Bad Credit Blues - Recovering From the Psychological Effects of Bad Credit

Bad credit affects people not only financially, but also emotionally, psychologically, and even spiritually. We are taught from a young age that people who fail to pay their debts are "losers" or "low-lifes," and thus when we get in over our heads in debt, we can't help but feel this way about ourselves. With bad credit comes shame, embarrassment, anxiety, and even depression - but it doesn't have to be this way. While people with bad credit need to work toward improving their credit standing, the first step in doing so is to develop a healthier mental attitude and some perspective.

You're Not Alone

The first thing that you need to realize is that you're not alone. There are millions of Americans who suffer from bad credit, and with the deflation of the "housing bubble" and rising interest rates, there are probably going to be a lot more in the near future. But not only are you not alone in terms of having bad credit, you are also not alone in bearing the responsibility of your debts. You are responsible for your bad credit, and you need to stand up and take responsibility - but you're not the only one responsible, and as soon as you realize this, you will be able to have a much healthier perspective on your situation.

When a creditor loans you money or extends you credit, he is taking a risk on you. But he's not doing it out of the kindness of his heart - he's doing it to make money! You are paying him interest, which is a form of compensation for his risk. He knows that a certain percentage of the people he makes loans to will not be able to pay him back, and he takes these calculations into account. Successful lenders weigh the probabilities and make more good loans than bad ones, but regardless, the lender himself has to take some responsibility - he shouldn't be able to pawn it all off on you.

A New Way of Thinking About Bad Credit

Think of it this way: Bonds are a form of lending. When an investor buys bonds, he is effectively lending his money to the company that issued the bonds. If the company is later unable to repay the investor, who is to blame? They both are. The company that went bankrupt is obviously responsible, but the investor who lent the company money weighed the risks and decided to buy the bonds - he is not "innocent" - he shouldn't have made the bad loan.

No one wants to think of themselves as a "bad loan," but this insight that lenders share responsibility with debtors is crucial to overcoming the Bad Credit Blues. In fact, the U.S. financial system is structured with this in mind. It's only recently that the powerful credit card lobby has been able to influence Congress and the media to convince us that all people with bad credit are bad people. We know this isn't true - and if you're suffering from bad credit, you need to realize this for yourself, as well.

Taking Responsibility and Fixing Your Bad Credit

Of course, this doesn't mean that you bear no responsibility - just that you don't bear 100% of it. Unless you committed fraud or knowingly took out loans that you had no intention of paying back, you've done nothing morally wrong and have no reason to feel guilty. Creditors can sense guilt from 1,000 miles away, and they will use your guilt as a weapon against you - don't let them.

Instead, you need to work with your creditors to fix your bad credit. This can be done either through working directly with them, or using a debt management or debt consolidation service - whatever is appropriate for your individual circumstances. Use the resources provided by Debt Relief USA to take the first step, and you can say bye-bye to the Bad Credit Blues once and for all.

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