Sometimes the best way to solve your credit problems is by generating extra income. That will help give you the resources that you need to fix a lot of the individual problems within your credit profile.
Why You May Need Extra Income to Solve Your Credit Problems
If your bad credit is being caused in part by unpaid, past due balances, then the single best strategy you can implement to improve your credit is to pay those balances off.
Since it’s likely that they became past-due in first place because you didn’t have the money to pay them, you will almost certainly need to generate extra income in order to pay them off.
Another area where an extra income will help is if you need to pay down credit card balances in order to improve your credit utilization ratio. This is the amount of combined credit card debt you owe, divided by your combined available credit limits. The closer that you can move this ratio down to 30% or less, the more your credit score will improve.
Having an extra income will also help if you are trying to negotiate settling your debts for less than the full amount owed. This is a strategy used to help people get out of crushing debt. For example, if you owe $2,000 on a credit line, you may be able to get the lender to accept $1,000 in satisfaction of the loan. But in order to do that, you may need extra income to accumulate the money that will be necessary for the settlement offer.
What are the best ways to generate extra income?
Take Advantage of Income Opportunities at Your Current Job
There are often opportunities to earn extra income on the job, that might be ignored in the usual course of business. Obviously you should work any overtime that you can get, but there may also be various bonuses available that aren’t particularly well known or well used. Learn to negotiate with your boss for fair compensation for extra efforts.
For example, find out if your employer pays referral bonuses for recommending either new employees, or even new customers or clients. Some employers pay bonuses for these referrals, that might amount to several hundred dollars. If for example you find that your employer pays a bonus for new clients or customers, you may want to make an effort to excel in that area. It could work out to be a steady income enhancement.
Sell Some Possessions
Most people have a bunch of things in their homes that they either seldom use, or don’t use at all. Try selling those items on eBay, Craigslist, or even with a garage sale. You may have hundreds of dollars worth of possessions that would be better used for paying down debt, or to settle a debt or two for less than the amount owed.
Get a Part-time Job
This is probably the most obvious way to generate an extra income. A lot of people don’t like this idea, because it will involve spending extra time outside the household. But it may be easier to do if you focus on the fact that it will help you solve your credit problems. Yes, you will have to invest the time and effort, but you will be doing it for a very important long-term cause.
Something else to consider is that a part-time job will only be temporary. That is, you will only need to keep the job until you have fixed some credit problems. It may be easier to tolerate a second job knowing that it will have a limited duration.
Pick up Contract Work or Start a Side Business
This can be more complicated than the other methods, but it can also become a permanent extra income. And in many cases, you can be up and running within a month or two. That will not only help you to solve your credit problems, but it will also give you the extra budget flexibility that will keep you from getting into credit issues in the first place.
Start by doing an inventory of the various skills that you have. This should include skills that you use both on the job and off. Investigate any of these skills to determine if it can be used to perform contract work or to start a side business.
You don’t have to be a certified expert in a field to make money at it. As long as you are at least better than average, you can usually find people who will pay you to do such work. Once you get it going, and start getting some referrals, you will be in business for the long haul. And that can help solve a lot more than your credit problems.
If Extra Income Won’t Help Fix Your Credit Problems
There are times when credit problems are so severe that there is truly nothing you can do to repair them on your own. If that describes your situation, then your best strategy is to get professional help. A competent credit law firm will be your best option. They will be able to fix your credit problems in the shortest amount of time possible, and with the least amount of discomfort.
But if you combine that professional help with your own efforts to generate extra income, the whole process will work even better. The more money you have available to settle debts, the easier it will be even for a law firm to solve your credit problems.
Do what you can to get the extra income that you need to help fix your credit, and seek the help of a credit law firm if your own efforts are falling short.