Do it yourself Credit Repair
You have reached the point in your life that you realize that you need to make some drastic changes in how you manage your spending and credit before you reach the point of no return. You do not want to rush into “debt consolidation” or use a home equity loan. You need to have a plan that is worked out very carefully.
First of all, you are going to need to collect all your credit reports, credit card and bill payment records, mortgage and loan information. It is likely that some of your repair activities will be going on simultaneously. Debt worksheets are available online to help you.
Be meticulous about ensuring that your credit reports (there are 3 major credit reporting agencies) are accurate and truly reflect your credit status. To complete this project may take some written communications with one or all of the credit reporting agencies. Stay with the process.
Record in black and white all of your financial obligations. This will affect the money management part of the plan. Do list all credit cards in order of highest to lowest interest rates. Also include the monthly minimum payment required for each card.
Now need to know your DISPOSABLE AND DISCRETIONARY INCOME. These “d” words are significant for your plan. Disposable income is the amount of money that comes out of your salary to cover necessary obligations like mortgage, food, utilities, insurance, car, credit cards. Subtract total disposable income from salary, you have discretionary income, the amount to be applied to debt.
Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won’t be a fast process.
To immerse yourself in this change of pattern of handling money, you need commitment and will not feel comfortable for awhile. Lifestyle changes are needed. You will need to cease unnecessary spending, buy only essentials, avoid travel, eat at home, pay bills on time and stop charging.
The bottom line of the situation is that you are responsible for creating it. There is no credit angel. You need to fix it and use smart money management techniques to maintain your repairs.