Credit score repair and debt management for single mothers

Single mothers are more likely than two-parent couples to face debt, lower credit scores, and bankruptcy. In 2006, the National Bureau of Economic Research reported that single-mother households were overwhelmingly likely to face poverty. About 83 percent of single-parent homes are headed by women, and of all single-parent homes, around 40 percent were in poverty. Between housing payments, utility bills, food, clothing, and childcare, single mothers can find themselves strapped for cash, as they struggle to recover their credit scores and evade declaring bankruptcy.

If you are a single mother in a bad financial situation, your first step is to seek a financial counseling program. If your situation is not dire, embarking upon a debt management plan might be the best choice for you. You might wish to supplement this step with online credit counseling, too. If your financial situation is grim, you might wish to enroll in bankruptcy counseling, to decide if you need to declare bankruptcy. In the meantime, it's essential that you manage your credit score today. How can you do this, though?

Timely bill payments fix a credit score, help with debt management

You can only repair your credit score if you make regular, monthly payments on your bills, including student loans, utility bills, and credit card debts. The rationale behind this, according to Credit.com, is that regular monthly payments have a positive effect on your credit score, while late or missed payments ruin your credit score. The site also mentions that the effort of make most of your payments on time will salvage you financially from the occasions when you must miss payments.

The blog Single Mother Resources states that if your debt-to-income ratio exceeds 20 percent, you are likely to have a debt problem. This is the point at which you can turn to your debt management plan to see where you can cut back on spending. Remember: Items like organic food, designer clothing, and even entertainment splurges like new albums or DVDs are NOT necessities. Basic, decent clothing, food, and housing for yourself and your children, however, are fundamentally necessary to the well-being of your entire family. It is best to begin repairing your credit score and take steps away from bankruptcy by eliminating non-essential spending from your budget.

Many single, working mothers simply cannot afford to make timely monthly payments without financial assistance. Lowering your rent and bill payments can help you tremendously in getting on strong financial footing. You might wish to apply for Section 8 housing vouchers. The U.S. Department of Housing and Urban Development (HUD), www.hud.gov, has a wealth of resources about assisted housing applications and income limits. The Low-Income Home Energy Assistance Program, www.liheap.org, has programs for families in need of help to reduce utility bill costs, too. You might also be eligible for an ACCESS card – which can be used to purchase food and some goods, such as Payless-brand shoes – or Temporary Assistance for Needy Families, TANF. Check with your local Department of Human services (DHS) for more information, or to determine if you qualify.

Have fun with the kids on a debt management or credit counseling plan

At Advantage CCS, we realize that cutting out all fun from your life is not a realistic means of debt management and credit score repair. You and the kids can still have fun, for low or no cost. Take the kids to a museum (many museums have admission fees that are actually “suggested donations” and can thus be waived) or to a free-to-the-public art gallery (there are many in the Chelsea neighborhood of Manhattan, NY, for example). Or, how about a walk in the park? The whole family will benefit from exercise and mental stimulation, and you won't rack up credit card debt in the process.

he library is another wonderful haven of entertainment for people of all ages – from 2 to 92. Your kids can check out books, videos, music CDs, and sometimes, even toys. Many cities, such as Pittsburgh, PA, have toy lending libraries where kids can try out new toys all of the time -- and you won't have to spend a cent. Many places also hold toy swaps. Simply donate an item or two that your child has grown tired of, and take home a new play-thing or three in return. Or, how about family story-telling time? If you use your imagination, your kids will never be bored, and you'll never be bankrupt.