Emotionally, bad credit is difficult to handle. Many customers find that they react to their credit report emotionally, often falling into a deep depression and even feelings of helplessness when their credit report reflects an imperfect credit history. There is no doubt that there is much pressure surrounding credit reports. Today, credit reports are used to determine whether you will get loans, leases, insurance, and even some jobs and homes. Having a bad credit report can make you feel embarrassed and upset and having poor credit can affect your finances in a very real way. Being turned down for loans can create problems if you need to buy a car or arrange for a move. Luckily, there are ways to deal with bad credit and with the sometimes conflicting emotions that bad credit can stir up.
Dealing With Your Emotions
Most financial experts agree that if you have a poor credit rating, you need to acknowledge that there is a problem. Often, the first instinct of many customers is to get more loans, blame someone else for their credit problems, or simply ignore the situation. All these things will not improve your credit report, but they can make your circumstances worse. It is only by looking at your credit situation realistically and thoroughly that you can learn to cope with your debt and your finances in order to correct the problem.
Trying to deny the problem can make your situation worse. Many customers who try to deny that they have a problem with their credit reports continue to try to spend as they always have, especially since making addition purchases makes them feel in financial control. However, denial and spending are the worst things you can do if your credit is bad, as you can easily worsen the issue this way.
Once you have faced the problem you need to forgive yourself for the mistakes you have made financially. Many people get into credit report problems because they take on too much debt. If this has happened to you, this does not make you a bad person. Rather than blaming yourself and focusing on your past mistakes, you need to be able to move on. Focusing on the past and blaming yourself will not help you get your credit report back into shape.
Once you have dealt with the initial shock of your credit report emotionally, and have forgiven yourself, you need to change focus. Rather than focusing on how you feel about your credit difficulties, you need to focus on the why and how. That is, you need to analyze why your credit rating has slipped as far as it has and you need to take the necessary steps to correct the problem. Focusing on analysis and action will take your mind off the emotional impact of bad credit and will allow you to actually correct your credit report problems.
When analyzing the reasons behind your low FICO score, examine whether you overspend or whether you are having problems staying organized. If you simply forget to pay your bills on time, you can get your bills automatically deducted from your accounts or you can get a planner or even email reminder system that will help you keep track of your money and bills.
If you have a problem with spending, you may benefit from free organizations such as Debtors Anonymous or over spenders Anonymous. These groups can help you pinpoint the causes for your overspending and can help you get your debt under control. Many customers also find it useful to cut up their credit cards to prevent impulsive spending and to create budgets so that casual spending is not allowed. Learning to control spending is possible, even if you have a hard time saying no to items you see in shops. Many customers also find that speaking to trusted friends and family about their credit and spending problems helps them to get over a bad credit report emotionally.