How To Repair Your Credit When Creditors Start Calling

There is no answer for all of us, but there is an answer for us all individually.

Let's take a look at an example ...

Let's assume your paycheck is $240 each week, your debt is around $5000 and you can't seem to see a way out.

Now let's say you have two vehicles, both of which are paid in full, and a monthly rent that equals $400. We know that you only have around $640 per month to purchase food, pay utilities, buy clothes, and other items needed to survive. We can't forget the phone bill. This sounds like an impossible situation, but in reality there is an answer available.

Now, if your phone bill is around $90 per month and you spend around $50 per week on groceries, $50 per week on gas and around $150 per month on utilities, then by the time you are finished adding this all up you will see that you don't have a dime left at the end of the month. Therefore, the solution is to find a job that pays more, search for a low-income apartment that bases the rent you pay on your income and using less utilities per month.

You can easily spend $50 on groceries and not get enough to make it to the next week. Therefore, is it possible you can eat foods that are less expensive and last longer? I am not suggesting that you try to live off eating cans of pet food. You can. however, switch temporarily to "no frills" brands until you get back on your feet financially. The sad thing about people who are struggling, is that they often envy those who are doing slightly better than they are doing, or strive to purchase items they don't really need. Instead of paying their bills on time, they often pay a portion of the bill and then buy things that are not necessary.

If you have two cars, it may be wise to sell one of the cars and apply the balance toward the bills. You can see from this deduction that more money is needed to survive. Why are you paying $400 for rent when there are many sources available that offer you rent for less? Now let's turn this around. What if you successfully rented a low-income apartment? Let's say that your rent amount is reduced to $200 per month. This leaves you an extra $200 per month to pay utilities, buy groceries, pay insurance on one car, pay your phone bill, and have a couple of bucks left over each month. This is one solution and it doesn't bring forth much, but it does bring forth a small reward.

Now, if you can reduce your utilities to around $100 per month that is another $50 you could spend on bills. If your credit history is delinquent, yet you are not drowning in quicksand, you might be eligible for a credit card. The solution is not to get the card to buy items, rather it is to get a card that will help you make your monthly bills and allow you room to repay. Make sure the card has low interest rates and there are no annual fees attached. If you can get by without a credit card all the better, but the fact is that it is nearly impossible nowadays to move around without a credit card.

If you can get a job that pays more for your work, then this is helpful too. The downside is when people get better paying jobs that often take it for granted and land deeper in debt. The more money you make the more you will spend.

Another trap is what my wife calls "spending money on futures." What this means, is spending money now that you think will come back to you in the future. For example, your accountant may let you know that you have a tax return of a few hundred dollars coming back to you in a couple of weeks time. You then decide it's a good idea to buy that home appliance you were looking at using your credit card, because the money that you will receive from the tax office will cover that expense when the credit card statement is due. In reality, that money that you are expecting is already accounted for, because you have outstanding bills from last month to pay, so spending money on the home appliance is really spending money you do not have. It pays to be careful with your money, therefore, and to stay alert to your credit situation to keep a credit repair in place.

When creditors start calling, it is time to repair your credit, so get ahead of the game before the phone rings.

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Please note that the information contained on this website is for information purposes only. We strongly suggest you seek professional advice from qualified and competent financial advisors, before making any financial decisions based on the information provided on this website. See our disclaimer for full details.

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