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Self-help is the Best Help

A new report from the Federal Trade Commission warns of the dangers of so-called ‘credit repair’ services. These companies bombard consumers with emails, letters and pop-ups declaring a ’solution to your poor credit’. When in truth, many of these companies are unlicensed, fly-by-night operations that end up taking your money without providing any service at all.

Most honest financial consultants (the FTC included) will tell you that the only true way to improve your bad credit standing is through self-help measures. Paying off debts, finding ways to save and cutting back on unneeded expenses are traditional, but effective ways, to improve your credit standing.

One bad cycle that many consumers get trapped in is the circulating credit card debt. Most credit cards offer easy access to money, but come equipped with exceptionally high interest rates. Miss a payment or overdraw your limit and credit card companies will report this slip-up to credit bureaus, only further solidifying bad credit status.

However, short-term options such as payday loans and cash advances - when used responsibly and only in emergency situations - are a good way to overcome short-term cash needs without endangering your credit standing. Payday loans can help you out of a financial jam, without miring you in the cycle of high APR and debts that other forms of lending might.

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