Whether you are talking to a bad credit refinance expert or a mortgage professional, you need to be honest when discuss any credit problems you may have had. Unemployment or illness are legitimate reasons for a person having financial difficulties which may lead to credit problems, and a responsible, professional lender will know this. Your credit may not be that bad, even if you had problems in the past, if you have made on time payments for at least a year.

There are four ways to control any current excess debt you may have.

It may mean making hard choices and changes in your lifestyle, but it is possible to reduce your expenses to keep your credit from falling into poor shape. Try getting a non secured signature loan, or a loan from a relative, using the equity in your home; or think about selling that extra car, jewelry, family heirlooms, cashing out your retirement benefits, or even selling your home and then renting in order to pay off your debts. – If, however, you have damaged credit and cannot do any of the above offered choices, go to CCCS (Consumer Credit Counseling Services). The number for the local office will be in the yellow pages of your phonebook. The CCCS may be able to help you avoid actually filing for bankruptcy while being able to pay off your debts as if you had filed a Chapter 13. — However, you need to consider filing for bankruptcy if the CCCS can’t help you. Your credit won’t suffer as bad as it would if you filed a Chapter 7, but a Chapter 13 takes longer. You get up to 5 years after filing a Chapter 13 bankruptcy to pay off your debts. Unfortunately, not only are you actually in the bankruptcy for 5 years, your credit report will have the bankruptcy on it for an additional 7 years even though you have finished making your payments. — Sometimes, when your debt is so severe there is no possible way to pay it all off, a Chapter 7 bankruptcy is the best solution. Future financing may be a difficult thing for you to obtain.

Remember, making your payments on time every month is the best way to improve a bad credit history, even and especially if you have taken control of your debts. When you mail in your payments, use the pre-addressed envelopes that are sent with your statements; and if you don’t get your statement at the usual time, call the company. When you are carrying a balance, send in your payments as soon as you possibly can. This will decrease the amount of interest you have to pay, since interest is calculated on a daily basis by most companies.

Do not send cash through the mail. Send a money order, being sure to keep the receipt, or get a checking account if you don’t already have one. If you are moving, make sure to send your new address to your creditors. List your debts and when the payments need to go out, if you are concerned about making your payments on time. If you think making the monthly payment is going to be a problem, contact your creditor and set up a payment schedule. Do this immediately. Remember, it’s not the day you send your payment that the creditor cares about, but the day they actually get it. Expect a payment sent through the post office to take about five business days to arrive at it’s destination. You can end up with higher interest and late fees if your payments are not on time; and, of course, a bad mark on your credit report.  Improving your credit is possible through consistent, diligent work.



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During a crisis, it is nice to be able to charge an item and pay it off over time by using a credit card. Unfortunately, it’s very easy to end up putting more on the credit card than you can afford to pay off. Pay any balance you owe on a credit card as quickly as possible in order to cut costs; and be sure to use the card with the lowest interest rate.