Stopping the Fire Before It Spreads: Avoiding Bad Credits from Getting Worse
Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Building Credit History » Stopping the Fire Before It Spreads: Avoiding Bad Credits from Getting Worse

Stopping the Fire Before It Spreads: Avoiding Bad Credits from Getting Worse

Updated: December 26, 2012

Add to Favorites:
Every problem has its roots. Before solving it, you have to be well versed on how it came to be. This principle also applies on bad credit history. Before things get out of hand, you have to discern that something is wrong. At the beginning, credit problems not look like a big deal. But as you disregard the signs, you get into it and can`t get out of the pit. But don`t worry; it`s not the end of everything. When you have the symptoms of credit trouble you have to do the following: 1. Stop Charging. Never go beyond the limit of your card and keep your balances below half the limit. Do not open another credit account. This action is another liability in the making. Pay off debts as soon as possible to avoid interests piling up. 2. Communicate with your creditors. This will eliminate the perception that you are hiding from your lenders or creditors. Come up with an agreement or modes of payment for your debts. 3. Reduce your expenses. Set financial goals and plans. Budgeting is a key factor to do this. Cutting down on unnecessary expenses through proper budgeting is not easy and will require a proper understanding of the needs versus the wants. For example, if you want to spend on entertainment (such as a movie), it is a better idea to rent a DVD than to go out. Some expenditure busters are really common, like reducing water usage, sell extra vehicles which are otherwise parked in the garage, and many others. Your savings from cutting back expenses may not be realized at first but sooner or later you`ll see the development. 4. Pay your bills on time and pay it in full. Take note on your calendar, planner, or make a reminder of the due dates of your bills. Organize and file your bills, label them so you could easily check which ones are due. 5. Start a savings account. You can start small but as you go further, you can add up. Setting a goal in how much you want to earn gives you a psyche on where you want to go. Set aside a percentage of your income every month and put it in your savings account. 6. Transfer balances to a new line with attractive rates. Make sure you have researched first before doing this. 7. If you`re a couple with joint debt, discuss with your spouse or partner your payment terms. Work with your partner so the burden won`t fall with only one person. After coming up with the payment terms, set a financial goal for your future. This may include college tuitions, vacation plans, retirement plans, relocation plans, etc. Working with your partner or spouse also builds up your relationship and maintains transparency even with financial difficulties. Essentially, you need to realize that you are experiencing financial trouble before you can do something about it. Once you understand that your finances can eventually affect your entire life, then your troubles are already half-solved.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading