Ways to solve the credit crunch
There’s a credit crisis happening right now in this country. Naysayers are spouting that a recession is coming, and optimist types are continuing to spend like it’s going out of style (how many people put their entire Christmas on credit cards due to the cash crunch?)
It’s time to rein it in. There’s lots of options available… budgeting, a refinance on your home, and even debt consolidation .
A few years ago, Ken and I were in a pickle due to bad credit. We’d had good credit up until he was unexpectedly laid off from his job… but within a couple of months on unemployment, we were stretched so thin that we lost our home and got behind on our bills. Fortunately, glory to God, some VERY creative financing enabled us to purchase a home, and we’ve been paying off those bills ever since.
We’d like to refinance our home now, because our interest rate is quite high. However, with so many homeowners going into foreclosure and our credit still not perfect, the bank is content to let us ride with this high rate.
So, we’re looking at some other ways to tighten up. For one thing, we’re trying to sell our van and Kayti’s old car (if you’re interested in either, let me know!). We’re also choosing to eat out less, eat healthier (cheaper) food, and we’re cutting down on the amount of running around we do. Gas may have come down a little but it’s still too expensive!
If your credit is bad, or if you were turned down on a loan and you don’t know why, the first thing you should do is pull your credit reports from all three agencies. You’re entitled to one, once a year, for free. You’re also entitled to one if you’re turned down for credit or a job.
When you look at it, make sure first that everything is accurate and belongs there. Rarely, someone else’s info gets mixed in with your credit report. Or, you might be the victim of identity theft. If that’s the case, contact the credit bureau immediately for instructions.
If all the bills are actually yours, verify that all of that information is accurate and up to date (in most cases, negative information MUST be removed after seven years). If it’s not, follow the credit bureau’s instructions to dispute it. Be prepared to show proof that you paid on time (a canceled check or bank statement), or that the amount is incorrect (receipt).
If you have a lot of bills that you do in fact owe, but can’t afford to pay each one off, you might consider a debt consolidation loan of some sort. Sometimes these tie into your home’s equity - so be very careful not to over-extend yourself. You don’t want to lose your home over your old debts! However, if the consolidation isn’t tied to your home, or if doing so is worth it in spite of the risks, this can be a great way to wipe old balances off your credit report and improve your rating. When in doubt, seek advice from a professional debt counselor.
It can take some time to straighten out bad credit, especially if it was your fault it got bad. It’s definitely worth the time and effort to do so!
February 7th, 2008 at 1:22 pm
[...] Original post by iamhealed.net [...]
February 7th, 2008 at 4:08 pm
[...] post by iamhealed.net This entry was written by and posted on February 6, 2008 at 2:01 pm and filed under Home [...]