Everything in life has a professional service attached to it.  Whether you want someone to mow your lawn, watch your kids, do your laundry, etc.  If you want someone to do it, you’ll be able to find someone to complete the task.  Now, are services for those that are lazy?  Not at all.  In fact, a majority of the time, it’s for those that don’t have the time or they are simply under-educated.

If you’re the type that doesn’t know much about credit repair, that’s fine because a lot of people out there don’t fall into this trap that often.  It’s as if you’re having a baby, how often do you have one?  Once you have one, the second time may be a little easier.  I’m going to show you a few steps that you can take in order to get rid of your debt 100%.

Take action now and make NO excuses

You’re reading this post and you’re mostly likely in debt if you searched for this.  One of the number one reasons that many people don’t get out of debt is because they don’t try.  They feel they have no option but to file for bankruptcy.  Don’t be one of those people.  Debt isn’t hard to get out of!

Let’s analyze your debt first

The first thing I want you to do is tally up all of your debts not including your mortgage.  Include everything from credit cards to student loans and add it all up.  The next thing I want you to do is tally up how much you make each month or year after taxes, whatever is easier for you.  This is what it should look like.

• GOOD DEBT –   $40,000/year after taxes // $15,000 total in debt
• BAD DEBT — $22,000/year after taxes // $55,000 total in debt

As you can see, if you have more debt than you make in a year, you may either want to find other ways to make money or you may have to take the bankruptcy route.  If you’re in the good debt category, there’s NO reason you shouldn’t get rid of your debt.

Write down each debt on a spreadsheet

Find out what kind of debt that you have.  What I want you to do now when it comes to your debt is that you’re going to list the minimum payment each month, the amount you owe total and how much you bring in each month. 

Here’s an example on what it should look like:

• Credit Card A:  $25 min. month // $5,000 total
• Student Loan:  $100 min. month // $14,000 total
• Car Loan:  $225/month // $14,000 total
• Take home:  $3,200 / month

This will give you a better idea on what can go where and how you can pay it off.  Now, this situation is fairly small where you’ll owe $350.  After all your expenses and that, you should have about $1,500 left over each month to pay off bills.  This should be put toward your debt.  Hopefully, you can see where I’m going with this.  Always apply more than the minimum and it can be paid off quicker.

If money is tight, still pay the minimums

Money can be tight each month and I know that but if that’s the case, there’s a rule among all debt advisers that you should follow.  Always pay the minimum no matter what you do.  By doing this, you’ll be able to help your credit score.  The best way to fight this debt is by paying the highest interest rate loan first and apply as much as possible while paying the minimums on everything else.

Remember, this is just the basics of credit repair.  There’s so much you can do when it comes to fixing your credit.   Read around our blog, do more research online and you shouldn’t have to hire that credit repair firm.

Ah, the good old credit card companies, what they do to get a few extra dollars in their pockets sometimes.  If you haven’t heard of the term “rate jacking” yet, let me inform you on how it works. 

Rate jacking is a term used when a credit card company raises your interest rate.  For example, if you have a interest rate of 14% right now, the credit card company can at any time, turn around and make your rate 19%.  When it come to interest rates in this business, every point counts, especially if you are thousands of dollars in debt.

So, what do you do when the credit card company jacks up your rates?

Call up and complain:  If you’re  a long term customer, call up the customer service department and explain your situation.  Tell them that you’re paying your bills off and you’re trying your best to get all of their money back.  Go on to say that with your interest rates being higher, it’s going to be extremely hard to pay it back quicker because of the rates.  Sometimes they will budge and lower it but if they don’t, it’s time to move on.

Find a new credit card:  Frankly, I don’t like doing business with cards that higher my interest rates, I don’t like that kind of behavior at all.  Instead, find a new card that will offer an attractive interest rate on balance transfers.  Transfer your new card to a 0% for 12 months, etc and pay it off as quick as you can.  If you have good enough credit, you shouldn’t have a hard time finding one of these cards.

Just pay the thing off:  If your balance is only a few hundred dollars, I would pay it off as soon as you can and move on with life.  If the credit card companies have none of your money, they can’t charge interest on it, it’s that simple!  If you’re thousands of dollars in debt, you will probably want to use steps 1 and 2.

With the economy like it is today, you’ll find that rate jacking is going to be more common than you think.  The credit card companies have to make money somewhere and it’s most likely going to be with fees and interest rates.  Take a stand, pay off your card or move elsewhere.

When it comes down to your credit report, each item is weighed differently when it comes to affecting your score.  For example, a late payment on $25 isn’t going to be as rough as filing for bankruptcy.  If you’re curious on what affects your credit score the most when it comes to negativity and your reports, here’s how it stands in order.

Bankruptcy:  Obviously, this is the grand daddy of them all.  When you file bankruptcy, you’re going to hurt your score for at least 7 years.  This should always be your last resort.

