ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Fix Bad Credit without Shredding Your Credit Cards

Updated on February 2, 2010

How to Fix Bad Credit without Shredding Your Credit Cards

Bad credit is a result of expenses outstripping available income. It is normally a gradual process that culminates with one being totally unable to meet their debts. When this happens, the solution is not to run away but to determine where, and when it begun.

Expenditure is normally the culprit. It has the uncanny ability of creeping in unnoticed, and multiplies like a virus. Therefore, the first line of attacking ‘unruly credit’ is by looking at the expenses critically. The expenses can be categorized into two major groups namely essential and non-essential. The obvious assumption is that nothing can be done about ‘essential expenses,’ since they have to be incurred. In this group will be expenses on food, rent, utilities, tuition fees and medical insurance.

The second group will comprise of non-essential expenses for example car expenses, clothes, newspapers, cable TV and the like. The assumption is that one can live without them. Unfortunately, the distinction is not that clear cut. For purposes of fixing bad credit, therefore, I would recommend that the classification should on discretionary and non-discretionary expenses. This approach will allow the process of fixing bad credit to take into consideration all expenses, without any preconditions.

The other assumption is that incomes are fixed, cannot be varied as readily as expenses. While this is true in the short term, in the long run incomes can also be varied. For purposes of fixing bad credit we shall assume that income is fixed and is earned regularly. (Forget about working overtime and selling your old electronic equipment, that won't help).

The regularity of income will determine the period of review. If income is received on weekly basis, the expenses should also be on weekly basis. If it is not possible to determine the actual amount on a weekly basis, an estimate should be made.

Taking a piece paper and writing down every item that requires you to open your wallet, hand over your credit card or cash can ensure that a comprehensive list of all expenses is made.

The list should include current debts and a provision of savings of at least one-tenth of the income. This is to ensure that once, the bad credit is fixed; there will be provision for a ‘rainy day’. The amounts of expenses should be totalled and subtracted from the income for the same period. (Simply matching expenditure against available income).

The best method is to list the items in columns. The first column is the item, then the amount currently expensed, then the third column will be the first review. The review will allow each item to be scrutinised and justified. (By review I mean questioning the amount, the validity, the necessity, the alternatives and so forth).

After a number of reviews and justification, the expenses should be equated to the income.

For example, food is an essential expenditure, but there will be sizable scope of discretion in the type of food, the nutritional value, taste, availability and cost. You may need to reduce those "eat out nights." The amount that meets all the most attributes will be taken. Therefore, the menus, for each meal may have to be specified for each period and costed depending on availability, convenience and so forth. Personal hygiene can also be classified as non- essential but again there will be a big scope of discretion. (If you are not an athlete perhaps you should not take five showers per day, neither do you want to loose your job for stinking like a skunk in the office for not taking a bath daily).

When all the items have been classified and justified, expenditures will be equalled to income.

The next phase will be the execution of the plan. This is the hardest part and will call for serious determination. The compliance to the planned expenses will determine the success of the exercise.

Once this exercise is repeated for a number of times the desired result of a balanced budget will have been achieved. Constant review will ensure that at the end of the period the incomes and the expenditure is equal and any unforeseen loopholes where expenses are incurred without matching income avoided. Each review will entail justification of the amount, investigation of best discounts, to cutting out any unnecessary amounts. (After some time, it will amaze you to discover the amount of unnecessary expenditure you take for granted).



Comments

Submit a Comment

No comments yet.

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)