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If you have a bad credit score and history you may be wondering how you can borrow money when you need it. This may be especially true if you are improving the way you handle your money but haven’t been able to build a good credit score.

Step 1: Get Your Personal Finances Under Control

First, you will need to create a budget that outlines all money coming in and going out. Figure out where you can cut unnecessary items from your spending and where you can save on necessities. Apply all extra money to paying down current debt.

Step 2: Pay Off Smallest Credit Card Balances First and Snowball Payments

If credit card debt keeps dragging you down, cut up your credit cards so that you don’t use them anymore. Buy items with cash only which forces you to stay within a certain amount. Evaluate every purchase to see if it is really necessary at this time.

If you have multiple credit cards, pay the minimum balance on all of them, but pay as much as you can on the one with the smallest balance. You will pay it off quicker which will raise your credit score, and once it’s paid off, snowball that amount into the payment for the next lowest balance. Seeing a balance paid off will also give you incentive to keep going.

Step 3: Consider A Guaranteed Loan

If you are ready to take on necessary debt for a business or home purchase, consider if you can really afford the monthly payments. If so, consider whether you have a friend or family member who will co-sign the loan for you. If you default, they are responsible to repay the loan however, so consider carefully whether you are capable of this venture.

Step 4: Consider Credit Building Cards

These cards allow you to borrow smaller amounts of money and repay them faithfully to build good credit scores. The amount you can borrow goes up as you prove yourself faithful at repaying what you have borrowed. This may be an excellent way to dig out of the bad credit hole.

Bottom Line: You can get your finances under control and rebuild your credit. It will take work and sacrifice, but in the end it will be worth it.