It’s so important that you understand the way that credit can affect you when you are trying to build wealth, but so many people just have no clue how it can be disastrous when not used correctly. The wrong handling of credit can impact your finances for seven years – and all lines of credit elsewhere are cut off until you pay your arrears. It’s a dangerous circle to get into, and it can have some serious consequences on your ability to borrow later on.
The worst thing to do when you’re in debt is borrow more, but it’s often what people turn to as a quick fix to their problem. They head to sites like Pigly.Com and work out their finances, and they then go ahead and get a debt consolidation loan. Of course, there is a place for these in the market, but how can you face up to your debt and manage it like an adult? Well, we’ve got a few suggestions of what you can do to tackle your debts once and for all.
- Try not to take on too much credit at a time. No one can avoid debt forever, but taking on too much of it can lead you into trouble. The limit for your credit isn’t a target for you to aim for, so slow down on your borrowing and make room for your credit to be worthwhile.
- Always negotiate the best possible deal. When you have a good credit score, use it to take advantage of the timing of your borrowing. If you have a credit file, you need to keep an eye on your score and watch it for any issues. If you want a mortgage or a credit card, you need to look for the best credit deals.
- Always pay on time. The best way to manage your debt is to make your payments on time every time. If you don’t pay your creditors on time, your score will be impacted and your creditworthiness will go down.
- Contacting your creditors may sound scary, but it’s the best thing you can do to ensure that you are continuing to make some payments. Even if you only make a nominal payment to each creditor every month, you’ll continue to pay your debts. Reducing your instalments will pay them off eventually!
- If you want to be an adult about your debt, you need to stop binning your mail and open it. Keeping your payments up to date means knowing what your payments should be in the first place. Open the mail and face the scary looking letters. You won’t regret facing things!
- Think about consolidation. It’s not the first thing to consider when you are getting out of debt, but it’s a good way to extinguish your debt quickly if you have more than one creditor to pay. Consolidating everything into one payment means you are only paying one thing each month to one place.
Being a grown up about your debt is vital for your future credit rating. It’s time to face things.