What to Do When You Have Bad Credit

Improved-CreditIf you have applied for a loan or a credit card and got denied because of bad credit, you are not alone. Millions of Americans have poor credit histories and, as a result, have a hard time borrowing and establishing new lines of credit. Don’t fret. There is a way to rebuild your credit standing.

  • Examine why your credit is bad. Obtain a free copy of your credit report (you can receive one free copy each year) and review why your credit is poor. In most cases, people have bad credit because they don’t pay their bills on time. Items like foreclosures, repossessions, and unpaid bills on the report will bring your credit scores down.
  • Establish some goals. One of the things you can do is to develop a budget. Budgeting will help you see where your money is going. List all your expenses as well as income and develop a new spending plan. Set a goal of paying down your debt to become debt free. The goal could be as broad as becoming debt free within a set amount of time or as specific as paying $200 each month toward a certain debt.
  • Consider debt consolidation. Often, those with bad credit have credit card debt. Paying off this debt can be a difficult task, but the results will do wonders for your credit scores. If you have a vehicle, one thing you can do is take out a car title loan. These loans are short-term you can repay them within 12 to 14 months. Embassy Loans has helped tens of thousands of customers get access to cash quickly for things like debt consolidation. Car title loans do not depend upon credit either making it easier for someone with poor credit to borrow.
  • Do not establish new lines of credit. To increase available credit, some people try and open new credit cards or apply for personal loans. Establishing any new lines of credit will raise a red flag and normally further damage an individual’s credit history. Likewise, it is not a good idea to close unused credit cards thinking it will raise credit scores. There is a delicate balance between having too many and too few open lines of credit.

Fixing one’s credit history takes time and, most of all, commitment. Spending patterns must change, and an individual has to maintain a dedication to paying off debts. Raising a credit score will not happen overnight and many times can take over a year before results you realize there’s a problem.