Being turned down for a loan is embarrassing. People with bad credit or no credit are thought to be deadbeats who do not pay their bills on time. While in a small percentage of cases that may be a fact, the rest of the percentage of people with bad credit have been hit by life’s circumstances. Bad situations usually hit us in our wallets. The loss of a job, the death of a spouse, divorce or medical issues are just a few of the legitimate reasons for people to get behind on bills.

Once you get behind on a bill or payment, it is as if a hole is dug directly under your feet. Every time you try to crawl out, more dirt crumbles into the hole blocking your climb. It is quite difficult to get ahead of a bill. By paying extra every month, you can often get caught up, but that could take a very long time. In the meantime, your credit will reflect missed and late payments. Sometimes, you will have to triage the important bills. Gas for heat, food on the table and electricity will come before other less essential bills like credit card payments. The credit companies will list all accounts that are in arrears or were not paid at all. Every account that was late or that you defaulted on will show up on the credit report and be reflected in your credit score. Unfortunately, the credit company will not reflect the circumstances surrounding the defaults. The report is based on cold, hard facts and numbers that banks and financial institutions use to judge the likelihood that you are a bad credit risk. The year that you were laid off unexpectedly will only show up as late utility payments and will not reflect why the payments were late. It will not show the odd jobs you had to work just to get the company the little bit each month that you paid them. Cleaning or rebuilding credit is a long process. Reporting agencies like banks and utility companies can take, but a moment to ruin your credit, sadly, it takes years to clean them up. This can be especially frustrating if the report is wrong or contains mistakes. Mistakes on a credit report are not rare. All the credit agency knows is what is reported to them. If the electric company says you owed money, but you know the account was closed with a zero balance, the credit agency is only going to have what is reported by the electric company. This is why it is so important to get a free copy of your credit report each year. Errors in the information given to the credit agency are very common. Contact the credit agency with the correct information with supporting documents, if possible, and fix your report. You can contact the company that reported the incorrect information as well. Do not count on them to fix the data, though, make sure you follow up on the information with the credit agency. After making sure all information is correct, or fixing the information that isn’t, make a list of all outstanding money owed that was reported to the credit agency. Call around to make arrangements for payment. Even a small amount monthly can go a long way towards showing a bank that there was a good effort made to pay back outstanding balances.

It may take some time, even a few years, to completely repair a bad credit rating. In the meantime, it may be difficult to obtain a loan from a bank or other financial institution. This could be a serious problem for anyone that needs a new car to replace their existing broken-down vehicle. Often, when you are searching for a job with better income or you were laid off and need to expand the location of your search, you need a reliable vehicle.

You may be trying to clean up your credit, taking the right steps to ensure that eventually you will have a high credit score. One day, you want to own a home or make some other major purchase. Until you get to that point, you are in limbo with a bad credit score and no helping hand to guide you past the shadow of your bad credit. There are many places that will judge the effort and the current state of your credit report. These companies look beyond the numbers to the individual’s reliability right now. These car loan companies and dependable dealerships can help those with bad or no credit get the vehicle they need immediately, instead of having to wait years for bad credit to be fixed.

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