Saturday, December 16, 2006

Slow And Steady Is The Best Way To Clean Up Bad Credit

A bad credit problem can influence your every waking - and sleeping - hour.
There are few things more worrying than wondering how to make ends meet, and
when your outgoings, comprising loans, cards, hire purchase deals and such
like, are biting huge chunks out of your income, it really can look like an
impossible thing to sort out.

One major problem is denial. Although you're well aware of the debts
intellectually, there's an emotional block on them. So to start with, write
down all your outgoings, what are their values and how long you have left to
pay them. This, of course means everything. You have to be honest with
yourself.

It could be time to consider a consolidation loan. You can take out one big
loan with a long repayment term and pay a small amount off every month. For
the first few months it might look like nothing is happening, but persevere
and you will eventually see that your payments are taking larger and larger
bites out of the consolidation loan. Hopefully by now you'll have cut up
your credit cards, because the last thing you want is to be paying off more
debts. Self-discipline is key. But the interest will be a whole lot more
manageable.

You can also look at what else you're spending your money on.
It's amazing how much of our money we waste on needless purchases. It's also
a good time to start shopping around.
Prices of essential items vary widely from store to store; saving five pence
on a tin of food might not seem much, but remember, this is for the
long-term, and you'll be making savings all along. Keep all your change in a
jar and once every few months put it in bags and deposit it in your bank
account.
Wherever possible, buy in bulk - either from a wholesaler or by using
supermarket multipacks or two-for-one offers. And if you're insisting on a
holiday, remember what a beautiful country you live in!

So the sequence is: accept, calculate, consolidate, economise.
You have to change your mindset completely, and accept that your recovery
will take time and that these seemingly small savings will, over several
years, lead to a new start. You won't have to change your lifestyle too
much, just do the same things in a different way.


About The Author: Clive Willis is a recognized expert on all personal money
matters. His opinion is featured on many sites including the Crazy Credit
website - a guide to the personal credit world. http://www.crazycredit.co.uk

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