Do It Yourself Credit Repair

Got money problems? Are you getting bombarded with junk mail, TV ads, and internet pop-ups touting the tempting virtues of bazillions of different credit counseling services that claim they'll find you an easy way out of debt, so long as you'll pay them an exorbitant amount of money first? Does it make sense to go further into debt just to get out of debt?

No, it makes no sense at all. Sure, there are many well-respected credit counseling services out there that work on a not-for-profit basis, that help struggling consumers for free. As beneficial as these services are, not everybody feels comfortable turning to them. Some people think of seeking outside financial help as pretty much like airing dirty laundry in public. Isn't there some way to get help a little more privately? Discreetly?

There sure is. There are several do it yourself credit repair strategies that are bringing financial relief to millions of Americans. One way is to simply increase income. Another is to reduce expenses. A third, quicker, way is to do both at the same time. Another way is often referred to as the snowballing method.

Snowballing requires taking a very serious, no-nonsense approach to evaluating your financial situation. Snowballing or not, this serious, no-nonsense evaluation is the first step in any do it yourself credit repair strategy so just bite the bullet and go for it.

Let's say your financial situation looks a little bit like this:

  • Student loans have a $10,000 balance and you must pay $250 each month.
  • Credit Card A has a $1,000 balance and $25 monthly payment.
  • Credit Card B has a $3,000 balance and $50 payment.
  • The furniture store balance is $5,000, with $200 monthly payments.

Your monthly payments total $525. For the snowballing strategy to work, expect to pay no less than $625 each month. Do this:

  • Identify the account that allows the smallest monthly payment, in this case the $25 to Credit Card A.
  • Pay Credit Card A the $25 regular monthly payment but add the extra $100 to it, paying $125 each month until that balance is paid in full.
  • Make the other payments as usual, paying the amounts listed above.
  • When Credit Card A is paid in full, you'll have $125 each month to add to the payments you make to the account that calls for the second smallest payment. In this scenario, that's Credit Card B.
  • Credit Card B requires a $50 payment but pay $175 instead. That's the regular $50 payment plus the $125 that's freed up after paying off Credit Card A.
  • When Credit Card B is paid in full, you'll have an extra $175 allocated for bill-paying each month so add that amount to the account that calls for the third smallest payment - the furniture store.
  • Make the regular furniture store payments of $200 plus the freshly available $175 (total monthly payment of $375) until the furniture store is paid in full.
  • Now you've got just the student loans to worry about. You've been paying them the expected $250 each month all along the way. Now, lucky you, you've got the full $625 allocated for debt relief to devote entirely to student loans. Make student loan payments of $625 until that baby's paid off, too.

Don't accumulate any additional debt until all these accounts are paid off. When you've got a zero-dollar balance all across the board, your do it yourself credit repair strategy will bring you $625 each month that you can spend any way you want to. Your credit rating will have increased dramatically. You will have trained yourself to be a much more effective, disciplined money manager. And, you'll probably go to sleep every night with a smile, not a frown, on your proud and contented face.

Don't expect your do it yourself credit repair program to bring instant relief. It won't. It took you a long time to get into the trouble zone and it will take a long time to get out of it. But Americans from coast to coast are finding that snowballing their debt payments this way brings visible results much sooner than they'd anticipated. And they're not going deeper into debt paying somebody else to help them do what they can do themselves.

If they can do it, you can do it, too.