Take control of your debts and become debt free
Date: Mon, 02/06/2006 - 13:45
Take control of your debt related problems. You can use the following tips to pay all your debts and regain control of your financial identity.
- You need to make a list of all the debts that you owe. Put them in order with the largest amount first. Besides each amount, list the minimum amount of this debt and the rate of interest charged on this account. You will be able to understand the actual standing of all your debt accounts.
- Now, you will have to understand which account requires payment first. You can either opt to pay those accounts that have small balances or you can pay the account with the highest interest rates. You can use your money proportionately towards all your accounts. After one account gets cleared, you can use that portion of money to pay the next account. Don't use that money for other purpose. Use that money exclusively for paying your debts only. If possible, try increasing the payments towards your accounts. This will make you come out earlier from all your debts.
- After you have paid off the account, you can choose to close the account permanently. If you have large number of credit accounts, you might always get tempted to get into credit again. Do not use your cards to roll balances from one card to the other. These have specific drawbacks in front of your lenders and the line of credit is appearing in your credit file.
- Your credit report reflects your actual financial identity. Pull a latest copy of your credit report and see that the payments you made towards the accounts have been posted correctly in your file. Some errors in your credit file may not allow your credit scores to increase. So you have to review your report regularly. You will get a free copy of your credit report if you have been turned down for credit.
- Make a spending plan and always stick to it. Keep a track of all the income and expenditures. It is better to use a debit card instead of credit card because you will be using your own money instead of the money borrowed.
- It will be good if you are able to take control of your credit problems at the right time. Spending is a habit that can ruin your financial identity. And in some cases, people go out of control if they are hit with unavoidable situations like medical bills, loss of job or a divorce
Do not let your situation go farther beyond control. If required, take help from professionals. Talk with credit counselors on a private basis. The consultant will call your creditors and arrange for lower payments and lower interest rates. Your credit file will not go out of shape and you will be able to work your way out of debt and towards a bright future.
Wow John, this is really a great post and good advice!!!!! This
Wow John, this is really a great post and good advice!!!!! This is something that we ALL can use! Thanks for posting it~ shirley
Wow Shirley! This thread went out of my mind. Thanks for picking
Wow Shirley! This thread went out of my mind. Thanks for picking it out. :D
Actually, after reading so many concerns here, I found that a lot of people have difficulties in paying their bills. They lack the systematic budgeting system because of which they fall in turmoil. They think of taking a new loan to pay off the past accounts and that is the reason, many companies are marketing their loan services to help. People do not realize that they are just adding up their problems and the companies won't give them variety of options during their financial crisis.
The most common group assuring fast help to the needy people are the abusive and the predatory lenders. Contacts are made through telemarketing, door-to-door solicitations or the mail. Some of the companies even advertise their deals in the late night shows that sound appealing. Remember, the company won't advertise the risky things in the TV. They are selling their product and want it show it in the most attractive way. People having sleepless nights are their easiest catch.
These lenders take the advantage of the people in difficult financial situations. They offer home equity loans with high interest rates and fees. Sometimes, they sell the package by fixing low monthly payments with a large balloon payment at the end of the loan period with numerous hidden charges.
Not having the sound knowledge, people also fall victim to the high closing costs and other fees such as loan origination, broker, transaction and closing costs. The most risky thing that happens is that when a lender is pressurizing the person to borrow more money than needed. He is already in financial trouble and this bad decision can make the situation worse.
People need to realize that a bad decision can make the hard times worse. Try best to solve the situations on your own. If you can't manage it, take that help that suits to you. Don't accept anything that comes in your way. You won't be able to figure out which is the beneficial one.