I’ve lived through several recessions and one thing I have learned is that it really is all about supply and demand. Look at your own life, the mindless things you do and realize how the theory of supply and demand affects you.

Take milk as an example . If your local grocery store is closed or runs out of stock  , you will drive to a smaller store if it is convenient. Local neighborhood markets usually are more expensive , but they rely on convenience as a way of staying in business .

The same is true with other aspects of economics , including money and credit. If money is rolling freely , then it will cost less. Interest rates will stay low when money is abundant and because of the demand for money, prices for goods like housing will be higher.

Credit operates in the same manner. If everybody wants credit, the lenders will recognize this and in an attempt to move product, aka loans, money will be easy to get and it will be cheaper .  It wasn’t that long ago when money was easy to get. Anybody, including my seven year old son , was getting offers for low interest rate credit cards . Banks were reaping huge rewards with fee hikes and late fees . This is before Congress reigned them in with the Credit Card Act.

When the economic shift occurs  , when supply and demand is out of balance , this is the time to regroup. This is the time to get real about your finances  . Time to squirrel away money and to let go of assets that are not carrying their own weight . This is also the time to work on credit report repair. If you want to take advantage of the next economic boom, you have to be ready with good credit report scores.

How To Repair Bad Credit

Bad credit and low credit scores will keep you from buying a house and it will cost you a whole bunch in terms of higher interest rates. Also, if you are financing your lifestyle with credit cards, consider that the charges you are incurring are amortized on a daily basis. Unlike a payment you make on your house or  car , credit card balances have interest charged to the balance every day .

You have to get rid of credit card debt and this may mean that you have to settle, a lump sum payment to the lender. This idea of credit card forgiveness  is nothing new and it does carry with it some penalties you may not like  .

First of all, get ready to pay taxes on any forgiven amount. Be ready  to receive a 1099 listing the forgiven amount you received as a gift. The IRS will want to see this as income and will want from you the tax percentage you normally pay.

Your credit is going to take a hit , but eliminating this debt will also increase my credit score. This is because the outstanding balance will no longer be noted on your credit report . This is both good and bad. Make sure you get copies of your credit report and follow up to see that the account is being reported properly, as settled.