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To create a grunge text effect in Photoshop, add text, scale it up, choose a font like Compactor Pop, and center it. Then, apply a rust texture, desaturate it, adjust levels for contrast, and paste it onto the text. Resize and use a clipping mask for texture adjustments. Repeat for more texture and add a threshold adjustment layer for maximum contrast. Fix background color by changing the blending mode to Screen. Group layers, name the group, and add a background color.
