These are uncertain financial times. Most experts estimate that many American families are only a few paycheques away from serious financial trouble, so when a job is lost or an injury occurs, fear and uncertainty about the future take very little time to set in. If you’re in a volatile financial situation, you may find it very tempting to avoid your money troubles in the hopes that you’ll figure them all out sooner rather than later. Before you start to drown in debt, there are some tactics that you can employ which can positively affect your credit score and protect you from financial damage.

Pay Monthly

If you’re staring down the barrel of major debt issues or delinquencies on your accounts, do everything that you can to pay monthly balances off on time. Any missed payments will greatly affect what your credit score says about you, and each will be permanently recorded on your credit score. Wherever possible, put money towards these debts before entertainment or unnecessary spending.

Avoid Applying For More Debt

As bills pile up and payments risk being missed, you may find yourself overwhelmed and tempted to take out new accounts to help pay your outstanding ones. Each new account opened will negatively affect your credit score, and in fact will have an impact even if you are rejected.

Don’t Close Accounts

Closing accounts that have been left unpaid is a tempting move to make, but keep in mind that this will not help you improve your credit score. The best tactic is to pay whatever you can towards your debts without fully closing delinquent accounts. And once you pay off your debt, it actually helps your credit score to have some open accounts, as long as you pay off the balance every month.

Phone, Write, Or Make An Appointment

As counter intuitive as it seems, making an effort to contact your lenders and come clean about your situation can work in your favor. Many lending companies have programs in place for people facing unforeseen hardships. You can get free debt counseling or even get on a payment plan with reduced payments if you don’t avoid talking to your lenders.

It’s easy to let bad credit circumstances get the best of us, but there is always opportunity to improve a bad situation. By conquering your unfortunate situation, you are better able to face challenges in finances. A bad debt can be made into a wonderful learning experience when it is handled correctly, meaning proper budgeting and responsible money management, paired with communication and honesty. Before you know if, your bad credit history will be just that-history!

This guest post is from Allison with