When we take out a loan, we do so when we know for certain that we have a job to back us up. You get the loan, you pay every month from your paycheck, you close the loan; this is the ideal course. However, nothing is certain in this life, and this goes double for jobs. You have no idea when your boss’s company may go bankrupt, leaving you unemployed for several months. If you also have the bad luck of having loans to pay off, then the situation is even worse; by the time you get another job, your credit rating will be in shambles.
So how can you do some credit repair once your rating is already like this? Well, your credit may be dying – but it’s not dead. With a bit of work, it can be revived. Once you have a steady job again, here’s how you can go about it:
Find Out What Money You Can Use
The first thing that should concern you is exactly how much you’ll be making on your new job. What kind of lifestyle can you afford if you want to put your credit back on track? Remember that you also have taxes to pay, so you’ll be lucky if you can at least take 60% of your pay home.
Make A New Household Budget
If you changed your job, the chances are that you no longer have the same salary – so you will have to update your budget for the house. Include all the known expenses, and place aside the minimum for each debt payment. Paying extra will help you build up your credit, but you might want to figure out what your monthly expenses will be first. Once you finish budgeting, add whatever leftover money you have on credit repair and catching up with your debts.
Hide the Credit Cards
The more credit you use, the more you’ll continue to kill your score. Credit repair means that you will have to let your credit heal – and that will not happen if you swipe that card each time you’re thinking of buying some household item. Now that you have a job again, you should try depending on your income more rather than on credit.
Try freezing your credit card or simply put a sticky note on it. This will remind you of your intentions and make you think twice about whether or not to use your card.
List Out Your Debts
Credit repair asks for debt management of a high level; so you may want to take note of which debt is on track and which one is overdue. For those that are past their due date, note the number of months and amount of delinquencies. Having a clear image of what you need to do should make it easier for you to catch up.
Set Your Priorities
Figuring out the order in which you should catch up with your credit repair is not difficult – especially if you have more than one debt to juggle. Your mortgage should always come first, particularly if you don’t want a foreclosure on your home. Next comes your car loan – otherwise, your vehicle might get repossessed. To avoid any issues, you may want to contact your lender and see if there’s anything that you can do to push the due date until you are all caught up. Make the minimum monthly payments, and little by little, your score will start healing itself.
Keep in mind that utility bills such as your mobile phone, Internet, or cable will not affect your credit if you make your payments on time. The only time when this might become a problem is if you let them go a lot past their due date. If you have services that you no longer use, you might want to cancel your subscription. It’s one of the first steps towards credit repair.
Get Positive Info Off Your Report
Every now and again, you may want to request to see your credit file. Depending on the company, you might be able to do it for free once or twice a year. This way, you’ll know exactly what route to take.
Several tactics will bring you positive info on your credit score. For example, timely payments will be able to slowly but surely heal your credit. If your accounts have been closed, you might want to open a new one to use solely for credit repair – which means that it is not for use but to act as a safety net. The last thing you need is even more debt.
With a solid plan and a little bit of discipline, everyone can successfully build their credit score. You’ll just have to be patient enough and responsible with your purchases. For further help, you may go for the services provided by www.cleancredit.com.au. They will help every Australian in need of urgent credit repair.