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The No-Nonsense Guide to Repairing Your Credit ASAP

repairing your credit asapExperts say, that if you don’t want to destroy your credit worthiness, you need to keep your debt-to-income ratio around 40% or less. In plain people-speak, this means that your debt payments shouldn’t take up more than 40ish percent of your income. That’s fine if you’ve never had to take out a mountain of student loans or found yourself facing a medical or other type of emergency, but not everybody is that lucky. For most of us, facing a mountain of debt is something that we will do at least once in our lifetimes.

The thing to remember is that even the biggest mountain in the world is climbable if you take it one step at a time. And at the risk of using a terrible and cliche’d metaphor, the same is true for the mountain of debt that is currently intimidating you.

Yes, you could decide to just pay the minimums due so that your payments don’t eat up more than 40% of your income. If you do that, though, you’ll wind up paying way more than you actually owe. Who wants that? Nobody.

Here are the steps you need to take if you really want to take on that mountain of debt and get rid of it once and for all.

#1. Consolidate Your Bills

If you’ve somehow still got a good credit score, one of the best things you can do is to take out a consolidation loan. This is one loan that will pay off all of your smaller bills at once so that you only have the single bill payment to worry about each month. It can also be a fantastic way to reduce the amount of interest you will pay over the lifetime of those debts.

If you don’t have a good credit score or you’ve got so many bills your head is swimming, you can work with a debt consolidation company. There are lots of non-profit agencies out there that will help you consolidate your debts into a single and affordable payment every month. This type of debt consolidation is usually used as a last resort but it is much better for you than bankruptcy.

PRO TIP: If you do get a consolidation loan, as soon as you can, transfer a chunk of that balance over to a 0% APR account. This reduces your interest debt even further and will help you pay off your debt all the more quickly. Just make sure you don’t transfer more than you can pay off in that 0% promotional period or you’re facing a bunch of extra interest that will really set back your debt battle.

#2.  Scrimp and Save As Much as Possible

The less money you need for your every day life, the more of your money you can throw at your debt. If this means practicing some extreme couponning, that’s okay. It’s not forever. There are lots of extreme savings practices that you can adopt for yourself.

#3. Rebuild Your Credit

Having good credit doesn’t just mean paying off your current debt; it means proving that you can responsibly manage future debt. There are lots of ways to rebuild your credit, like taking out a secured credit card. Another way is to buy a car. Even if traditional financing frowns on your credit history, there are companies out there that will work with the credit-sensitive and help you finance your car at a rate you can afford. Another good option is to take out a store credit card and then just pay it off every time you use it.

Finally, create a reasonable budget and stick to it. This is a discipline that will take time to develop but don’t be afraid of checking your bank account and tracking your spending. You’ll find that when you do, choosing not to buy or accrue more debt is easier than you think!



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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