Bad Credit Consolidation Loan by Geoff Kitkat
Wow! One day you got a financial shock!
How? You went into your favorite hardware store, and placed an order for a new fitted kitchen, asked for easy terms and Bingo! Your credit application was turned down.
Well, apart from being a trifle embarrassing, what can you do to repair this situation, or even make darned sure it never happens to you in the first place?
Well, the first thing you should do is to contact one of the big credit reference agencies, such as Equifax or Experian, and ask to look at what the financial world sees in you.
If your credit score is less than perfect take comfort in knowing that you are not alone. Assuming that you have not been the victim of Identity Theft ( not dealt with in this article) many banks will discuss with you the offer a bad credit consolidation loan to someone who is in need.
The benefit of getting all of your bills paid off and in one comfortable place is important when you are trying to repair any damage that may have appeared on your credit report. The important thing is in fact to realise that you are in this jam well before you start to get into heavy debt chasing letters, or even worse, staring financial ruin and bankruptcy in the face.
First of all, many people automatically think that their past transgressions will have completely ruined their financial lives forever. Nothing however is further from the truth. But, you have to take the appropriate steps to making things right before they become totally unmanageable. A bank will understand that you need a bad credit consolidation loan to help you lower your monthly payments and get yourself back on a financially stable platform.
After reading your Experian or Equifax credit report, you may have put in a lot of effort into undoing some of the damage that is immediately apparent on your publicly viewable credit report. You may also have found that this is a nigh on nearly impossible task unless you lower your monthly payments.
One alternative would be to approach all of you r existing creditors and see if they would cooperate with you on lower payments, but a better way for you if you can is to explore the possibility of getting a bad credit consolidation loan so that your monthly payments can be reduced. However, make sure you are not jumping out of the frying pan in to the fire, by taking out a loan with some very nasty small print in there if you were to default. In other words, give any loan shark a wide berth and make sure you use a public institution such as a bank to approach in this matter.
Having lower monthly payments will help you stay on track and in control of your financial life again. Once you are able to make consistent payments you are more likely to get ahead of the game. Getting a bad credit consolidation loan in place is the first step into getting your financial life under control. However, there are some caveats that I will outline now.
Assuming that you are in a financially strong enough position to go and get a bad credit consolidation loan , the last thing you should do is go out there with your flexible plastic friends and do it all over again. This will only put you back to square one. Resist the temptation of getting those credit cards out during the holiday season. It can be difficult but you have to remember the purpose of the bad credit consolidation loan in the first place.
Once in a while, draw out some cash from your bank and instead of flashing your ‘flexible friend’ everywhere, dip your hand in your pocket, and pay by CASH! Shock people! In fact, try staying in one of the popular hotel chains for a brief break, and then try and settle up with real money! You will find that they don’t like it – or won’t even accept it!
The trouble is, we are all getting so acclimatised to spending on credit, we are forgetting the simple anti-bankruptcy fact of life, that if you haven’t got it, you can’t (or shouldn’t) spend it! The idea is to get your monthly payments under control, and making sure you draw up, and stick to, a proper month y budget. See where you a re at financially before you make any future purchases.
Adding to your debt after consolidating will only lead to more trouble in the long run. It could well lead to bankruptcy and at least 7 years of you being in a real financial wilderness for that time.
Make sure you learn from your mistakes, so you manage to avoid making the same mistakes in the future. A bad credit consolidation loan gets rid of debt. Try not to build more of it.
Now this next piece of advice may seem like a contradiction but it really isn’t. You should really avoid closing any or all of the accounts you brought into the debt consolidation loan. You want to have the line of credit there waiting if you need it but you don’t really want to use it. It also actually makes your credit score look a lot better, as you have this available credit visible on your new credit report.
I know it sounds crazy, but in this world, if you had no debts at all, not even a mortgage, and have cash coming out of your ears, guess what? You would probably have a lousy credit score as you would be an ‘unknown entity ‘in the financial world.
Crazy isn’t it? If you are struggling with your monthly payments but you are afraid that you will be turned down because of your past mistakes try to get financing anyway. A bad credit consolidation loan could be the key to the proper control of your life that you are looking for.
Geoff Morris is an Internet Entrepreneur who quit his corporate job many years
ago, and is no stranger to risk-taking, or examining how to fix bad credit. Take a peek at some of his real life solutions on actual debt relief at http://www.badcredithelponline.com