by Renee Ruby

Created on: December 07, 2008

Good Credit Gone Bad ?

It is amazing how quickly a comfortable lifestyle can degrade. It is equally amazing how many people have no idea how they got there. Good credit is not just something that happens; it is something you must work on to keep. If you find yourself suddenly with credit denials and those nagging collection phone calls, you may be a victim of 'Good Credit Gone Bad'.

If you find yourself in this dilemma, the first thing to do is 'Stop' and survey the damage. You need to sit down, pull out all the bills and bank account statements and find out where it started. You may be thinking, "Who cares how it started; how do I get out of it!" If you want to be sure you do not end up there again it is important to find out how it began. Bad credit habits must be broken. It's like going on a diet; unless you completely change your lifestyle to keep the weight off, it will come back.

So you now have lots of neat little piles spread out before you, so where to start? Grab a notebook and a pencil. Begin with your basic living expenses. Leave out those that you can live without - bare basics. Create a column with your average bring home income for one month. Be realistic. Subtract, one-at-a-time each living expense. Rent or mortgage, savings, car payment, utilities, telephone, gas and any other living expenses or expenses that you must have to keep your job. What is left, are your discretionary expenses. Check your accounts and calculate the average you spend on groceries per month and subtract that next. Now, groceries are not really discretionary. You must eat to live. However, the amount you spend may be too much. If you have children that have extra-curricular activities, subtract those expenses next. These are the discretionary expenses you can least live without.

Hopefully at this point you still have a positive balance. If not, you are in real trouble and probably need some professional intervention. Otherwise, read on. Now, you need to take a look at what is left and what outstanding expenses are left. Add all of the outstanding monthly expenses and subtract them from your balance. What does your balance look like now? Even if you still have a positive balance there is obviously trouble somewhere, or you would not be sitting among the piles trying to figure it all out. Look at all the rest of the expenditures each month that are not regular, monthly expenditures. Go back a minimum of a year. Include ATM withdrawals, dining out, entertainment, shopping for

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