How to Make a Comprehensive Debt Management Plan
Since it has become very challenging to buy anything without a credit card, one point to helping establish a credit score, and eventually a credit rating when you are having difficulty acquiring a credit card is to obtain a pre-paid card. Many creditors offer a pre-paid visa or Master Card, which for all purposes, looks and works just like credit cards. The main exception is, rather buying things strictly on credit, you deposit into a bank account that secures the amount of the card limit. Often there is a deposit fee required for opening a pre-paid credit account, and your limit is based upon the size of the deposit that has been pre-paid. The benefits of prepaid cards include that they really can help with credit repair; and, if in fact, your credit is really in bad shape, they may be your only option for fixing it.
The best resolution to credit problems is to apply some debt control skills and pay your bills as on-time as likely while evading spending money on items you do not need. Making educated decisions about spending and analyzing the implications of the choices from all viewpoints will help you make better overall spending decisions. Sure, bad credit is a tough hurdle to get over once you have acquired bad spending habits, but it, like bad spending habits, can ultimately be defeated. If you need help forming a working plan that you can stick with on a long term basis, consider credit counseling as an option.
Taking charge of your credit reports can help you improve your life. There is no reason to let bad credit destroy your plans, but to repair your credit, it is very necessary to know what your credit report standing is. After all, if you know what you owe, you can take the required steps to repay it. Also, it is very significant to keep in mind that although the three credit bureaus (Equifax, Trans Union, and Expedient) may seem all-knowing and all-powerful, the data they have on you may include errors. It has been known to occur to others.
Get a copy of your report from each of the bureaus, but do not do what everyone says and just ask for a loan to get a free report. Every time you apply for a loan, there is a mark made upon your credit rating and points gain. Instead, just pay the fees added, it will save you money, in the long run, a lot more than the charges to get the reports.
As you form your credit repair plan be sure to consider long and short term actions that you can take. For example, prepaid credit cards will help in the short-term as they allow you a way to buying that can only be made with a credit card. But, they offer little in the line of long term credit repair. While they are used as a credit card, the addition that they have toward establishing or fixing credit is so small, that it is not distinct on the credit reports.
Other cards will insist they can help restore your creditworthiness by giving you a larger balance card. Of course, they want a fee of $200-300 upfront. Be advised, some of these companies are scams and should be avoided. When in doubt as to whether or not an agency is offering you a reasonable offer, check with the Better Business Bureaus to see if they have any complaints on file.