Really, there are only two types of credit: good, and bad. Which type describes you and your financial situation? If your credit is out of control, there are ways to recover and move yourself from a bad credit risk to someone any banker will be glad to see. How do you know if you are a bad credit risk? If you can't say, within a very few dollars, how much you owe and to whom, chances are that you are a bad credit risk. If you can't count your credit cards on way less than the fingers of one hand (and thumb, ring finger and pinky don't count) you may be a bad credit risk. How to improve your credit score Managing credit isn't all that tough, but it's something a lot of us let spin right out of sight. But a few simple steps can help you stop that tailspin and level out your credit again. First, when your bills arrive, don't stuff them under the couch. Have a drawer or a basket within easy reach of the door where you can put them as soon as they come. Use that drawer only for your bills. Promise yourself that every month, you'll open that drawer, pull those babies out, and pay them on time. Then, make paying bills a feel-good time. Tell yourself that this is the responsible thing to do, that it shows creditors they can trust you to repay what you owe, that you're good for it. Have one place where you sit down with your bills to pay them. Make yourself a coffee and settle in. Write down on every bill what you paid and when you paid it. Subtract that amount from your debt. Keep track of that debt and watch it drop every month. Store your paid bills separately, in envelopes, and mark the new amount you owe on the outside so you can see how much you've paid down. You'll be amazed at how good you'll feel and how well you'll sleep (and how nice it is when creditors stop calling you). Keep your credit cards at home so you can't make impulse buys. When you feel the need to buy something, picture those bills in that drawer. Do you really want to add a new bill to the picture? Think how good it would feel to have an empty drawer. Consider fast-tracking your debt That means using credit wisely to help pay off what you owe. One way you can do that is through a car title loan. If you own your car, and it's less than eight years old, you can apply for a loan using your car as collateral. Sometimes you can get as much as 40% of the wholesale value of your car. It may sound crazy to use a debt to get rid of a debt, but sometimes you need that jumpstart to get you moving on paying debt down. Also, a car title loan enables you to pay off multiple bills and turn many monthly payments into one easier to make payment. A car title loan is easier to get, too, and has the advantage that it's a loan-and that makes you look good to other lenders in the future. So, which credit type are you going to choose to be? It's all up to you.
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