Foreclosure:  Foreclosing on your home is up there with bankruptcy but it isn’t as bad.  If you can’t pay for your home, how are creditors going to trust you when it comes to other bills?

Repossession:  Just like a mortgage, if you can’t pay for a car, boat, RV or whatever it may be, creditors are going to view this like a home but not as extreme.

Defaulting on a Loan:  When you can pay a loan, this shows that you either don’t want to pay it or you don’t have the money.  I hope you don’t have the money.  If you can’t pay a loan, expect a hard hit on your credit score.

Collections:  If a lender is out there to get money from you, this is going to show up on your credit report.  You better either pay it off or its going to affect your score for a while.

Past due payments:  If you forget to pay a bill or you’re constantly late on your payments, this is going to bring your score down.  If it happens once or twice by mistake, it will usually not show up depending on the creditor.

Credit Inquiries:  This is a minor one but it can bring your score down just a tad.  If you have companies constantly looking at your credit report, it shows that you’re looking to get new credit.  The more credit you have available, the more you’re at risk.

When it comes to importance of what affects your score and what doesn’t, this list should give you a better understand on whats going to lower your score the most.  Keep in mind that all of them are bad and you want to avoid them but if you have no choice, you will most likely see a lower credit score.

In today’s rough economy, you’re going to find that you’re going to need the best credit score possible in order to get the best rates on the board.  If you have any sort of ding or bad mark on your credit report, you probably won’t realize how bad this can hurt you.  Even the littlest late payment can set you back when it comes to your score.

When it comes to removing your bad credit fast, there are some things that you can do to remove it within a few weeks.  No, it’s not going to happen overnight but if you work hard enough and you have reason to remove the marks, you should be able to remove any bad marks.

Can you remove the mark?  The first thing that you want to ask yourself is if you can even remove the bad credit mark.  If you have already paid it off or there was an error in their part, you’re on the right page.  If that debt is still sitting there and you’re not doing anything about it, you can count on keeping that mark on there because why should they remove it?

Learn how to dispute - There are a few ways on how you can dispute your bad credit when you have reason to do so.  A while back, I wrote a post on how you can succuessfully dispute your bad credit in detail.  In a nutshell, you’ll want to learn how to write a dispute letter and you’ll want to know who to call when it comes to getting that mark off your report.

Write a dispute letter - If you don’t right a dispute credit letter the right way, you’ll find that you may have no luck when it comes down to getting your marks fixed.  You can’t just send a letter asking for your bad credit marks to be repaired.  Instead, you have to have evidence and you have to have reason on why it should be removed.  View websites like Debt-N-Credit-Letters.com when it comes down to sampling letters.

In this economy, people want things removed at a snap of the finger.  I’m sorry to say but it just can’t happen that way.  Instead, you want to make sure you do things the right so that you can remove anything bad from your report.  By doing this, you should be able to see your score rise once again.

If you’re considering filing bankruptcy in today’s climate, you’re not alone.  Yes, bankruptcy filing is going to be harder than it was a few years back but it doesn’t mean that you can’t do it.  If you’re considering today but you don’t know if you shouldn’t take the right steps, I’m going to show you what you should look up to determine if you should file or not.

Can you make all of your minimum payments?

If you’ve already answered yes to this question, don’t rely on bankruptcy because it’s going to do more harm than good.  If you can afford to make those minimum payments, I would recommend that you meet with an advisor on debt or do the necessary homework on how to lower your credit card bills.

Never cash out your retirement accounts

If you have a 401k, don’t think about cashing it out.  This is going to be protected when it comes to your bankruptcy.  If you can keep that money in your account, I would recommend you do everything in your own power to keep it there.  This money is going to be safe.

Know who you have to pay off

Before you go out and file, make a list of everyone that you owe money to.  Everything from your credit cards to your home mortgage.  If there’s a negative number amount, they are going to be paid off.  Once again, see if you’re able to pay them each and every month.  If your minimum payments are higher than what you’re bringing in, you may want to file.

Stand still if you file

If you do decide to file, stop using your credit cards, don’t play around with money.  You’ll want to do as little spending as possible while you go through the process.  If you try to hide money or transfer it somewhere, etc, you can find yourself in legal troubles.  It’s always best to be honest.  Is money really worth more fines or jail time to you?

Don’t pay family debt off

A lot of people actually do this when it comes time to file.  They will pay off friends and family before they do the creditors.  If the court knows of this, they can legally turn and sue your friends and family for that money back.  I would highly recommend you pay off friends and family after your legal battle.

Bankruptcy is a long and tiresome process.  If you can avoid it, by all means, do it. It’s going to be on your report for the next 7 years.  You won’t get a good rate on mortgage, loans and many people may shy away from you.  Know some of these tips because they will come in handy if you do decide to file.