How to begin repairing bad credit

Diamond Nexus Labs understands that hard working people can still find themselves with poor credit.  As difficult as this can be to face, it is important to take steps immediately to repair your credit so you can get back on track.  Here are a few steps to consider, though you should always consult a CPA or lawyer before implementing a plan. 

Create and stick to a budget: The easiest but most important step you can take is to create a budget and stick to it.  Make sure you include all of your debts so they will not continue to hurt your score.  Be honest with yourself on what you can do and do not create a budget you will not be able to stick to.

Contact your creditors: Although it can be a difficult step, you have to get in contact with your creditors as soon as possible.  Let them know why your payments are late and what your plan is to repay them.  Often creditors will be willing to work with you if you present them a plan they believe you will be able to adhere to.


Consider credit counseling: Sometimes a little help can go a long way.  Credit counselors can provide the knowledge and support to help you repair your credit.  Just be careful when selecting a counselor; just because they are non-profit does not mean they are legitimate.  Do your homework and try to find a place where you can meet someone one-on-one.


Debt consolidation: Sometimes it may help to use a second mortgage or home equity line of credit to help you through a tough patch.  Make sure you will be able to handle the addition of another debt and are not just prolonging the inevitable.


Bankruptcy: Sometimes it simply becomes impossible to repay all of your debts. If that becomes the case, you may want to consider bankruptcy.  There are two types: Chapter 13 and Chapter 7. Chapter 13 will require you to pay back a part of your debt and will put you on a payment plan for three to five years, which will be supervised by the courts.  Chapter 7 will erase all of your debts but is only allowed for extreme cases.
Don’t be harassed: Being in debt and facing bad credit can be difficult enough; do not allow debt collectors to further harass you.  Collectors may not call you before 8am, after 9pm or while you are at work.  Furthermore, debt collectors must honor all written requests to stop further contact.  

Being in debt and facing bad credit is tough, but by taking some steps today, there is light at the end of the tunnel!