Turn Bad Credit Into Your Advantage

Edited by Leomar Umpad, Charmed, Eng

Debts are hard to get out of or even avoid. The sad reality is most people are working all their lives to pay-off debt. You may opt to be part of statistics or make a change in your life by checking on these tips. These steps will help you make your debts, your asset and play with it to your advantage.


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  1. 1
    Assess your debt. Write down all your debt and if you can, categorize those expenses
    From the category, look for the top three. Are these incurred because of your needs? Or are these impulse purchases? From the list you will get a personal reflection of your spending data and this is a good start to analyze and think of ways of trimming down or eliminating those unnecessary spending.
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  2. 2
    Decrease your bad debt. This is not an easy part but you can play with the creditors
    Check for creditors with the lowest interest rates. Then check your current creditors and pay those that have high interest rates. How will you do this? Using your current credit standing, approach those creditors and ask for the maximum allowable cash loan that they can provide. Use the cash to pay-off one of your higher-rate creditor. You should get some rebates from the process and a good reputation on your credit standing. With your new and better credit standing, secure another loan from another lower-interest creditor and fully pay another current creditor. The process goes on a cycle that would have you end up on lower rate creditor and your credit standing on a higher notch.# Enter step 3 here.
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  3. 3
    Make a time-line to pay-off bad debts one by one
    With your current creditor, make a deadline on paying them off completely. It may not be soon but making a time-line gives you a sense of completion. You may be able to see how far you have gone and how far you would still have to go to completely pay-off those debts.
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  4. 4
    Invest. Do not be afraid to invest
    Try to learn the art of investing and surely you will get some passive income on your purse. There are always risk associated with investment, but you can always lower it down by being contented with the small earnings from a stable source.
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  5. 5
    Trade it in. Do you have a luxurious car
    Can you do without it? Trade it for a lower-class car and get some cash to pay-off your debts. Do you have a big house and lot with only you, your wife, and a dog in it? Can you do with a smaller one? Sell that bigger property and get a smaller one. Aside from the cash you get from the trade off, property taxes would be lower. Money generated from these trade-offs can slash your debt.
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  6. 6
    Spend. Do not be a fool and go to a "no-spend" mode when attempting to save
    Always know that you get to save more the more you spend. This is true when buying bulk items. Aside from getting volume discounts, you get to save gas and time from frequently going back to shop.
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  7. 7
    Stay in debt. When you are free from debt, or at least are confident that you can pay your debts anytime, stay in debt
    Do not kill the credit standing that took you years to build. Feed it. However, only borrow money for investment purposes or get items that would pay-off their purchase price eventually.
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Tips Tricks & Warnings

  • This is not an easy task but little by little you will get the hang of it.
  • Always make sure to check on the other creditors who are willing to go way lower than your current ones.
  • Remember, no credit standing is bad credit standing.

If you have problems with any of the steps in this article, please ask a question for more help, or post in the comments section below.


Article Info

Categories : Noindexed pages | Financial

Recent edits by: Charmed, Leomar Umpad

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