You got laid off or your company closed down.

You had a divorce and are now trying to pick up the threads and move on.

You defaulted on your mortgage and your house got repossessed.

Your credit line got cut as you couldn’t find a job.

Well, these are common complaints in today’s scenario. Credit crunch has hit our society and everyone is going through a financial maze. People are paralyzed and don’t know what has hit them. Relationships are falling apart and couples are trying to protect what little money they have. Those who got laid off are turning to the internet to earn a living and many have done well thanks to internet marketing. If one in a household has a job then the other jumps on to the internet highway. This helps to put food on the table for the family as well as pay some debts. This is indeed an alarming situation. Under these circumstances the first task you need to do is repair your credit. How do you do it? Well, follow these below mentioned tips and you will be back on the right track. First and foremost tackle your credit line on a war footing.

• Ask for your credit report. Your credit report is your report card to your financial well being. Your income as well as expenses is reported on it. Check if all the transactions are correct. There are likely to be errors. FICO credit score is the most popular one in America. There are also other credit bureaus who give credit scores like Transunion, Experian, and Vantage score and so on. All the transactions mentioned in your credit report will be converted into a score of three digits using a mathematical formula. Take a look at your credit score. It should be more than 600. Else try and improve it.
• Pay utility bills on time. Paying electricity and telephone bills within the due date will help you to improve your score.
• Pay credit card dues regularly without any default. Also using your credit card with the same lender for a long duration of time, improves your eligibility for credit.
• Re-Payment of auto loan and other loans like student loan if any will help to repair your credit. The record of these repayments will help you to improve your credit score. Also this will show to the lender that you are sincere in repaying your loans. Everyone goes through adversity in life. The ability to bounce back and repair your credit is what will help gain trust with your lenders.
• Debt consolidation is a wise option. If you have more than one loan put them all together and convert it into one single loan. This is known as debt consolidation. The advantage of debt consolidation is your monthly outgoing will be minimum, as the repayment period gets extended up to twenty years. Moreover you will be dealing with a single lender.
• Get a secured credit card. This will help you to reopen credit. Make a small deposit with your bank and get credit over it. The bank will also not hesitate to give you a credit card. Regular repayment on secured credit card will help to improve credit score.
• Open credit with neighborhood grocer. Your neighborhood grocer knows you well and will not hesitate to give you credit. Start with a small amount and increase it. After all we cannot do without grocery.
• Get a credit repair consultant. If after following all the above mentioned tips you’re still not able to improve your score (which is unlikely) hire a credit repair consultant who can help you to get out of debt. Many of them will know most of the lenders and maybe they can talk on your behalf and help you with reduced repayments. For example- you’ve defaulted on your repayments and your loans and credit cards are suspended, then these consultants will speak to the lender and get the accounts closed by making nominal repayments. This will help to wipe out all negative transactions from your report.
• Go piggyback on a relative. Keep this as the last option. You can always ask your parent or siblings or a dear friend who has excellent credit to add you on their credit card. That will import their good credit history on to your report. This can help you to repair your credit and start afresh again.