How to move forward whilst you have debt and bad credit rating

Money, it doesn’t make you happy they say. It does however make the world go around unfortunately!

So, when you hit a financial hard spot what do you do? Many of us reach for some form of credit one way or another. I know it’s not ideal but we do.

I’m not going to lie, we have debt. Not particularly proud of it, however it is what it is. I can’t sugar coat it in anyway. It is like a little black cloud that is hovering over us.

Frustratingly we got out of debt then when I started working from home we used credit a few times, got lazy and it grew again. I am still annoyed that we got ourselves into this position again after getting ourselves out of it. However that adds a bit more fuel to my desire to clear it once and for all.

We are back onto the battle though of clearing all our debt and then tackling the biggest one of them all, the mortgage.

How exactly do you move forward whilst you have debt or a bad credit rating hanging over your head?

Firstly, you need to be honest with yourself. It is no good tackling debt that you “think” is a certain amount. Grab yourself a pen & paper or use a simple spreadsheet to list everything you owe.

Scary to some I know however, this is a huge first step to accomplish. To deal with the problem, you have to admit the problem.

Then comes the challenges, which I won’t lie at times, will make you feel a bit pants at time. I feel sometimes like we are on an endless cycle until I remind us what our plans are.

Next up you need to work out your debt payments in priority order. So, I organised ours into debt that was on buy now pay later terms, tackling these to make sure no additional interest was due. Then the rest were listed into the highest rate interest we were paying.

This enabled us to attack the debt with the highest interest to clear this and focus on rolling that money onto the next debt, snowballing it.

We have in the past consolidated our debt into a lower interest or zero rate credit card. This is a great way to tackle the debt as one payment and one interest rate. I appreciate however that this is not suitable for everyone.

If your credit rating isn’t great Vanquis offer credit card that those with poor credit scores can apply for. So, if you are paying multiple store cards at high interest, this may be a great way to consolidate those and attack them as one bigger payment.

When it comes to debt though, the main thing is not to bury your head in the sand.

It won’t go away.

Taking steps to change your ways and tackling it head on will help you live a life with a bit less stress. It will also help improve your credit rating over time as you clear your debt.

Baby steps to clear your debt will turn into big leaps once you get it rolling, just don’t stop focusing on the end results.

This is a collaborative post.

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