Credit Repair: A Do it Yourself Road Map

By Johnathan K. Bakers

As certainly as you built the debt that you are faced with, you can tear it back down. It requires taking a hard look at your personal financial situation and the debts you currently carry in an attempt to create a credit repair strategy. Debts are the bills we owe to creditors who have provided items or services in exchange for a promise of payment. One of the most common debts is that of credit card debt. Most creditors are very persistent about trying to collect monies owed to them, but when asked, they will usually extend the pay back time if you seem sincere in making full payment. Part of doing business it the concept of return clients and many creditors build their credit and collection processes around working with clients to ensure that they will, in fact, return again.

Unfortunately if you don’t talk to your creditors to explain the financial difficulties you are facing, they will turn your account to collection agencies. Once the agencies are involved, it becomes what often times feels like a personal vendetta against you as they call incessantly at work, at home, send letters and threats in an attempt to collect the debt. Some agencies, though certainly not all, will even break the collection laws in hope that you won’t realize what they have done and just pay the debt. The collection agency doesn’t really have a personal vendetta against you. They are, however, paid a percentage of the bill in exchange for collecting it. They follow the money trail and to be honest they don’t care what financial implications their actions may have upon you and your ability to maintain room and board. They are simply chasing the money.

Tearing down the mountain of debt you have built up will have a secondary benefit of repairing your credit. You should contact each creditor and work with them to set up a debt management plan that is feasible for you in your current financial state. After you have done that you can finalize a budget plan that will act as a road map to you as you eliminate each of your debts, one by one. Once you have determined your budget, you will need to ensure that you have an account available to make the payments out of. A checking, savings, or money market account works well, but if your creditors are more easily and efficiently paid on line you may want to consider opening a Paypal account and applying for a debit card from them. Paypal accounts often have rewards attached to their debit cards that actually returns 1% of anything spent with a cash reward returned to the account. Money back, even only 1% is a plus at this stage.

Collection agencies are a negative drain of energy. By setting up a plan that alleviates the threat of collection, things seem less stressful and more manageable. If you find that you are unable to either create your own budget or contain your spending within that designed budget there are other debt reduction and credit counseling resources available to you. They can help identify spending habits and behavior modifications to assist you in reaching your goals without incurring additional new debts. For low income or individuals with bad credit there are even government loans and grants available to help ensure your success. A professional credit counselor can help you identify the various possibilities available to you that can tear down

Focusing on the topic of investing, the columnist writes first and foremost for http://www.debtania.com. His publications on how to eliminate credit card debt are found on http://www.debtania.com in addition to other online publications.