How Do I Fix My Credit?

by Amy Green on December 5, 2009

Paying yourself first is an excellent way to get yourself out of debt. Its one of the methods I used while I worked to fix my credit. There was a great article about how to do this recently in USAA Magazine. The idea is to make yourself a creditor. Pay 10% of your income to you first, then handle your bills. A couple of very positive things happen while you do this. One, you have an emergency fund to call on should disaster strike. Two, you have comfort of knowing that disaster fund is there. Treat the payment to yourself with reverence. Having money in the bank is a big step in your journey to erase credit card debt.

Once you’ve made the payment to yourself, then attack all your other bills with the snowball strategy. For those who are just checking in, the snowball strategy is putting the maximum amount of money against a single, normally the largest bill. Everything gets a minimum payment except for the bill under attack. Once the biggest bill is gone, turn the same attention to the second highest bill. You move forward through your debts until everything is gone.

Getting a handle on the question how to fix my credit about three areas of attack:

First, stop spending. Unless you have to have it for survival, do not spend additional money. Its what got you in the hole in the first place.
Second, get your free credit report at annualcreditreport.com to see where your problems are the biggest and give yourself a starting point.
Three, gather all your bills and rank them by minimum payments and interest charges. Then begin your debt snowball strategy.

There are other techniques you can use to help you with the question of fixing credit. Direct negotiations with your creditors is one strategy. Using debt consolidators is another.

While I worked to fix my credit, everything was focused on getting out of debt. Your focus and relentlessness will be key to achieving results.

How Do I Fix My Credit?

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