Manage bad credit by setting goals, paying bills - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Manage bad credit by setting goals, paying bills

Print
Font Size:
Default font size
Larger font size

Related Stories

Posted: Thursday, May 10, 2012 2:45 pm

Dear Debt Adviser: I have bad credit with my bank, and I’m making payments on what I owe, but I still have no credit. What credit I have is bad because I am so young, and I have hardly anything in my name. What’s the best way for me to establish credit? —Blair

Dear Blair: You don’t have bad credit because you are so young and have hardly anything in your name. You have bad credit because you didn’t pay your bills as promised.

I don’t point this out to be mean. But if you don’t understand what’s wrong, chances are you’ll have a very hard time fixing it. And fix it you can, with a few simple steps. What you need are some goals, a spending plan, some savings and, finally, to pay your bills as agreed every month, not just sometimes. Here’s how to get started:

First comes the goal setting. Just imagine your world in two, five and 10 years. Once you have a picture of how great it will be, you also have an incentive to save and build your credit.

Next, create a spending plan. Start by adding up all your sources of income, and then write down all your expenses. If you are new to developing a plan, a good exercise is to take a month and write down every expense, whether it’s a debit card transaction, check, automatic payment or cash. Then, separate your expenses into categories based on your spending for the month. You might be surprised to learn what you are spending your money on and how much you are spending. If your expenses are more than your income, cut back so that your income covers all your expenses and allows for savings.

Once you have a spending plan in place and you are building savings for your goals and an emergency fund, you can move forward with seeking new credit to help establish a positive credit history. Two credit products can help credit newbies like you establish credit: a passbook loan and a secured credit card.

Passbook loans are small loans secured by a deposit made by you into an account at the bank that issues the loan. You make regular monthly payments for a specified time (one to two years, typically) as you would with other installment loans such as a car loan. If you decide to apply for a passbook loan, be sure the bank reports the loan to all three credit bureaus because if the loan is not reported, it won’t help with building your credit. The required monthly payment on the loan must be part of your spending plan, so you know you will have no trouble meeting the payment.

A secured credit card works in much the same way in that you deposit your own money with the issuing bank and may use the card to make purchases up to the amount you have deposited. You must make at least the minimum payment due each month, but I would recommend that you charge only what you can repay in full each month.

• Steve Bucci is the author of “Credit Management Kit for Dummies.” E-mail him at debtadviser@bankrate.com.

More about

More about

More about

  • Discuss

Kuss looking for European experience to help sharpen skills

All roads continue to lead up for mountain-biker-turned-road-revelation Sepp Kuss. The 21-year-old newcomer has already established himself as…

Published: June 28, 2016 - 12:03 pm @ http://www.cyclingnews.com/news/kuss-looking-for-e…

Indoor farming gives former New Jersey arena new lease on life

NEWARK, N.J. In an old warehouse in Newark, New Jersey, that once housed the state's biggest indoor paint ball arena, leafy green plants such …

Published: June 28, 2016 - 12:01 pm @ http://www.reuters.com/article/us-new-jersey-verti…

Alina

New York, NY Drama Project We Love Alina is the first fiction film by celebrated indie exhibitor, distributor producer and father of the Midni…

Published: June 28, 2016 - 11:49 am @ https://www.kickstarter.com/projects/836369023/alina

New & Notable in AZ {spin class}

Last week I tried a fun, exciting and super-hard spin class with Diane at the DC Ranch Village. Three days later, my legs still hurt going up …

Published: June 28, 2016 - 11:49 am @ http://scottsdale.citymomsblog.com/2016/06/28/new-…

Where to find Fourth of July fireworks in Phoenix area

It’s that time of year again when we grab our families, pack up a few items and sit in darkened parking lots and fields to celebrate the Fourt…

Published: June 28, 2016 - 11:33 am @ http://ktar.com/story/74164/red-white-and-boom-whe…

Supreme Court abortion ruling could have significant impact on Arizona

A new ruling Monday by the U.S. Supreme Court likely voids one Arizona abortion restriction and calls others into question. In a 5-3 decision,…

Published: June 28, 2016 - 11:01 am @ http://azcapitoltimes.com/news/2016/06/27/supreme-…

Former Phoenix officer pleads not guilty to impeding investigation

PHOENIX - A Phoenix police officer accused of impeding an investigation into drug activity at a strip club has plead not guilty. Richard Denny…

Published: June 28, 2016 - 11:02 am @ http://www.abc15.com/news/region-phoenix-metro/cen…

Graham Nash Talks New Rock-Doc Series, 'Woodstock' Drama

Graham Nash has plenty of experience with the vagaries of rock & roll documentaries. Take Woodstock, for one: "There were three days of re…

Published: June 28, 2016 - 10:48 am @ http://www.rollingstone.com/music/news/graham-nash…

Buddy Ryan, Architect Of '85 Bears Defense, Dies At 82

(AP) Buddy Ryan, the pugnacious coach who masterminded two fierce defenses that won Super Bowl titles and whose twin sons have been successful…

Published: June 28, 2016 - 10:18 am @ http://chicago.cbslocal.com/2016/06/28/report-budd…

Arizona Theatre Company Needs $2 Million to Avoid Closing

Lynn Trimble A A Arizona Theatre Company needs to raise $2 million by Friday, July 1, to continue operations, the company announced on Monday,…

Published: June 28, 2016 - 10:20 am @ http://www.phoenixnewtimes.com/arts/arizona-theatr…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…