The Credit Challenge

Credit repair is something that you hear about all the time.  First of all, there are credit repair companies.  Then there are credit repair kits.  There are many things out on the market that supposedly make the process of credit repair fast and easy.

In my time working with clients over time, there are have been many excuses why they haven’t taken any steps to repair their credit, however, there are 5 key things that have been consistent over the last 7 years.

1. Lack Of Knowledge - Because we’ve been served so many different ways to achieve good credit, it is obvious that people seem more overwhelmed because of not having the right knowledge about credit or how to improve it.  The first step is understanding how credit really works.  There are 5 key factors which determine your credit score, but sadly, even some professionals don’t really know this precise formula.
2. Different Opinions and Perspectives- Many people that I’ve spoken to have different perspectives on how and what to do to have excellent credit.  This is mainly because the people that we go to learn about credit don’t really know themselves.  So, if we get false information about credit, guess what?  We will pass on the same inaccurate information to others.  Every time, the right info gets diluted and becomes completely false.
3. Not Establishing A Plan To Improve Your Credit- You’ve probably heard the saying “If you fail to plan, you plan to fail.”  Well, that also applies to increasing your credit score and working on your credit repair.  There are a number of steps that it takes to boost your credit score, but often, people just shoot from the hip, or take a blind shot into the wind, without properly planning the steps necessary to increase your score.  It is very important to establish a plan because then you know that you are making progress, and you will also provide yourself with accountability to stick to the goal!
4. Can Be Overwhelming- At first, credit repair may look overwhelming.  After all, the task of going from a 537 score to a 700 seems like a huge undertaking.  The simplest way to achieve this and not feel suffocated is to break down your plan into smaller, manageable tasks.  Instead of paying down 5 credit cards so that they reach a 30% balance compared to the credit limit, focus on paying down the smallest one.  Once you do that, move on to the next one, and so forth.  This can give you motivation to continue and also make you feel like you are moving closer to the goal.
5. Lack Of Money or Time To Improve Credit- Let’s face it.  In order to repair your credit, you will either need time or money, or even both.  The more money you have available to do it, the less of your time it would take, and vice versa.  Again, making small adjustments can get you well on your way to credit repair.  First, is there anything that you can cut off from your spending that you can redirect to your debt?  Also, do you have an hour or two that you can schedule with yourself to review your credit and send out any letters to the creditors?  These are small things that you can begin doing to make a difference in your credit score.

As you can see, if you know what some of the road blocks are from improving your credit, then you can plan accordingly and make adjustments when necessary.

What are some of the things that are hindering you from improving your credit?  Feel free to leave comments or questions here and I will be sure to answer them.