Credit And Debt Tips

If there’s one thing I am skeptical about, it’s the management of my money. I can’t trust any average joe with the responsibility of getting me to where I need to be financially. No, it’s really my responsibility to navigate my financial ship.

The same holds true for dealing with any debt I may have. While I could perform the steps myself, I might find it easier to look for services to reduce my debt. This can save time and frustration on my part, but many might ask, “What should I look for when using a debt reduction service?” “Should I get secured debt counseling first?”

In this article I want to give a few tips for choosing the company.

Tip #1 – Time

It’s important for me to get out of debt, but it’s also important to me to get out of debt quickly. When hiring a company I want to know how long the process will be and how soon I can expect to see results.

This can be very important because you don’t just want to pay for any kind of service. If you pay for top notch service then you should get top notch results. The purpose is to get out of debt. Not to get further into debt with another company even if it’s a debt reduction service. Which brings us to our next tip…

Tip #2 – Cost Involved

You will also want to know what a company charges up front for the service they provide. You don’t want any hidden fees to jump out at you later on during the process. Get it out in the open and let it be perfectly clear what you are getting when you plunk your hard earned cash down.

If you don’t feel the service justifies the cost then you can try negotiating, but if the company won’t move just go to another debt reduction service.

Tip #3 – Get A Guarantee

I don’t think I need to go into to this a whole lot, but don’t give your money to anyone if they cannot guarantee that you’ll see favourable results. If they cannot guarantee deleted items on your credit reports, or stopping creditors from harrassing you then save your money. Also make sure that you get the guarantee in writing should there be any problems down the road.

As with any debt, you may find yourself getting totally frustrated with the situation. But I know that most students who have taken out loans for school probably feel it the most.

“Why didn’t I just skip college?”

Well it might not be that serious, but the effects of debt is. Couple that with interest rates and it can seem like you’ll be paying for school forever.

Now there’s a lesson for you!

While we can get mad and frustrated about our student loans, the best things is for us to step up and take action. One of the best ways to do this is to do student loan debt consolidation.

What is student loan debt consolidation?

It’s plainly the process of cutting your student loans into a manageable process. In some cases you can cut your payments by 45% a month. Some other companies will even offer to help lower the interest rates on your loans.

If you find yourself struggling to pay student loans then this could prove to be a big help. You can get a manageable payment and get some peace of mind.

How to consolidate your student loans:

The process is fairly easy. You can use some online resources to search out companies who handle this process. Before you commit to any one company make sure to take out a sheet of paper. Contact a few companies and write down the benefits for each company before making your final decision.

After you have done so review the paper and determine which one best fits YOUR situation. From there choose the company and get started.

Also it doesn’t hurt to try and negotiate a settlement for your student loan.

When you are dealing with debt there will be two types of debt. Secured debts and unsecured debts. Secured debts are debts that have been backed by something such as a house or a car. If a person fails to pay the loan then whatever was securing the debt can be repossessed.

Unsecured debts are debts that are borrowed on a line of credit such as a credit card or student loan. You will not have to get secured debt counseling for a student loan, but should rather look into student loan debt consolidation for that matter.

There is one shocking truth that you might not be aware of and this should greatly affect your decision as to whether or not seek counseling for any secured debt you may have.

In some cases a debt counseling agency is actually formed by your creditors so really what this can become is just another form of debt recovery for your creditors. They will work with you to pay the debts back in 5-6 years as well as consolidate everything into one monthly payment. They will also help to lower interest rates as well.

While this can seem appealing you might want to consider another alternative which is debt settlement. Sometimes with debt settlement you can pay your debt back for 40% to 60% less than what you owe without going the route of bankruptcy.

In any case you will definitely want to do your due diligence before going with any debt management service. As in any industry, there will be legitimate companies, but there will also be a ton of scam artists that you have to steer clear of.

We all know that debt is bad. Whether is past due loans, payday advances that are out of control, or even just owing a friend, the truth is having unmanaged debt can put quite a strain on anybody.

While there are a ton of ways to approach getting out of debt, this article wants to offer 3 simple, but powerful tactics on how to get out of debt and take control of your financial situation again.

