Is your debt really getting to you physically and mentally? Are those creditors calling at all hours of the day, and are they even resorting to calling your job and family members? Are you desperate for debt management? Don’t worry. Debt management isn’t as hard as you think. Unless you have no source of income or you are living way above your means and you refuse to come down, you can get out of debt simply by doing a few calculations and doing a little life changing.
Get Your Credit Reports
Before you begin your debt management program, get a copy of your credit report. You have three credit reports from three different credit reporting agencies. They are Trans Union, Equifax and Experian. Not every company reports your information to every company and some report to two and some all three. So you really don’t know what your credit is really like until you obtain copies of all three of your reports. You are entitled to one free credit report from each agency once per year. You should make this a habit so that you always know where you stand credit wise. Once you have all three credit reports in front of you, you can begin creating your debt management program.
Read The Report Carefully
Look over your three credit reports and see if all of the information is correct. Be honest with yourself. If you see a charge and you kind of know where it came from, that’s probably where it came from. However, if you have a charge from a company you’ve never heard of and you don’t recognize that charge at all; dispute it immediately. You can send in a written request to have your credit report amended or you can do it online. You’d be amazed at how much you can raise your score, and lower the amount of debt you have, simply by disputing various information. You should also check to see that all your personal information is correct to make sure no identity theft and/or mistaken identity has occurred or will occur. You don’t want to carry someone else’s debt after all, do you?
Once you have your corrected reports, add up everything you owe and write that number down. That’s how much money you’re going to set your debt management goal at. Then, add up all your income for a month. Then, take all your bills. Count your car note, your insurance bill, your electric bill, your food budget, and even your miscellaneous budget. Add up any money you spend any given month. What you have left over is what you are to use for debt management. Pay off the small amounts first and then start on the big ones. Even if you pay a little bit each month, the companies will report that you are making payments and that will raise your credit score gradually.
Savings
Some ask if debt management is more important than saving? Well you have to realize that you’re likely paying interest on much of that debt. If your interest rates that you’re paying on are more than you receive in interest from any savings account, it’s wiser to pay off your debt than to save your money and go further into debt anyways.
