Dealing With Bad Credit When You Have A Family

You have at some point borrowed money somewhere for whatever reason. If you’re reading this, chances are that you or a loved one has experienced challenges paying back borrowed money. One is said to have bad credit if, for whichever reason, they’re unable to pay their debtors and lenders back on time for the money borrowed, and this is often reflected in the individual’s credit score. In most cases, a person has bad credit if their credit score is below 580.

This is the score in which getting a loan or a mortgage from a lending institution becomes pretty hard and if you manage to secure one, it often attracts a high-interest rate and the conditions are tough. Having bad credit can put a huge toll on your financial life, especially if you have dependents under your care. But needless to mention, bad credit is not a death sentence, neither is it doomsday as far as your financial life as a family man/woman is concerned. Here are some hacks for dealing with bad credit when you have a family.

Seek ‘No-Credit Check’ Deals

Having a bad credit history comes with several drawbacks. In some countries, for instance, securing employment from a public institution can be extremely hard with a poor credit history. What’s more, many companies and service providers also consider your credit score when gauging your eligibility, including insurers, landlords, recruitment agencies, and cell phone contract providers. Fortunately, for the latter, you can click here to learn how to secure a bad credit contract phone deal. In most of the other cases, no-credit-check providers are the best alternative for people with bad credit. Securing a no-credit-check deal also means that the company or service provider won’t leave a footprint on your credit report, which could affect your borrowing power even further.

Communicate

Paying back debts has never been a bed of roses, especially when you’ve defaulted severally, the credit collectors are on your neck, and won’t let you breathe. However, communication can make things easier between you and your family as well as you and the lender. Be open and honest with your family about the situation and make them understand that you want to clear your debts. This could mean that they will have to forego some things they are used to and also do away with luxuries until you are done clearing your debts. This will make it easier for you to handle the situation. Assure them that they will resume their normal lifestyle once it’s settled. Communicating with the creditors and explaining your situation can also create avenues for better payment plan/terms; which brings us to the next important point.

Seek a More Suitable Repayment Plan

When it gets to that critical point, talk to your creditors, explain your situation, and ask for a manageable repayment plan. Creditors prefer slow payment to none at all. You can as well ask for a penalty just to neutralize the situation and when you agree on a certain payment plan, show your willingness to pay by being committed to the agreed plan. At this point, you will need to be disciplined financially to avoid unnecessary confrontations.

Prepay Bills

With or without bad credit, bills must be paid. You should, therefore, sort your bills on time to avoid drowning in more debt. If you are behind on any bill or any other balances, clear them bit by bit until you are done. At this stage, you should avoid spending more than you earn and when the going gets tough, avoid taking more credit to pay off another debt. You can also consider asking your family to help you minimize bills where they can, for instance, by reducing electricity consumption and so on.

Get a Side Hustle

No one likes to be bothered and nagged with phone calls from creditors for not clearing their debt. Sometimes you may want to consider finding a side hustle that will help you clear the debt. You will as well need to involve your family by asking them to use their talent or skills to help you clear the debt. Nearly everyone has a skill that can pay, whether it’s babysitting, laundry, or virtual assistant. This will just speed up the process and with no time, you might as well manage to clear your debts off.

Sell What You Don’t Use

If you look keenly around your house, you’ll probably find something you can turn into money. Ask your family to help you identify items you no longer use, those you no longer need, or those you can live without. You can sell such items out and use the little you get to save the situation. You will be surprised at how much you can gather from unused items that have been lying around in the house without your knowledge.

Finally, you can also consider filing for bankruptcy if the situation gets overly unmanageable. Also, you may need to drop expensive habits and stick to a budget to avoid overspending. With the few tips above in mind, it becomes easier to deal with bad credit while still playing your role as your family’s provider without much stress.