Ready? Ok. Here we go!

Step 1 – Get a Plan

I know this might seem obvious, but have you done it? When I say get a plan I mean that you need a solid get out of debt plan . This plan needs to be written down where it can be seen by yourself (and a spouse if necessary).

Failure to do this can lead to a mountain of trouble. Plans are like roadmaps. They help us to navigate to a certain destination. If you don’t decide to get a plan together for getting out of debt then how will you know you are making progress? Don’t put it off any longer. It’s true what they say…

Failing to plan is planning to fail. Even when it comes to debt.

Step 2 – Try to work out a settlement with your creditors

If there’s one thing I always do it’s try to work out a settlement amount with any past due debts I have had. What most people don’t know is when you have a credit card that gets closed, most times that debt is bought by someone else.

Well that debt is then sold to that creditor for pennies on the dollar, but guess what? You can play hardball and offer to give them way less for the debt than you originally owe. Now this might seem a bit crossing the line, but I tell them that I only want to pay a certain amount.

If they fail to agree then I don’t budge. If they say they’ll report it to the credit bureau I just respond by telling them I’ll pay to have it removed until they agree with my terms. Sometimes having a large sum of cash can help in the negotiation.

Step 3 – Pay more than the minimum balance

If you are the type of person that pays the minimum balance every month on any existing credit cards then the credit card companies are going to love you. Why? Because this is how they make their money.

If you only knew how much paying the minimum balance was really costing you then you might have a heart attack. (just kidding)

You may find yourself in a very tight position right now with all kinds of debt piled up in your life. This can be overwhelming and down right stressful. You know that you need help, but you just don’t know where to go to find out how to get out of debt .

If you really want to alleviate the financial pressures that debt brings then do yourself a big favor.

First you need to develop a get out of debt plan .

You have a few choices when it comes to a plan to reduce debt.

A. Instead of trying to handle everything yourself you might want to use experienced services to reduce debt.

B. If your debt comes from paying for college then you might want to consider doing student loan debt consolidation.

C. Get top notch info from money management organizations that provide secured debt counseling .

Whatever option you choose don’t forget that just getting rid of debt is not always the total solution. Sometimes we need to deal with the symptoms of why we got into debt in the first place.

If we learn to control our spending habits, live on a budget, and make wise monetary choices then we can get out of debt and stay out.

When putting together a get out of debt plan you will probably need a few things at your disposal.

Some of those things are your credit reports, your monthly household expenses, and your current income levels. Having these on hand will help you to navigate through the current situation and develop a solid plan for getting out of debt.

If this seems to hard for you then you can always use services to reduce debt.

Okay, first before writing your plan you will need to assess where you are. You should bring all of your income to the table to see how much you have left over after paying your monthly expenditures. Now since we will be working to get out of debt that might mean giving up a few “necessities”.

The necessities I am referring to are not food and lights, but maybe cable TV or at least downgrading your package. Remember that we want to get out of debt so we can truly afford the nicer things we want without the stress.

Next you will need to get a copy of your credit reports. Having these available will let you know which creditors have charges against you. You will also be able to get their contact information so you can possibly work out a settlement with them.

Having updated information on your credit report can be a big help. Just by clearing these things up can save you money on car loans, and mortgage loans.

Finally you’ll need to have a written budget. This is so you can see where you are spending money at every month. This is can help to plug a leak in your finances that you might not have caught other wise.

Once you have all that information in place you will then want to see where any extra income is. The easiest way is to focus on the smaller debts and and apply the extra income to those debts. Once you have paid those debts then take the payments from the small debt and the extra income and apply it to the next debt.

For example if I have an extra $100 a month then I would pay my debt in this order:

1. Mortgage $150000
2. Car $40000
3. Credit Card $20000
4. Student Loan $10000

I would keep paying all my bills, but I would apply the extra $100 to the student loan payment. Once that is paid then I would apply the payment from the student loan PLUS the extra $100 to the credit card and so on.

This is referred to as snowballing the debt payments which can be very powerful.