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In this time of global economic turmoil, anyone can have a bad credit record. Even if you have been diligent with your payments throughout your career, you will suddenly find that you just cannot make the payments due to the fact that your salary has plummeted or you have lost your jobs. Head cuts and wage cuts are the buzz word in human resource circles these days, it`s no longer anything about finding the best minds from the best colleges.

If you are faced with a bad credit situation, there are a number of things you can do. The first step that you need to take is to start becoming current. This is very important because your payment history will make up almost 35% of your credit score. All lenders will want to see a clean payment history with no defaults or late payments.

And secondly, try taking steps to pay off as much debt as possible to your credit card company. The less you owe to the credit card company, the better your financial standings will be. Again, the less debt you have with any institution, the better for your score. You need to remember that no one can give you an exact formula based on which your credit score is calculated, but if you take some steps to remain clean you need not worry.

Thirdly, if you have any accounts in collection you need to settle as soon as possible. This will affect your score up to 40%. The best way to settle is to tell them about your situation and ask whether you can pay anywhere between ten to forty percent of the amount owed. If you explain that this is all you can pay maybe they will remove the faulty item from your record, helping to improve your credit score. They will in all likelihood work with you because they do not want to spend money to send your account to collections.

Lastly, consider hiring a credit repair company that specializes in repairing bad reports from your record. It could either be faulty or true, but in any case you need to handle it swiftly and potently. The longer it stays on your record, the more credit issues you will have. Try to get a debt consolidation loans to refinance your loans and get one single loan to deal with.