2011 is about to be over.  As 2012 comes in, everyone is hopeful that the New Year will bring prosperity for all.  If you’re still stuck in bad credit, you might be feeling a bit frustrated about starting the year with unpaid debts in your name.  However, things do not need to be as bad as they seem. 

In this article, we present tips to help you get out of bad credit within the first quarter of 2012.

Know what you’re up against.  Order your personal credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion).  If you have not yet received your free report in 2011, you should exercise your right and request for your free annual credit report at www.annualcreditreport.com.

Checking your report will help you see the real situation.  Perhaps your debt problem is not as worse as you thought it was after all.  Or maybe you’ve been shrugging off the problem and upon seeing your report you might realize that you really need to take action immediately before things become worst.  Whatever the situation is, this first step is important so you can decide what specific steps you should do to get yourself out of bad credit.

Clean up errors from your file. In case you discover errors or outdated information in your credit report, you should send a dispute letter to the bureau that issued your report. Fixing errors in your credit history can instantly improve your credit score.  All consumers are entitled to dispute credit report errors as stated in the FCRA (Fair Credit Reporting Act) and improving your score, even by just a few points, is also a great way to boost your spirits.

Create a repayment plan.  Creating a repayment plan can be a daunting task and if you’re not sure about where to start, calculate your total debt and compare it with your monthly income.  If you’ve run up a pile of debt, you might need to work on repayment for a few months to a year, depending on your financial capability.

Do you think it will be possible to target a 3-month or a 6-month repayment period?  If you need a much longer time, don’t worry.  As long as you begin working on repayment today, you will be able to cut down your debts within the next three or six months.  So do the math and see what percentage of your income you can dedicate to debt repayment, while the rest goes to personal expenses and monthly utilities.

Prioritize your debts.  Which of your accounts have the highest interest rate?  It will be great if you can make a full payment to this account to stop your debt from further accumulating.  You can also consolidate your debts by acquiring a debt consolidation loan.  This way, you only need to deal with one creditor and pay a single interest rate.  For credit card debt, you may consider transferring your balances to a credit card with zero balance transfer rate.

Avoid new charges.  Debt repayment should be your main focus until you’re able to accomplish this goal. As you work on paying off your debts from the previous year, do your best to avoid incurring new charges.

By Allison May

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on Guaranteed Approval credit cards, Unsecured credit cards for Bad Credit and other credit-related issues. The main objective here is to help people build good credit. Add Allison on

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