We all have our reasons for bad credit reports: College debt, family outings, all of those medical bills from being uninsured, shopping addictions, and all of those little "emergencies" we always have.

Whatever the reason is, lenders don't really care. All they see on your report is that you've been late on payments, or haven't paid at all, which leaves you with a very low credit score.

Many of you are reading this right now, nodding your heads and going "that's so me," well, if you're in this boat, we're going to cover the consequences of having bad credit, how to improve your credit, and how to stay out of the red.

A few consequences of having bad credit:

• A low credit score.
• Finding good apartments is very difficult because landlords almost always check your credit report.
• Financing a brand new car is nearly impossible.
• Interest rates are through the roof on credit cards, in some cases, your score might be so low that you couldn't get credit from anyone if you tried.
• You might not be able to find a reasonable mortgage.
• Major cell phone companies won't open an account with you without charging you a deposit that costs hundreds of dollars.
• Forget trying to finance expensive items like: computers, furniture, and household appliances.
• Finally, having bad credit is like carrying a 1,000 pound gorilla on your back, its a lot of weight and its embarrassing.

Tips on improving your credit score:

• Pay your current bills on time. If you are behind on your bills, make sure all of your accounts are open. ALWAYS PAY ON TIME. Alot of times accounts get reported to the credit bureau for being 30 or more days late. Every-time you pay late...your score goes down.

• Don't put off your student loans. I know they're like a second rent and its easy to let them slip, but if you start paying them right away, it will help you boost your score. Always be on time paying your student loans. In the event of an emergency, if you can't pay them, CALL YOUR LOAN COMPANY. Don't just let them slip, you have options if you have trouble making payments on time: forbearance, deferments, and consolidation.

• Keep a credit card open, but only make a few small purchases with it a month, and pay the ENTIRE balance off as soon as you get your bill. I recommend leaving one credit card open at all times, it helps you build your score if people see that you make your payments on time. Also, if you are good with your payments, you will be eligible for lower interest rates and your credit limit will expand. But like I said, try not to use it so much that the card starts to melt, you won't be able to keep yourself out of debt, if you keep landing in the red because you can't lay off the plastic.

• After the above has been tackled, then you should get a copy of your credit report and spend a good amount of time assessing it.

• Tackle any small accounts that may be on their first. This will help you feel good about making the right financial decision. If you pay them off in full, they will still be on your credit report for 7 years past the date when they defaulted, but it will be marked as paid satisfactorily and your score will go up.

• Then focus on any accounts that are still collecting interest (tackle the ones with the highest interest rate first) and are sitting on your credit report, pay them off ( usually these are credit cards that slip into default). Sometimes these are too much to even imagine paying off. Call the creditor, ask for a settlement offer. Most credit cards will accept .20 for every 1.00 you racked up on the card. If you can make a settlement offer and its STILL too much to pay break it down in payment plans, and stick to them!

• Check your credit report for any evidence of identity theft. If you see accounts that you don't recognize, contest them and demand that they are deleted.

• If you have bad credit, and you don't have any open credit cards, open a secured credit card that reports to all three credit bureaus, this will look positive to lenders if they can see you are making payments on time.

• If you are in a ton of debt, write to every creditor of every item on your credit report and beg them for settlement offers and payment plans. Make sure you obtain receipts from these debts you pay, and make sure they get reported as paid satisfactorily. Even those these accounts will remain on your report for seven years... your score will still go up. You can try to contest these accounts and get them deleted. If you see any accounts on your credit report that are more than seven years old, get them deleted.

Tips on staying out of debt:

It will be a long time before you are debt free. But if you listen to some of the above advice, I bet you will see that your score goes up quite a bit. Another important factor in raising your credit score is STAYING OUT OF DEBT. Here are some ideas that should help you

• Never have more than two credit cards open.
• Find an additional source of income to provide you with a little "cushion".
• Don't arrange unrealistic payment plans with those you have debts with, debt is like eating an elephant, you have to get it down one bite at a time.
• Open a savings account and stick 10% of every paycheck you get into savings. That way if an emergency comes up, you'll have the cash to save you, and you won't need to damage your credit further.
• Make a budget and stick to it. Have a set amount you spend every month on necessary living expenses, an amount to go towards paying debt, and an amount towards fun stuff and entertainment expenses.

If you still feel completely lost or like your debt is far to large for you to tackle on your own, find a reliable and real credit counselor before you think about declaring bankruptcy.

No matter how much debt you're in, the most important thing you can do is start taking care of it NOW, because if you let it fester, it may haunt you for most of your life.