How To Live With Your Bad Credit History

If you’re suffering from debt thanks to your poor credit, you’re not alone – more and more people around the world are feeling the harsh pinch of the global credit crunch.

Between increasing job losses, salary cuts and the rising price of oil, your money is probably going towards other things before you can even think about reducing your credit card debt!. However, while feeling as though your budget is being squeezed is no fun, during these uncertain times it’s ideal to work on your credit score as much as possible.

But how can you tackle credit card debt, especially when there’s no room in your budget for the challenge? It’s easy: follow these steps down to the letter, and watch as your debt – and your credit score – starts to look up!

Enroll In An Automatic Debit Program. Haven’t done this already? If not, you’re really cheating yourself out of a great way to ensure that all of your credit card bills are paid on time, with little effort on your part. Automatic debit takes money for credit card payments out of your bank account, so you’ll always pay your bills on time without worrying about overdue payments and their effect on your credit score. And since your rating is mainly composed of your payment history (35%), it’s an ideal way to get one of the major factors that makes up your credit score down pat.

Don’t Avoid Credit Cards. It may seem like a contradictory thing to do, but when battling against credit card debt, don’t shun all plastic. In fact, keep at least one card with an open credit line around, as a large part of your credit score is determined by your debt to credit line ratio (30%). If your cards are maxed out, rework your monthly household budget to find extra money that you can put towards your cards at the end of the month. You’ll be surprised at how much extra cash you can throw at those annoying balances, which will set you up for a victory against that toxic credit card debt.

Get A Prepaid Credit Card. Once again, you might be tempted to avoid all forms of plastic at all costs, but there are cards out there made for consumers just like you. It’s no secret that using a credit card responsibly will help you maintain a good credit score; but if you’re just starting out on your financial education, get a prepaid credit card to help you avoid any impulsive shopping sprees. Prepaid cards are viewed the same as ordinary credit cards by the credit bureau, so you’ll still get the benefit of boosting your rating. A deposit of up to $500 ensures that you can’t max out your card, as lenders will use the deposit as collateral against your spending. It’s a great way to stay on course while fixing that credit score!