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Bad Credit Is Not So Bad

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Working as a financial adviser can be both frustrating and illuminating. You get the two ends of the economic human spectrum.

  1. The person who has a reasonable amount of money and is looking to invest.
  2. The person who is continually in debt and barely makes it from payday to payday.

Here’s a Situation

The latter is the more frustrating. For example, one client I had complained about his debt not going away. He had made a couple of big payments towards his credit card bill, but the remaining balance was still quite large.

“How do you feel about being in debt?” I asked.

He said he felt bad about it because “everyone knows that being in debt and owing a lot on your credit cards is bad.”

I thought: “Really?” But did he want to discuss any plan to pay it off? Nope.

Debt Worry is Freedom Loss

Here’s the thing. If you feel bad about your current debt, you have no freedom. There will be little voices in your head saying things like: “Shame on me for using that credit card.”
Or: “Hey, you’re not very good with money, are you?”
And: “You should never buy anything using your credit card ever again.”

Do you know how these statements running through your head make you feel? They make you feel weak and wrong. They make you feel like a victim. Not very empowering, are they? When you’re feeling guilty for something you did in your past, you’ll find it very hard to be powerful in the present.

Guilty, Your Honour

Guilt and shame are the most disempowering emotions you can experience. The other thing to remember is if all your attention and thoughts are centered on “bad debt,” guess what’s going to happen? You will attract more of the same kind of debt!

  • As a borrower, you should be grateful for what the credit or loan has provided for you.
  • If you want to make the trip to being debt-free, then why not do it regret-free.

Life Experience

By that, I am not advising you to go crazy and rack up more debt. Feeling sorry for what you have done is a waste of emotion and entirely useless. If you want a reason to look back at unpleasant things in your life, then look at what the experiences have taught you. The more objective you are, the better you learn. Did your actions have the desired results? Were there any other options you could have chosen at the time?

Feeling Sorry for Yourself

Man in a box This is a game you can play with yourself when you are drowning in your sorrows wondering how you didn’t reach your income goals last year or kicking yourself because you missed that great investment. Since when was your life a test on how well you do financially? Everybody misses opportunities, acts compulsively, gets a little scared, stays within their comfort zone, or just gets plain lazy at some stage. Is that a big deal? Move on.

Never Stop Trying

Just grab that bat and step up to the plate and have another swing. This time, swing with a little more focus, hit harder, with commitment. And smile as you swing! You are creating a separation from yourself when you beat yourself up. It makes you feel small and makes your financial woes seem more significant than they are.

Appreciation and happiness are very empowering emotions. They will give you the ability to appreciate all those things you have learned from every decision about money you have made in the past. You can look forward with optimism about your financial future, and you can watch backward in your life and extract the positives. Is there such as thing as a mistake? No, only experiences.

Can you borrow when you have bad credit?

The simple answer to that is ‘Yes.’ The next question you might ask is ‘How’?

Understanding How to Borrow Money With Bad Credit

You would have noticed a trend in the available borrowing options for people who have bad credit. Loan costs are higher, interest increase, and they may require collateral, and, of course, the hassle. To borrow with bad credit history, you need to make it worthwhile for the lender. In some way, to make it worth the higher risk of letting you borrow the money you want. That ‘making it worth their while’ usually means higher fees.

If you have bad credit and want to borrow, it’s not a bad idea to have a good understanding of what the lenders want so the loan can be a win/win for both parties. If you have bad credit, it may not prevent you from borrowing, but fixing your credit is a far better option. That way you can get back on your feet financially and be able to unlock all the benefits that good credit borrowing can provide.

Are you serious about getting rid of your debt and putting an end to that debt cycle of endless bill payments and being unable to make ends meet? There’s nothing worse than that routine of when a bill arrives, rushing around to find the money, and as you get that squared away, another bill hits your letterbox.

Things You Can Do

  1. Understand your credit score and check it over.
  2. If you have bad credit, there are ways to fix it. Paying back loans on time, and making timely payments to your credit card. Build your score.
  3. Stay away from Payday Loans. It’s more than likely you will get one, but high-interest rates, loan costs, and penalties can make them an unsafe way to build your credit score.
  4. Try an installment lender if you are desperate for cash. They will consider more than your credit score when reviewing your application.
  5. Become a co-borrower/cardholder on a friend or relative’s Credit Card. It’s mainly using their good credit rating to help your credit rating.
  6. Choose a secured loan. You will have to provide collateral, but with some security offered, the lender is going to be far more agreeable to approve a loan.
  7. Join a Credit Union and after membership, apply for a loan. Credit unions don’t base the application on just your credit score.
  8. Get a Guarantor Loan. If you can find a friend or relative to go guarantor and they have a good credit score, the lender will approve the loan.
  9. Borrow from family or friends. This is not the greatest option, and it might break up a friendship or cause discomfort at a family gathering, but it is a way to borrow money.
  10. Borrow from your employer. If you have a good work track record and an understanding boss, approach him for a loan. Make an agreement. The employer is in a situation where he can deduct monies from your paycheck.

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