Bad credit can make life difficult. If you made some unwise decisions as a young person, you might be trying to figure out how to be an adult with a bad credit score casting a shadow over everything you do. Maybe you carried some bad spending habits from your youth and are still fighting against them. The American Dream does not have to involve living in debt. American poet Ogden Nash said it well, “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them”.
It is time to start taking your debt seriously. It is time to work on your credit score. It is time to start learning how to live your life despite your current credit situation. Being an adult is hard. Being an adult with bad credit is harder. Turn your life around.
Tips for Living With Bad Credit
It is still possible to have a life, start a family and buy a house with a low credit score. It just makes accomplishing these things a little harder. Here are a few tips and things to be aware of. Approach things one day at a time.
Deposits: When you have questionable credit, individuals and businesses are going to need some reassurance that you are not going to leave them high and dry. That is the purpose of a deposit. When you have a low credit score, you look like a risky individual. This doesn’t mean businesses won’t take on that risk. Just be prepared to pay deposits for cellphone service plans and renting property. If you play the game right, you can build your credit back up.
Debt: Your aim should always be to repair your current credit. Just because it is possible to live with bad credit doesn’t mean you should want to. One step in repairing your score is to work towards reducing your debt. If you are in debt, it is time to cut costs and create a budget. No more excuses for why you are living beyond your means. You might be surprised how many of your monthly expenses you can reduce. When you cut costs, put that extra money towards paying off your debt.
Home: You might be reaching a point in your life where you are ready to settle down and buy a home. You can buy a house with bad credit. It just might cost a little more. Be prepared to put a larger than normal down payment on your new home. “The worse your credit report is, the harder it will be to acquire a home loan,” states CreditRepair.com. “That is why it is imperative – before you go house shopping and long before you need to move – to study your credit report and clean it up as much as you possibly can.” Before taking out any loan, make sure you understand the advantages and disadvantages. You don’t want to get yourself in a worse situation. You may have better luck getting a private mortgage.
Cosigners: If you are having trouble obtaining a loan or securing a lease, consider getting a cosigner or guarantor. This is when a family member or friend with good credit signs the lease or contract along with you, agreeing to take on the burden of the loan should you fail to make rent or payments. You should only take this route if you are confident in your ability to pay. You could ruin a relationship otherwise.
Rebuild: It is imperative that you start working towards rebuilding your credit. That is part of living with bad credit. This means being proactive. You might need to pull your credit report and make sure everything is accurate. Fix any errors that might exist. If you have outstanding accounts, make an effort to settle and renegotiate them. You may be able to negotiate a lower amount if you are struggling to pay a debt as long as you show good faith and take the initiative to start a dialogue. Once you get your debt under control, you can start borrowing to rebuild your score. Make wise decisions this time around. Remember the wise words of Andrew Jackson, “When you get in debt you become a slave.”
Many things have an effect on your credit score. You need to be paying your bills on time and make paying off you’re a debt a priority in 2018. As you may already know, bad credit makes life difficult. It can even make it difficult to get a job. Although you can work around a negative credit score, it makes everything just a little bit more challenging.
High-interest rates: You will deal with a high-interest rate on everything. This means your money will not go near as far and everything you purchase on credit will be a little more expensive.
Security deposits: Utility companies check your credit as part of the application process. Even if you have always bad your bills on time, you might be required to pay a security deposit.
Higher premiums: Insurance companies check credit, too. That means your premiums may be higher regardless of the claims you have filed in the past.
Debt collectors: Many times, if you have bad credit, you are dealing with debt. Debt collectors can add a lot of stress to your life.
Purchases: You may have trouble securing a loan. This makes buying a house or car more difficult. You will be forced to save up the money in advance or be satisfied paying very high-interest rates on borrowed money. Higher rates mean higher monthly payments.
Rent: Maybe you have decided to stick with renting an apartment until you can afford to buy a home. Landlords may choose to deny your application if you have a bad credit score. At the very least, you are looking at paying a higher security deposit.
Living life with bad credit is frustrating. Once you get into debt, getting out is made even more difficult with higher interest rates, higher premiums and higher security deposits. Make getting your finances in order a priority this year. Put all your efforts towards turning your life around. Tackle your current debt first. Then, work towards rebuilding your credit. There are ways to continue living your life despite your credit score, but rebuilding your credit can make things much more peaceful in the future.