Sometimes it seems like good credit is needed to enter just about any life-changing situation, from getting that great apartment to landing a solid job. Those with bad credit can feel as if their destiny is to always remain behind. However, many ways exist to get around the credit issue. In the process, you will pick up some helpful habits and clean up your financial past.
Pay cash. One of the best ways to get around bad credit is to live by a simple rule: If you don’t have cash, you cannot afford it. Set aside a certain amount of the green each month or week for your bills or bigger purchasing goals. If you need a clearer idea just how much you spend on various living costs, keep tally of your receipts and add up what you spend in categories such as food, gas and household items.
Get a secured credit card. Even those with bad credit can still get cards that work the same, even if the downfall is a higher interest rate. Unlike a typical unsecured card that offers no collateral for the collector, a secured credit card is opened up using a sum of cash that remains stored in your account like savings. The money is yours, but becomes the banks should you fail to pay your bill. This credit card is more for building credit repair than for falling into old habits. Use sparsely, pay the bill in full and pay it on time.
Correct or update financial information. The best babysitter you have when nurturing your credit report is yourself. Don’t wait for adverse information to just fall off your three credit reports. Find out about the statute of limitations for your state or otherwise known as the length of time you have left on a negative account before you can ask the agencies to remove it. If it is years from now, you have the legal right to send a statement explaining why the account is negative, which shows up on your report.
Show proof of a new financial path. Just as your credit report leaves a trail of negative information, it states the positive too, like the fact you’ve been paying your bills on time for the last six months. If your past becomes an issue with a potential landlord or employer, point out the solid proof you’ve committed to turning your financial ship around.
Stick to a budget. You most likely got into bad credit waters by swimming in over your head when it comes to everyday financial matters. Are you stuck with a car loan just because Cash for Clunkers sounded good at the time? If you really need a vehicle, instead of relying on fast deals or even good credit to land you a loan, set aside a reasonable amount each month into savings until you’ve accumulated enough to pay cash.