There’s tons of advice out there on improving your credit score and setting yourself up for a sweet financial retirement. Unfortunately, most people out there don’t have the extra income required to take advantage of that advice. When your credit is trashed and you are scraping by between paychecks, your question is essentially what you have to do to survive despite your bad credit. The fact is that bad credit isn’t the end of the world. Here is what you should know about your credit, and why you can live with bad credit after all.
It’s a Blessing in Disguise
Credit scores rise up or down based on your history and other factors. If it starts looking like you’re getting in over your head, your credit rating will drop. It will become more difficult to borrow money, but that’s actually not a bad thing. In fact, it could be argued that your low rating is a blessing in disguise. Unable to get more loans, you may be forced to focus your attention on paying things off and cleaning up your financial act. In the long run, that’s much better than being able to dig yourself deeper into debt and more trouble.
Cash and Carry is Smart
It’s true that you may not have the credit to go out and buy a big screen TV at the drop of a hat, but you can still save up for those little extras in life. The biggest difference is that your little extras will be paid for. There is an incredible feeling that comes with knowing your goodies are fully owned by you. The next time you feel envious of your brother with his high credit lines, remember that he’s probably paying a small fortune in interest every month.
Separate the Credit Score from Your Personal Worth
A bad credit score is often the start of a vicious cycle. You feel guilty about the low score, it makes you feel worthless, and you start sinking into depression. Depression clouds the mind and makes it harder to arrive at smart decisions. You might even resort to shopping for therapy, and that will make things even harder. It’s vital that you separate the credit score from your own personal worth. They are not intertwined. Keeping a clear head during this time and avoiding the pitfalls of depression will help you make smarter financial decisions.
Slow and Steady Wins the Race
Your credit didn’t sink into oblivion overnight, and it will take time to bring it back from the brink. Be patient, focus on making smart financial choices, and make sure you live within your means. You might want to consider investing in PPI credit insurance, so your payments will be covered even if you lose your job and don’t have the money to make them. Over time, your credit will start to improve. In the meantime, you will continue making money, loving your family, and enjoying your life.
When it comes right down to it, bad credit is not going to destroy your life. While you should slowly work on improving it by making better choices, you don’t have to stress out and beat yourself up over it. Focus on paying cash for the extras you want and eliminating expenses where you can. With time, your credit score will creep up again, but life will continue as normal in the meantime.
This post is a guest post written for the readers of Coupon Saving Family by Clifford Watts who is a freelance blogger that writes on behalf of PPI Claims about using payment protection insurance as a way to maintain and improve your credit score.