How to Recover from Horrible Credit

By Tamsen Butler

November 12th, 2008

Bad credit can happen to good people. It’s easier than most people realize to fall behind in bills, especially when an unexpected job loss happens or if you suddenly get sick and cannot bring in an income. People who have always stayed on top of their personal finances very well can find themselves in big trouble with credit when something unexpected happens and turns everything upside down.

If you encountered a problem that ruined your credit then you might be wondering if there is any way to dig yourself out from under the umbrella of “Bad Credit.” You probably already know that it’s worth the effort since you’re more than likely paying incredibly high interest rates on any credit you’re approved for…if you’re even approved for anything at all. You might wind up losing out on a certain job because of the horrendous state of your credit report because, after all, employers want people who are trustworthy, and someone who doesn’t pay their bills may not fit their perception as an ideal potential employee. You might wind up losing out on a certain home or apartment because landlords are rarely anxious to rent to people with low credit scores. In other words, you know that things would be much easier if you had better credit.

So what do you do when the time comes to recover from bad credit? If you have a previously solid credit history then you’re fortunate; you can demonstrate that you paid your bills well until something happened to prevent you from paying on time. On the other hand, if the only items listed on your credit report are negative then you’ll have a longer road ahead of you.

Here is what you should do in order to recover from horrible credit:

Pay your bills. Pay everything on time and without fail. You can’t afford to have any more late payments on your credit report.

Build back up slowly. Just because a creditor is willing to give you a credit card doesn’t mean that it’s the best idea. You might be anxious to get your wallet filled back up with credit cards but remember that slow and steady wins the race.

Deal with your delinquencies. If you have accounts on your credit report that are still delinquent, consider contacting the creditor and offering a settlement amount. Although it’s preferable to actually pay off the accounts in full, paying them off for less than the original amount of the debt is better than not paying them at all.

Be patient. You can’t expect the blemishes on your credit report to disappear overnight. It might take you a couple of years to build up a respectable credit score, but stick with it because it’s worth it.

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How to Recover from Horrible Credit

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