subject: It Takes More Than the Monthly Minimum Payment [print this page] It Takes More Than the Monthly Minimum Payment
You don't know for sure how it happened, but somehow you have managed to max out all your credit cards, and you are not making much headway in paying them off. You can no longer use the cards and the issuers are after you to pay down your balances. You are deep in debt and unsure what to do next. Does this sound familiar?
If you have damaged your credit to the point that you can no longer acquire new credit, you have a problem on your hands. However, there are ways to fix this problem and rebuild your credit report and credit score. One of the quickest and easiest ways to begin this process is to acquire one of the many credit cards to rebuild credit. Designed for the person who can't get credit anywhere else, this type of credit card will allow you to have a limited amount of credit available to you while you work to improve your score.
The first thing you need to do is show the people to whom you are in debt that you are responsible and do intend to pay what you owe. This means that you need to make regular monthly payments against your debt. At the beginning it might be tight, depending on just how much you owe. Just remember that every month that you are carrying those credit card balances, you are being charged interest. Further, in a situation like this where your credit has been damaged, the odds are fairly high that the interest rates you are paying on your balances are higher than normal.
If you have been making payments on an irregular basis, and only paying the minimum monthly amount, this is the first thing that you need to change if you want to repair your credit report. First, you need to make a payment every month. Second, even if it's just a small amount over the minimum, be sure to pay more than the minimum amount owed. For every dollar you pay over the minimum, you will save valuable and much needed cash in avoided interest payments. Further, paying over the minimum shows your creditors that you are serious about becoming a responsible user of credit.
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