The Fair Isaac Corp. created the FICO score used by lenders. Your FICO score is compiled from data from the credit-reporting bureaus TransUnion and Equifax and is based upon your payment record, credit history and outstanding debts. Your use of credit cards is also monitored. Your FICO score ranges from 300 to 850. Scores above 700 are good, while scores below 600 are considered to present a risk to lenders. Your FICO score is used by most lenders to assess suitability for credit. It’s easy to obtain your FICO score, although it is not free.

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     Go online to obtain your FICO score used by lenders. The process is fast and simple, and you can view your score instantly. Go to the MyFICO.com website (see Resources). Click “Get FICO Score.” Check the boxes to get your score from TransUnion, Equifax or both. Individual scores are $15.95, or $30.90 for both, as of 2010.

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Prepaid credit cards are accounts that help younger adults build and manage credit without the risk of debt. Prepaid credit card companies set up a separate savings account--the balance in the account determines the credit line on the account. Just like some unsecured credit cards, prepaid credit cards can be customized. This process is relatively simple (and fun!) once you find a participating company.

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     Research companies that participate in customized, prepaid credit card programs. This is relatively easy. Some participating companies include CitiGroup and PayJr. Most of these companies offer customization services online.

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Having a bankruptcy on your credit report, can have a negative impact on your life. It can be difficult (in some cases even impossible) to obtain a home or auto loan for years after filing for bankruptcy. You might be denied a job if you have filed for bankruptcy. It is quite possible that you will pay higher car insurance premiums. When you are able to start receiving loans and credit cards again, you will be charged high interest rates. This is why it is important to work to avoid bankruptcy. Avoiding bankruptcy alone is not enough. You must find the right ways for your situation to avoid bankruptcy.

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You have found yourself drowning in debt. You have financially over extended yourself. You have credit card companies calling you and sending you letters. You are barely making ends meet. You are facing bankruptcy and this is not the route that you want to go because bankruptcy will follow you for the next 10 years of your life. How to avoid bankruptcy is now your challenge

1. Get Organized

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     Write down all your debts. Get a pen and paper, sit down and look at everything you owe during a month's time. You have to compare what you owe each month to what you earn each month. Write a strict budget and have the determination to stick to it.

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