If your credit
score took a beating because your house went into foreclosure
or you filed for bankruptcy, do not
despair. The good news is that a bad credit score is not
permanent. It can be fixed. It can take 7-10 years for
improvement, but it might be faster if you are proactive.
If you foresee a credit
disaster, map out a plan. If default
is looming, then pick the account with the highest monthly balance
to fall behind. This will free up more money to pay your other
debts. It is better to default on one big account rather than
several smaller ones.
If you need to choose which
debt to stop paying, pick the credit cards because they are
unsecured and a creditor can’t
repossess anything. Defaulting on a car loan or mortgage will hurt
your credit score more than a credit card. Plus, the creditor can
take your automobile or house.
You can start improving your
credit score by getting a secured credit card. Generally, these are
the only credit cards available to a consumer after their credit
has taken a beating.
To read more, click here.