by Lina Martinez

As November draws to a close and we spend our lunch breaks enjoying turkey sandwiches made from Thanksgiving leftovers, most of us have our sights set squarely on Christmas. While we all look forward to it as a time when we can make precious memories with the people who mean the most of us, there’s no denying that the holiday season can be a spend-a-thon. Last year we promised ourselves that we would not be caught unawares next Christmas. We started saving and paid into our savings accounts diligently… But life has a habit of getting in the way. Unforeseen expenses from a leaky roof to needing to replace the car can all make a big difference to our precariously balanced finances.

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Whatever steps we may take to avoid bad credit, sometimes we simply can’t earn enough to cover all of our debts and this can cause our credit scores to worsen. But fear not! Even if your credit rating is less than perfect, there’s no reason why you can’t enjoy a happy holiday. If you want to spend Christmas time out from under the shadow of debt, be sure to remember...

You can negotiate with your creditors

Most creditors are pretty good at providing support to borrowers who are having trouble making their repayments. In most cases, a creditor would rather accept a reduced monthly payment than no monthly payment at all. Thus, if your current repayments are beyond your household budget, your first port of call should be to get in touch with creditors and try to renegotiate terms of repayment. While it may be human nature to bury your head in the sand, you will have a much happier Christmas if you take the bull by the horns.

Bad credit doesn’t mean no credit

Don’t make the mistake of assuming that simply because you have a poor credit rating this means that no lines of credit are open to you. Consumer Portfolio Services, for example, make a living supplying car credit to those who desperately need a new car but are hampered by bankruptcy, foreclosure or low income. There are also a range of credit cards designed particularly to help those with poor credit. Just make sure that you are cognizant of interest rates so that you know exactly what you’ll be paying off.

Side hustle in your free time

The trouble that many of us have is that we simply can’t earn enough in our day jobs to repay our debts while still managing the day-to-day costs of living. If your current wage is insufficient to help you to manage your finances comfortably you may want to join the legions of people who make money in their free time through a side hustle. Most of them have very low startup costs and can make you a lot of money in your free time.   

Consolidate if your debts are getting too much for you

Finally, if you have numerous debts, each at a different rate of interest and each coming out of your bank account at a different time of month, this can be very difficult to manage both monetarily and psychologically. You may find that consolidating your debts with a consolidation loan makes them much easier to repay. What’s more, since all of your existing debts will be replaced with a single new one, it’s likely that your credit score will also improve.