You lost your job, or your family experienced a medical emergency, or you simply made a mistake. As a result, you fell behind on your bills and now you have a bad credit report. Can you ever really rebuild? In a word – YES.
It is not, however, easy and there are no quick fixes. It takes time, effort, and may even require a change in your spending habits in order to turn things around. The single determining factor as to whether or not you will be successful in rebuilding your credit history is YOU.
The first step to re-establishing your credit is to fully understand how you ended up in a situation which caused you to be unable or unwilling to pay your bills. This may require that you take a good, long look at yourself and your money habits. It may be painful to admit how you ended up there if you were in any way responsible for the situation, but you cannot fix it if you do not really acknowledge the root cause.
Reasons people have for falling behind on their bills:
- Lack of knowledge about how to manage money and debts
- Job loss or reduction in income
- Unexpected large – and necessary – expenses like medical bills, relocation to take on a new job, or damage to the primary residence
- Letting someone else use your credit cards
- Overspending
To recover, answer the following questions:
1. Which of these reasons applied to your particular situation?
2. Have you resolved the reason that caused the damage to your credit report?
Both answers are equally important. First, understand the reason. Second, make sure the reason has been addressed.
If you do not feel you know enough about money management, read up on the subject online, get books on money management, talk to a financial expert, take a class, or ask family or friends who do understand money management to help you. People love to help and some hands-on guidance is often the best way to learn.
If you lost your job, have you found a new one or are you actively looking for another?
You see the pattern. Once you have addressed the cause, it’s time to build a budget that will let you meet all of your financial obligations – paying for necessities, paying your debts, building a savings cushion, and only buying things you can truly afford. Not always the most fun method of money management but it is the method that builds wealth and security and we only understand just how important those are when we have hit a period where they went missing.
Can reloadable credit cards help you rebuild your credit?
That depends on a couple of things:
Does the reloadable card company report your card activity to credit reporting agencies? Check their terms of service to see if that is the case. Account Now has a Visa and a MasterCard reloadable credit card that can assist in rebuilding your credit history.
Does the reloadable card offer include an opportunity to earn a true credit card after a period of time? Again, check their terms of service. It is much easier to get a credit card with a financial institution with whom you already have a relationship, even if you have previously poor credit.
Do not let a bad credit report stand in the way of you building a safe and secure financial future. Take action today to make a better life tomorrow.
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