Credit problems and low credit scores can cause a person great difficulty. Higher interest rates, bigger deposits, denial of credit applications can all cause great chaos in your life. So how can you help yourself and repair what you can in order to simplify your financial life?

First off you will need to get a credit report from each of the big three credit reporting agencies, TransUnion, Equifax and Experian. You are entitled to one free report each year. You can also pay a fee and get a combined report that may prove to be helpful.

As soon as you get your report, check everything for accuracy. It has been reported that as many as 79% of all credit reports contain erroneous information. It may be the errors that are causing you so many problems. Credit reports are not known for accuracy.

You should be aware that the credit reporting agencies are paid to compile information and sell that information. They don’t care if the information is accurate and truthful or not. It doesn’t matter because they get paid for the information period and to them the accuracy of that information is irrelevant. In fact the only person who cares if the information on your report is correct is you!

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If only you could use the principles of a balance transfer credit card and move your remaining balance from one vehicle to the next. That’s right - you can! This tongue-in-cheek statement reflects the state of many vehicle loans today. It is called being ‘upside-down’ on your loan. You have transferred the remaining loan balance from one vehicle to another and now owe more money on your existing car that it will ever be worth. Sometimes it can be as much as two to three times the value.

You have to stop the cycle and take control of this beast that is helping to wreck your finances. Here are some tips that you must adhere to going forward in order to keep your car from becoming one big liability on your financial statement.

Keep your car longer. Now that you are in this predicament on your vehicle that is aging and building up miles, you have a choice: keep the vehicle and drive it until the wheels fall off and you pay off the loan, or sell it for market value to a new owner and get the bank to transfer the balance to an unsecured loan in order to pay it off. The realization that at some point you have to stop this cycle should shake you awake to the financial mess that this causes.

Buy used not new. The next vehicle that you buy should be used, not brand new. The reason is because you take a huge hit on depreciation (the value goes down) as soon as you drive the new vehicle off of the lot. Why not let someone else take that hit. Buy used from now on and save yourself some money.

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In yesterday’s world where the stock market was solid and the unemployment rate was standard, bankruptcy had a negative stigma attached to it. Many people thought that hiring a bankruptcy attorney was a last resort in coping with financial difficulty. However, from the standpoint of today’s plummeting economy, where foreclosures are the norm and significant debt is the standard of living, many people in financial debt are now resorting to bankruptcy as a starting point. As the economy continues to tumble, attorneys report the number of bankruptcies filed in recent years increases almost twofold in many parts of California. Debtors’ fear of credit harm due to filing bankruptcy may be significantly outweighed by the benefits to their estate of filing bankruptcy.

Filing for bankruptcy provides numerous benefits to debtors depending on the type of bankruptcy filed. Some of the most crucial benefits include eliminating a second mortgage, a complete hold on any foreclosure proceeding or lawsuit, and discharging most or all debts. Bankruptcy is broken down into numerous sections with the most common ones for individuals being Chapter 7 and Chapter 13.

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