If you find yourself getting behind on your bills and being buried under debt, you might need to find a debt management system that works for you. There are several debt management programs available that could help you get out of debt, with a minimum fee or in some cases, you could consolidate your debt free of charge and payoff your debts with a smaller monthly payment and less interests on your debt. It also requires financial planning and making assessments about your financial health.
This blog will guide you through a debt management process and we will introduce you to a system which will allow you to:
- access your credits score
- consolidate your debts
- lower your monthly payments, and eventually
- Get out of debt.
Getting your credit score
Your credit score plays an important role when it comes to being approved for a credit line, whether you are buying from a store with store credit or buying a car from an auto dealer. Lenders will always look at your credit score to determine what risk levels are involved when they lend you money. A good credit score will also encourage other lenders to compete and offer you better rates and payment options.
Why check your credit score?
Since your lender gets an overview of your financial health and makes an assessment of how much potential risk is involved when they lend money to you, you should always check your credit score and make an effort to increase your credit score by taking care of some of your creditors. A credit score and your credit history give a clear picture to your creditors about your bill payment habits, and your financial standing, and it shows how likely you are to pay your debts back on time.
Your credit history and your future
Your credit history and credit score shows how worthy you are of credits. So the new lenders will also look into your history to determine your credit limits and interest rates on new credits. Having a perfect credit score and credit history will allow you to receive more credit more easily with lower interest rates. Any lender or service provider, such as banks, auto dealers, insurance companies, cellular phone companies, your utility companies, and so on, will look into your credit history before making a deal with you.
Three major credit Bureaus
You may get a copy of your credit history directly from one of the sites listed below.
Major credit reporting agencies and sites
You may obtain a copy of your credit history from one of the companies listed above for free or for a small fee. You should always compare your credit scores and make sure that all information they have is accurate. If you find any discrepancies, don’t hesitate to investigate and correct your records. You should always monitor your own credit history and ensure that all information contained in your credit record is accurate. For example, if you have recently made payments and it doesn’t appear on your credit history, or if someone with a same name appears to be added under your credit history, you should always dispute incorrect information that appears on your credit report and correct and update the information without delay.
What your credit history contains
Your credit history will have records of your financial dealing with credit. It will show your income, credit line, address changes, and what companies you owe money to. It will also contain the list of credit cards you own, their credit limits and the money you pay on them. Other loans such as student loans, car loans, and mortgages will also show on your credit history. A creditor or potential lender will be able to tell the amount of money you already owe and how efficient you are at paying back your debts.
Chose a Debt Management Program online
Debt management, or DMP, is for those who are in serious trouble with debt and need a plan to get out of debt. A credit counseling company usually negotiates with your creditor and makes a payment plan which is bearable for you so that you may get out of debt gradually. They also help you to freeze, waive or reduce your monthly payments, fees or interests on your credit. The debt management company allows you to pay one small monthly payment to them and they take care of your creditors. There is usually an 8-11% administration fee involved.
It is important that you choose your DMP carefully because there are several companies who take advantage of individuals who are already in financial trouble. If you fall into the wrong hands, you might end up being in a worse situating than you were before.
Things to remember when you use a DMP
- Get your payment plan in writing
- Make sure you are able to pay the minimum DMP payments
- Make all your payments on time
- Make sure your creditors agree on your DMP plan
- Verify that your creditors are being paid on time
- Check your credit card statement and credit history regularly
- Do not get into more debt
- keep copies of your statement
To keep up with your finances and bills, you should always keep records of your payment, compare copies of your bills with your bank statement and credit card or other loan statements to see if they reflect the payments you have made. Also check with the monthly statement you receive from your DMP. Here is a site that you can go to and compare several DMP companies in the nation and choose the one you may find suitable for you. Debt Consolidation Review
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