- Part 1 – Recognizing Your Debt Problem and Obtaining Your Credit Report
- Part 2 – Acting on Your Credit Reports
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In Part 3 of learning how to repair your credit you discovered that it takes more than just taking action to solve your problems with all that debt. It is just as important, if not more so, to know how to take action and the first steps you need to take to make that action effective.

You also need to be aware. Improving your credit rating and decreasing the amount of debt you have takes constant vigilance. In other words, you need to keep watching your back.

This next step is all about “Observing” and keeping an eye out to keep your debt under control. That’s right! Repairing your credit takes observation on your part.

Let’s look at the current bills that you are obligated to pay. Usually you will encounter two types of bills that require attention on your part – bills that are current and up to date and bills that are past due. Ignoring to pay your bills on time just makes things worse. You will never be able to repair your credit and improve your credit rating if you continually delay paying your bills.

If you happen to have both up to date bills with no charges on them as well as overdue bills, it is best to pay your current bills first. If the credit bureaus are already flagging overdue bills, then paying bills that have no charges on them will at least NOT make matters worse. Stay as current as possible. This is one way to have some semblance of stability in your financial situation. If your employer doesn’t pay you enough, maybe it’s time to look for another job…or…look for a second part time job to supplement your income.

You need to ask yourself what is worse for you. Do you find a way to supplement your income to pay off your debs faster, or do you do nothing and fall deeper and deeper into the hole of mounting debt and a terrible credit score.

Once your current bills are taken care of, your next task is to start paying off your overdue and other late bills. If those bills have not reached the credit bureaus yet, then take of them immediately or, at least, as soon as possible. A little tip that may help is that even a small payment towards your bill can go a long way to prevent credit bureaus from being notified. The fact is, if you are making any type of effort in paying off a bill it could keep you out of court.

As I’m sure you know by now, a very crucial step towards repairing your credit is to keep up to date with your bill payments as much as you can. However, if for some reason you are finding it very difficult to make a payment, you would be wise to contact your creditor and let them know that you need to delay on a payment. Creditors can be more forgiving if you call them if you are having trouble. This can make it easier for them to negotiate a payment scheme. They may even lower your monthly payments, or even your bill. The best solution then is observing, and making an effort to repair your credit.

Secured and Unsecured Debt

Most people have some type of payments that they always need to make. House, or mortgage payments, car loans, credit card payments and even utility bills are four of the most popular. Understanding the types of debts you have is a major step in achieving the repairs necessary to your credit.

Secured Debt:

Secured debts are any debts that have collateral attached. In other words your Mortgage is a secured loan, so if you end up missing your payments you could end up living on the streets. Car loans are secured loans and can guarantee that you will be walking to work or taking the bus if you miss a couple of payments.

If you are asked for collateral, even certain department store credit cards are secured as well. In other words when you buy merchandise, make sure you pay these off.

Unsecured Debt:

Unsecured debts are rental payments, utility bills, personal loans from family or friends, student loans, as well as most major credit cards.

What do secured and unsecured debt mean to you?

Simple! It means it is more important to pay off your secure loans first before unsecured loans. If you ignore for forget to pay off your unsecured loans, at least you will still have shelter and don’t have to walk if you don’t want to. You have much more to lose by neglecting to pay down your secured loans.

If you are finding it difficult to pay your mortgage payments, check with your mortgage provider and look into some options that may be available to help you. There might be a second home loan available that offers cash back or other great commodities that can help you to get out of debt and repair your credit.

IMPORTANT NOTE: Don’t wait until it is too late. I cannot stress this enough. If you are having difficulty making your payments, seek help. If things are bad but not so bad that you lose control, strive to gain that control back.

There are mortgages available that offer over-payments and underpayments. This will allow you to over pay your loan on one month when times are good, and underpay the next month when times are tough.

You may even be able to find a loan that can offer a vacation pay, where you can use the money to pay down your mortgage if you don’t want to go on vacation. This can be a great to help you pay down your loan faster than other types of loans.

If you have multiple credit cards, you should look into applying for a credit card that will allow you to pay off other cards. This can be a great way to help you repair your credit faster.

Credit Card Debt Consolidation

Where there is a will there is a way. A solution to help you in repairing your credit and get of of debt is always at hand if you are willing to do the work. Just remember that you need to keep a close watch on all your bills and understand the importance of each of them. Always pay down your secured loans first before the unsecured variety. And, most important, remember that getting out of debt is a step by step approach – One step at a time!

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