Yes, there is good and bad debt relatively speaking and you need to appreciate the difference between the two in order to reduce debt and build credit. Good debt is “investment debt” so that when you borrow money, you expect to make money on the borrowed funds. What are examples of good debt? Home mortgages, loan for a college education,[Read More…]
Use student loans only to pay for college that you cannot afford to pay for right now. Using student loan money as if it were cash income will come back to haunt you later and impact you for years. Need income? Get a job!
While you may need to cut costs in order to see you through your debt crisis, don’t be penny wise and dollar foolish by not having adequate insurance for both your property and yourself. Without the right insurance, you have a disaster waiting to happen.
Create a paper file and keep it in a safe place of all of your important documents.
Create a long-term financial plan and include where you want to be in a year, five years, 20 years. Things happen to change the best laid plans, but you need a plan to begin with and then adjust it as the reality changes.
If you have been getting those promotion checks in the mail that offer you low or no interest rate charges on sums that you transfer within a specific period of time, consider them, but remember, they are not without risk or impact on your credit score. Plus they can cost a little money to make the transfer, even if the[Read More…]
Going shopping is an easy way to throw you off your best laid plans for getting out of debt. If shopping is a hobby of yours, find a new past time that doesn’t cost so much money.
If you are older and drowning in debt and have whole life insurance, consider cashing in the policy or the the cash-value portion of it to get that big debt paid off to give you financial peace of mind.
If you have managed to stay current on the balances you owe, check with your lenders to determine if there are lower interest rate loans available to you. Refinancing can be a dramatic way to lower your monthly costs and get loans paid off more quickly.
Find cheaper everything including your apartment, car, insurance, the works! In desperate situations, move back home, if they will take you! It will amaze you on how much money you can save. An important example is commuting to the job. Unless you work in jogging distance from your home, commuting adds up to a considerable expense for most of us.[Read More…]
There are generally five ways for you to consider getting out of debt including: Debt Consolidation Debt Management Bankruptcy Debt Settlement Use a Combination of Approaches There are pros and cons to each that you must carefully consider with the help of a qualified financial and legal professional
Call all of the banks and lending institutions with which you deal and simply ask them for lower interest rates on your accounts. Say that you have been a loyal customer for X years, always paid your bills on time and you want a lower interest rate. You could cut your interest charges by hundreds of dollars a month and[Read More…]
Pick out your lowest interest most rewarding one or two credit cards and retire the rest to a place near your financial records. Don’t destroy or close these credit card accounts because that will impact your credit score, but do put the away.
If you are fast and free with your money, you need to changing your spending habits. Anytime you are tempted to spend money, ask yourself this: Can I afford this purchase without putting it on a credit card? If the answer is no, then you can’t afford it.
If they are true friends, they will stick with you, even if you cannot follow them to expensive restaurants and weekend getaways. If you can no longer (or never could) afford the lifestyle of the rich and famous, you need to quite it and find new friends and new pursuits.
They say that success leaves footprints. So do high-credit people. Here’s what they do starting young that you can begin to implement today: 1. Create a budget to live on. 2. Create a financial plan to prosper on. 3. Save money. Open an ’emergency fund’ and a ‘retirement account’ today, even if you are only putting in $5. 4. If[Read More…]
Sometimes debt can throw you for a loop and cause you to make more mistakes, which worsens the situation you are in. Some of those are: 1. Going without insurance as a way to save money. 2. Fudging tax returns. 3. Making decisions based on fear rather than rational thinking. 4. Failing to create a budget. 5. Failing to implement[Read More…]
Sell two classes of “stuff” that you have and use that money to pay off creditors. The first group are expensive items, expensive presents you bought for yourself. Sell them and use the proceeds to pay down debt; the second class are items, while not of great value, continue to cost you money, like the sailboat with mooring privileges at[Read More…]
Here is a good, practical way to pay down debt. If you have five credit cards or loans that you must pay each month, pay the minimum on four of them and aggressively go after the fifth one putting just as much money as you can to pay off that account. When that is paid off, go after the next[Read More…]
Once you have all of your debts listed, write down 20 options for paying off part or all of your debt. Write quickly. Do not judge what you are writing or how realistic the idea is, just write it down and then go to the next and then the next. Once you have 20 ideas on paper, go for another[Read More…]
Why should you take full responsibility for your debt if it wasn’t your fault to begin with? Taking full responsibility is empowering for you. If you take full responsibility for the situation you are in, then you have the power to get out of that situation. Don’t blame it on the credit markets or the recession or your alcoholic significant[Read More…]
Where to get a credit score, preferably free-of-charge? Under the law, you are entitled to get a free credit report annually from each of the three big credit reporting companies…Transunion, Equifax and Experian. There is no such law, however, that guarantees that you get a free credit score. You can buy your credit scores from each of the above-mentioned companies.[Read More…]
How to pay off debt fast is integral to build credit. But before you can create a plan on how to pay off debt quickly, you need to fully understand the scope of your debt. Begin by creating a table, similar to the one below in which you will add all of your debt, all of the money you owe[Read More…]
If, after reading the above sections, if you see red flags waving or if you have tripped off a few alarms, stop spending money on all optional items now! What’s optional? • Housing That Is Unaffordable • Cable TV • Alcohol • Cigarettes and booze • Illegal Drugs • New Car Payments • Dining Out • Gym Memberships • Expensive[Read More…]
Do you know what your debt-to-income (DTI) ratio is? Your debt-to-income ratio is the amount of your total debt you are carrying in monthly payments divided by your gross income. The equation looks like this: Total Debt/Gross Income X 100 = Debt-to-Income Ratio If you make $5,000 a month and have $1,000 in debt payments, your DTI is: $1000/$5000 X[Read More…]
We mentioned above about continually dipping into your home equity line of credit to pay current expenses. If you have a home equity line of credit, monitor it closely for red flags that you are heading into deep, long-term debt. Here are red flags to watch for: 1. You are using more and more of the line of credit each[Read More…]
Using credit cards to pay ordinary expenses and not paying off the credit card at the end of the month. We all use credit cards to pay ordinary expenses and that’s fine, but the difference between doing that and having the red flags waving is not paying off the bills at the end of the month. If at the end[Read More…]
How much debt do you have? Sometimes it is hard for us to admit and actions often speak louder than words. You may not admit to having too much debt, but are the air raid sirens of debt going off? Are the red flags of debt madly waving? When the debt sirens go off, we can all hear them because[Read More…]
The business line of credit account is one form of credit that you absolutely need if you have been in business for awhile. The business line of credit in its simplest form is a line of credit you establish at a bank, usually between $5,000 and $250,000 that you can tap into — anytime! — by check or credit card[Read More…]
Build business credit in a manner similar to building your personal credit, which is by opening bank accounts, signing up for credit cards and, when possible, taking out loans and paying them back on time to show that your business is creditworthy. Here are 10 tips to help you build business credit. Build Business Credit 1. Pay all of your[Read More…]