Times are difficult, with a slump in the economy and a lot of people in debt.  If you are one of those people, it probably feels as if your life is spinning out of control.  Not knowing how to get out from under that debt adds to the pressure of having the debt in the first place.  You feel it is necessary to do something, but you are not sure what to do first.

Control Your Finances

The first thing that you should do is to get copies of your credit reports from all three of the major credit reporting agencies (Trans Union, Equifax and Experian).  Everyone is entitled to a free copy of each one once a year.  You can request your copies by mail or you can get them on the internet at AnnualCreditReport.com.  Once you have your copies, review all of the entries on them to be sure there are no errors or that there are no debts or entries that do not belong to you.  You would be surprised how many people are affected by someone else’s bad credit.

Matt’s Note: Once I had a $275,000 mortgage with 5/3rd bank on only one of my credit reports.  I followed the advice here, called and had it removed.

If you find any errors, you must contact the credit reporting agency to register a dispute in order to get the errors corrected or have the false entries removed.  You can register a dispute by telephone, but the agency may request that you mail or fax any supporting documentation in order to support your claim.  Keep in mind that this process does take some time.  It can be from three to six weeks before all of the corrections are made.

Once your credit report corrections are confirmed, consolidate your debts.  Getting a debt consolidation loan lets you make only one payment to the financier versus multiple payments to your creditors.  In addition, you might save some money on interest rates since you will no longer be paying interest on multiple debts, but on only one that has a reasonable rate.

As you are paying off your debt consolidation loan, you will be rebuilding your credit.  Be sure that you never miss a payment or pay it late, and you will see a big improvement in your credit score.

Matt’s Note:  When me and Betsy started our debt free adventure we consolidated debt with Lending Club – read more about our debt consolidation with Lending Club.

Change Your Attitude

Now that you are taking action to pay off your debt, it is time to focus on other areas of your life.  You have to make some changes in order to improve your life, and those start with changing your attitude toward the events that occur.  It is not the events in life that affect you, but your attitude toward them.  You have to look around you and focus on the many things that you do have, not the ones you don’t have.  As long as you have your home and family you are truly blessed.

Developing a positive attitude toward life will also help you in your dealings with other people.  When you smile at them and greet them warmly, they are more positive toward you and will be more willing to communicate with you.  That is the way to start some great friendships and build a network of support in your life changes.

In addition to your positive attitude, you need to keep your goals in mind.  Make sure they are realistic and attainable, and keep working toward them.  Each time you reach one of your goals, create another and keep going.  Reaching your goals will give you the motivation to reach for what you want out of life.

Give Back

As you make changes in life, there are probably people that helped you along the way.  Perhaps a neighbor brought a food basket for you when the money got tight, or a young person did some odd jobs for you.  Those are the people that gave the most, not in monetary value but in spiritual value.  Be sure to thank them for their generosity and return the favor if you are able.

While your life continues to improve, you should help others that are less fortunate than you are.  Volunteer in your neighborhood by doing community cleanup projects, working in a mission kitchen, or visiting the people that home-bound.  Sometimes it is your time and energy that is the most valuable to others, and in helping your fellow man you give them hope.  In addition, you reap the benefit of gaining a sense of well-being.

With your financial situation improving, donate what you can to charities or to your church.  Even one dollar is one dollar more than they had, and can go a long way in providing services to the poor.  No matter what amount you give, make sure you give.  Your gifts are the backbone for charitable organizations that makes them able to give to others as well.

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Miles Williams is a creative writer, marketer, and salesman living in Northern Michigan whose passions are finance and real estate. He writes at Real Estate Marketing Stop helping real estate agents make the most out of the social movement. Miles’s small web company lovewritingmakemoney.com specializes in writing reports, articles, and ebooks for clients.