1. Keep a Spending Journal. Often, it’s not the big purchases that can cause problems, but instead, several small purchases that add up. Fast food, movie rentals, and other little conveniences we take for granted can quickly add up. By keeping a diary of exactly what you spend on a daily basis, you can track precisely where your money goes when you make these ‘unseen’ purchases. Once you understand your own spending habits, you’ll be better prepared to stick to your financial goals when temptation arises.

2. Create a Budget. This goes hand-in-hand with your spending journal. In order to control your spending, you have to set reasonable limits. Look at your bills and see where you can cut back, as well as areas that you may need to spend more in order to reach your goals – putting away more money into your health savings account may be useful if you are planning to have a major procedure, and want to avoid maxing out a credit card, for instance.

3. Prioritize. When you are setting goals for improving your credit, prioritize what’s most important. Getting current on everything at once may not be possible, but you can decide to get current and stay current on those cards that are charging the highest fees, for example. Once you’ve met one goal, move on to the next – credit repair is a dynamic process, and as long as you are willing to move forward, you will see positive results.

4. Make a Wish List. Don’t forget to reward yourself (within reason) as your credit scores improve. Try to think of ways to treat yourself that won’t put you back into debt. Save up for a well-deserved vacation, or treat yourself to dinner and a movie twice a month. The trick here is to find something that will motivate you, without breaking the bank.

5. Automate Your Bill Pay. If you find that you are often charged late-fees because you forget the payment due date, why not pay automatically through your bank? Most banks now offer online bill pay as well, so avoiding late fees and the damage to your credit scores can be as simple as a click of the mouse.

6. Keep Track of Your Progress. Don’t forget to check your credit report and scores to gauge your progress after several months. Everyone gets one credit report per year for free – and people in some states get 2, so check your local regulations. Make sure that companies are reporting your timely payments accurately, and don’t forget that you can dispute inaccurate information on your report. If you need help with the process, work with a reputable credit repair agency to get the job done.

The ‘trick’ to credit repair is in knowing that it is an ongoing process. As you move towards your financial goals, always be willing to incorporate ways that will make it easier for you to succeed.

Buy Now, Pay Later – At What Cost?

Traditional holiday credit in the form of 90 days of no payments and no interest is common in many stores, and it can help you to improve your credit standings as well, if you’re smart about how you spend. The key is to only purchase what you know you will be able to pay off within the timeframe of the special offer. This will allow you to save money in two key ways – by avoiding the interest payments if you’d charged your purchases to a credit card, and by keeping the balances on your credit cards low during the holiday season.

Where many people fail to shop wisely is by taking advantage of the deferred payment options in addition to spending on their credit cards. This is often a costly mistake – people end up over-extended, and then they are hit with compound interest charges that accrue from the moment of the initial purchase. That’s three months of interest charges added into the initial purchases, and many times, the interest rate is several times higher than that of a typical credit card. So how can you take advantage of holiday financing without breaking the bank? It’s simple if you plan ahead:

• Make a budget: Plan out your purchases now, before the holiday rush, and get a cost estimate of how much you’re likely to spend before you start your shopping, whether online or in retail stores.

• Make a plan: Big ticket items can often take advantage of special financing directly from the store so shop around and find the one that makes the most sense for your budget.

• Stick to the plan: When it’s time to shop, keep your price range in mind – don’t give in to the temptation to use your credit cards to finance your holiday if you’re using deferred payment options as well. You want to be able to pay off all of your holiday shopping before those high interest rates set in.

• Read the fine print: Make sure that any deferred payment plans you agree to spell out the exact date that payment is due in order to take advantage of the special financing. Be aware that if you miss the initial payment date, the interest rate may default to a much higher percentage – so shop wisely.

One word of caution when it comes to deferred financing – while it can help your credit score to maintain reasonable balances on your credit cards throughout the holiday season, if you default on the deferred payment arrangement, it will undo all of your careful planning and hard work. These finance companies will report any late payments the same as your credit card company, so be certain to budget wisely and don’t overspend. If handled properly, buy now, pay later can pay off not only in interest savings, but in saving you the holiday credit crunch as well.

You can dispute a bankruptcy on your credit report the same way you can any other listing. If you are fortunate enough to get the bankruptcy removed, you will be able to start repairing your credit much easier. However, if you don’t change your spending habits and make some lifestyle changes, removing your bankruptcy will only delay your financial misery and you will be back where you started.

Learning from your mistakes and living below your means is the only way you will ever attain financial peace. Learn how to make a budget and stick with it. You should probably only get a couple credit cards strictly to rebuild credit. Discipline yourself to use them for nothing but credit rebuilding.

When you are ready to start rebuilding your credit (which should be immediately) you will need to start small. Don’t expect lenders to give your high credit limits right away. You may have to start off with unsecured credit cards with high interest rates. That’s why I suggest keeping a balance of only $50-$100 and ONLY using these credit cards to rebuild your credit.

While you are adding positive trade lines, it is important to also try to remove bad credit from your credit report. If you use both methods correctly, you should have respectable credit scores within 6 months to a year. At that time, you will be able to get better interest rates and should consider transferring any balances from the high interest cards to the new lower interest cards. Just remember, the best thing you can do for your financial future is learn how and why you got yourself into this situation and how you’re going to avoid it from happening again.