Fix Bad Credit

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fix bad credit

Fix bad creditYou won’t begin to fix bad credit until you fix your bad debts. Here’s why that is. Suppose you are lucky enough to get a bit of new credit. You take good care of that new credit. You always pay it on time. The problem is that the good credit you try to make gets drowned out by all the noise of the bad debts. The result is your effort to fix bad credit doesn’t get you anywhere.

A recent survey says that 68% of Americans will destroy their credit by the age of 30. Are you one of them?

There are four different ways you can resolve your bad debts and begin the process to fix bad credit.
  • Keep ignoring the bad debts. If you don’t get sued, the bad debt will drop off your credit after 7 years. But watch your report. Debts get sold and traded all the time. Sometimes a new debt buyer will post your bad old debt with a new date. Doing that may fool the credit bureau. Don’t let it fool you. Dispute the listing if a debt buyer gives a new due date to an old debt. Debt buyers do that to keep the pressure on you to pay up.
  • Settle your debts. Most creditors will eagerly settle an old unpaid debt. You can expect discounts averaging around 50% of what you owe. Sometimes you can do even better. However, creditors don’t want to give you discounts with a payment plan. If they agree to a discount, they usually want all the money up front. They are not interested in payments because you already broke your previous payment agreement.
  • Write checks and pay what you owe in full. This alternative is easy to say, but hard to do. I have to believe that you already would have paid off your debts if you had the money to do it. Even if you did that, it won’t fix bad credit. That’s because your bad credit has already become a fact. The fact that you had debts that were not paid on time will follow you. Probably, for another 7 years after you finally paid them off.
  • You can start to fix bad credit by filing bankruptcy. That’s because you can’t fix bad credit until you fix bad debts. Filing bankruptcy fix bad creditdoes not instantly fix bad credit. But the debts you may discharge in bankruptcy will get resolved. That’s because they are no longer legally enforceable against you. It tells the rest of the world that you no longer have to pay those debts.