One day you realize that you are in a serious personal financial disaster situation. If you want to avoid a situation that is so out of control there is no way out, you need to make the effort and take the time to get your money management and credit use habits back on track. You don’t need to rush into “debt consolidation” or “home equity loan.” You can work out a strategic repair plan for yourself.

Round up all credit reports, bill payment and credit card records, loan and mortgage records. You can find debt worksheets on line that will assist with making your plan. Most likely sections of your planning will be occurring at the same time.

Remember that there are 3 major credit reporting bureaus and you need all 3 reports. You must make sure that the reports are accurately reflecting your credit profile. Be like a bulldog and hang on. This will probably take some written communications between you and the agencies.

ALL of your financial obligations must be recorded in writing. This will be important for the money management part of the plan. All credit cards can be listed according to highest to lowest interest rate. Write down the minimum monthly payment on each card.

Figure out your disposable income. This is the amount of your salary that goes for necessities such as mortgage, car loans, credit card payments, utilities, other loan payments. When you subtract this amount from your salary, you will have your discretionary income. This is the income you can devote to reducing debt.

Decide which credit cards, and loans that you will pay down in order. For the first one you decide to pay down, pay as much more than minimum as you can. Pay the minimum on the others. When the first is paid off, start applying that same amount to the next debt in line. It won’t be a fast process.

To immerse yourself in this change of pattern of handling money, you need commitment and will not feel comfortable for awhile. Lifestyle changes are needed. You will need to cease unnecessary spending, buy only essentials, avoid travel, eat at home, pay bills on time and stop charging.

Your current situation was not something that “happened “to you. You are responsible for creating it and you are responsible for repairing it. It wasn’t created overnight. It won’t be fixed overnight.

Consumers will find information about their rights in the Fair Credit Reporting Act (FCRA). Please go to www.ftc.gov/s/statutes/feradoc.pdf for the details.

The FCRA is the basis for what we are entitled to see and the rights that we have as consumers with the credit reporting bureaus. Keep in mind that these credit bureaus are private businesses that need to “make a profit.” Therefore we have a right to know what their respective reports are saying about us.

As you have previously learned, there is a variety of information on your credit reports. Some of this information is accurate while some may be inaccurate. These reports may have outdated and completely false claims which can ruin your credit without you knowing it.

The FTC (Federal Trade Commission) tells us that we do not need to arrange for “magic fix” from a possibly dishonest agency. We can fix our credit ourselves. The FRCA basically says that the only “negative” information that is permitted to remain on your credit report is negative information that can be proved to be true.

When you review your credit reports, mark any information that you plan to dispute as inaccurate. Sorry, but if it’s true it has to stay. Then you will make your case for why the marked items are false

You will then put together all your documentation for your claims that information is inaccurate. This data is your proof. Send to the credit bureau(s). They must respond and they must prove that the information is true.

It is possible that you may decide that this project is really not something you can successfully complete on your own. Then you may consider “credit counseling.” Do this very cautiously. “Overnight” credit fix is too good to be true and these companies could ask for a lot of money “upfront” and charge a monthly fee. Although it might sound really good, remember that these agencies are also “for profit” and need to make money. Think SCAM.

There are some honest firms and individuals who will legitimately help. Try finding referrals from others to help you find reputable help who will handle your needs in a timely fashion.