If you have a low credit score, it may feel to you as though you’re stuck with this blemish forever.  Even if you have made the effort to bring all your accounts to current status and have done every single thing you can think of to improve your score it can still take quite a bit of time for your credit score to reflect your hard work.

It can be a tedious task to build your credit rating back up after financial problems, and many people find themselves discouraged and ready to give up.

Here is what you need to know: It can be done.

A person with horrible credit is not doomed to have horrible credit forever unless he or she refuses to make an effort to correct past mistakes.  Even the worst items on credit reports eventually fall off due to the number of years something can be reported to the credit bureaus, so in essence this makes the entire process boil down to a waiting game.

Suppose you get your first credit card when you are in your early twenties, and because you don’t have much experience with credit you allow payments to go late and you exceed your spending limit quite a few times.  Then you get a couple more credit cards, and before you know if you’re a couple thousand dollars in debt and you have collectors calling you constantly.  You change your phone number, chop up the credit cards, and pretend as though it all never happened.

Because they can’t contact you, the creditors charge off the debt and your credit report paints the picture of a person who is generally not trustworthy with debt.  You have a low credit score, and there is no way any lender will extend credit to you.

A few years down the road you get to thinking that maybe this is something you should take care of.  You contact the lenders and offer a settlement on the debt.  Another year or so go by and you get your hands on a credit card with a high interest rate and low available balance.  You pay this bill meticulously, and then eventually get a car loan at an embarrassingly high interest rate.  You pay this bill meticulously too.

Years go by and you continue to pay your bills as scheduled, and you start getting offers for better credit cards and loans.  Though it took some time and effort, by the time you hit your early thirties your credit score is great and you’re ready to get a mortgage loan at a premium rate.

Yes, it takes time to build your credit back up, but always keep this in mind: You are not stuck with your current credit score forever.  If the thought of spending years correcting your past mistakes seems like too much effort, just ask a parent how quickly a few years go by.  The parent will probably respond with this: “A few years can go by in the blink of an eye.”

If your credit is wrecked then start taking the small steps now to fix it.  Years down the road when you can march into a bank and expect the best interest rate on a loan they have, you’ll thank yourself for putting forth the effort.

We learn a lot from our parents: what type of food to eat, how to behave in social settings, and what values are important are just a few. Sometimes parents don’t even realize what an impact they have on kids, but nonetheless, kids are always watching and always learning.

You probably learned a lot from your parents about personal finances. If you take a look at the way your parents handled their finances you may come to realize that it has great bearing on how you handle your personal finances as an adult. You might discover that your parents intentionally taught you very valuable lessons about handling money, or you might realize that the way your parents handled money really set you up to fail.

Here are some things to consider about how your parents handled their finances:

Did they use credit wisely, or did they use it with reckless abandon?

Were finances never really a problem, or were your parents constantly scrambling for money to pay the bills?

Did your parents intentionally teach you about personal finance, or did you enter adulthood with no idea about how to navigate personal finances?

If your parents prepared you for adulthood by giving you a comprehensive education in personal financial matters - while also leading by example and handling their own finances efficiently - then be sure to give mom an extra Mother’s Day hug.

If your parents didn’t handle finances well, or didn’t bother to teach you about the proper ways to manage your finances, then it’s time to realize that you don’t need to follow their example. It may not be easy to take on the task of getting your finances in order despite the ideas you have in your mind about how money should be handled. After all, coming to the realization that your parents may not have taught you something properly can sometimes be a rude awakening.

If you are in this position, realize that you’re a grown-up now. Break the cycle of living paycheck-to-paycheck and hiding from creditors. Now is the time to get your personal finances in order despite the bad example your parents may have exhibited.

Far too often consumers are so concerned with what their interest rates are that they never take a step back and look at the bigger picture.  While low interest rates for debt are great and high interest rates for savings are fantastic, the interest rate should not become the be-all, end-all reason driving people to put their money in certain places. 
 

The interest rate you earn on an interest-bearing account should not be the only reason your money is parked there.  In other words, look beyond the interest rate.
 

What about fees? It doesn’t matter if your credit card has a 0% APR if you are paying a fee every month just for the privilege of carrying the card around in your wallet.  Your mortgage loan’s interest rate might be lower than everyone else on your block, but your neighbors may not have a costly prepayment penalty or Private Mortgage Insurance with every payment.  Some fees are inevitable when dealing with debt, but some lenders will offer low interest rates to get your attention and then hit you with a barrage of fees.
 

Fees apply to savings too.  Why in the world should you pay a fee every statement cycle for your savings account? Your money should be earning interest without having the balance slowly whittled away by fees.  There are simply too many financial institutions offering feeless interest-bearing accounts with impressive interest rates for you to keep your money in an account that is getting constantly bombarded by fees, regardless of the interest rate they give you.
 

What about your needs? You might have a credit card with a low interest rate, but would you be better served by a rewards card with a slightly higher interest rate that allows you to accumulate cash, travel benefits, or more? If you are the type of person who regularly utilizes a credit card, yet always pays the balance off each month, then a rewards card can result in some really attractive bonuses.  You can apply this same logic to an equity loan.  Yes, you will probably pay a higher interest rate for a fixed equity loan, but isn’t that better than having an initially lower adjustable interest rate that has the potential to shoot sky-high when interest rates rise?
 

Savings accounts should be about more than interest rates.  Examine the reason why your money is in savings.  For example, if you’re building up an emergency fund you won’t want this money to sit in an account with a high interest rate which also happens to be quite risky.  Losing your entire emergency fund due to a downward swing of the market is bad news.   
 

A low interest rate for credit and a high interest rate for savings can be a great starting point to grab your attention, but a savvy consumer will know that there are other aspects to take into consideration.