about what you need, not what you want. Creditors love to create gimmicks to get consumers to apply for credit. Not all credit is good credit. Open 1-3 accounts that will benefit your credit score and life.
Foreclosure:Losing a home is devastating and so is the damage that it does to one's credit score. A foreclosure remains on a credit report for 7 years, but its negative impact lessens over time.
Tip #1: Again, focus on re-building your credit. Pay current credit accounts and refrain from committing ill-advised purchases.
Tip #2: After at least 2 years of credit consistency, your credit could be repaired.
Tip #3: Keep your foreclosure isolated as a single negative item as if it were a mortgage account. This will be less damaging to your credit score.
Unforeseen Bills:Misfortune, tragedy, and medical emergencies cannot be predicted. Unforeseen circumstances can harm your credit score as well as cause financial instability. Medical bills are among the most common types of collection accounts and can significantly lower one's credit score. As difficult as these circumstances may be, there are ways to help alleviate the damage that these bills create.
Tip #1: Save money. It is important to save money during times of stability because misfortune comes unexpectedly.
Tip #2: Communicate with your financial institutions and creditors. Everyone experiences hardship. There are many different programs that assist consumers when they experience involuntary circumstances.
Tip #3: Work with the hospital's financial assistance division to find support and resources to help alleviate the high costs of your outstanding medical bills.
Credit difficulty is frustrating, but you cannot allow it to control your life. Your circumstances are stressful enough. Do not let your credit difficulty add more worry. No matter the circumstance, continuously work to repair your credit. Pay your bills consistently. Remember every credit card swipe equates to more debt applied to your name. Communicate with lenders, financial and credit institutions to make arrangements and find programs to help deal with your outstanding debts. There are many ways to financial freedom and we at David McDavid Nissan of Houston are here to help guide you through your times of difficulty!