When 68 million Americans have a bad credit score, it’s a significant chunk of the economy. This means they are unable to participate in lending activities which put a damper on both the housing market and manufacturing. Those who wish to get out of this cycle may have a hard time, but it’s not impossible. Here are some tips to beat the bad credit cycle.
Save Up A Rainy Day Fund
It may seem strange to save up money when consumers find themselves in the thick of things. Financial gurus such as Dave Ramsay, believes this is the fastest way to get out of the debt cycle is to save up $1,000 as fast as possible. Although this may not prevent all cash flow mishaps, it will make a sizeable difference to an emergency situation. Once this is in place, consumers have more freedom to push funds into other areas that require financial attention.
Consumers are not always sure about the correct way to approach their debt and are often left in the dark where their rights are concerned. Companies such as Sky Blue Credit Repairs (https://
Take Stock of the Debt Every Month
Not only is it important to ensure that a budget is in place, it’s also critical to know exactly what is owed on the different items. This means knowing at the end of each month where each bill is and what it will take to bring the figure down. Once a bill is paid off, it may be a good idea to add that amount paid to the next bill in order to clear it off sooner. As these debts are paid, check the credit bureaus to ensure that the correct information is displayed.
Once the debt is paid off, it can take months for the credit rating to pick up. Consumers are recommended to try and lower their credit limits and pay off smaller debts to get their ratings up faster. Although this may seem like a lot of work for the consumer, old items and items that are not updated can do unnecessary harm to a credit score.