debt counseling

Improving Your Credit Makes Life Easier

September 17, 2015 by penn

A healthy credit profile is something we would all love to have. How we handle our finances determines our credit worthiness and little financial mistakes and lapses can snowball into major problems.

Improving your credit record becomes harder the longer you leave it.

It’s nasty to get an “Overdue” notice in the mail. Even nastier being added to a “slow payer” or “credit risk” list. Too many small lapses in your financial life can build up and cause huge problems when you least expect them.

How about this: You decide to open a small business. It’s all going to plan when suddenly the landlord is not prepared to rent his shop to you. Big shock! How could this happen?

The landlord has done a background check; you have no outstanding payments, but your name is on one or two lists and you look too risky to deal with.

Can You Improve Your Credit Record?

Even if it’s good, it’s wise to improve your credit as much as possible.

If it’s bad, how easy is it to fix your credit record? A bad credit rating can be fixed, but it may take a while. Keep in mind, people want to do business with you, but the only way they can know if you are a good person to work with is by looking at your track record – your credit profile.

Improving Your Credit – Five Rules to Live by

If you find yourself with a failing credit record, these pointers will help you on the road to recovery and get you onto solid ground.

A vital key to creating a strong credit record is having the right attitude to money: You have to earn it, manage it and eventually make it work for you.

Here are five keys to getting out of debt and improving you credit score.

Don’t be a Sucker – Live within Your Means

Advertising people work very hard to convince us that we deserve to live like rock stars. The hard fact is, very few can afford it and even rock stars go broke.

Do everything in your power to spend less than your income each month.

Tough budgeting is key. Be realistic and be honest. Plan your spending, factor in a specific percentage for savings (there will always be contingencies and emergencies) and then make your budget work.

Get a Second Job

If, at the end of your budgeting exercise, it’s clear that you just cannot repay your debts and meet your obligations on time and in full with what you earn, look for ways to make extra income. In short, get a second job.

Beyond your immediate dilemma, taking a second job will help make you partly retrenchment proof and make having an extra income stream a habit.

Never be Late with a Payment

Discipline is essential to getting back on your feet. One of the best ways to stay on track is to make all your payments on time. You may be tempted to hang on to your hard earned money for a few days – don’t. It’s not really yours and missed or late payments were probably part of the initial problem. This is also one of the critical areas in improving your credit score.

Part of your budgeting exercise was knowing who needed to be paid how much and by when. Use this list as a monthly guide to ensure that all your obligations have been met in full and on time.

Communication is the Glue

When you have completed your budgeting exercise, one of the most powerful things you can do is communicate. Your creditors and your bank manager all know that you are in financial difficulty, but they also need to know what you are doing about it.

Letting them know that you are committed to sorting out your affairs will keep them in the loop and be a big help in keeping you on track. Arrange meetings with them and show them your plan. If there are some commitments that you quite simply cannot meet in full each month, negotiate a smaller payment over a longer period.

If your creditors think you are ignoring your problems they will hand you over to the debt collectors – you will pay for the pleasure.

Get Professional Help

If your financial situation has been deteriorating over a long time, or you have debts that are pushing you to financial ruin you may not be able fix the situation alone. This is not a good time to panic. Get professional help from an institution like the ACCC

Getting back on your feet has to come before you work on improving your credit rating. Highly qualified debt counsellors are available to help you structure your recovery. Again communication is key to arriving at a workable plan.

Grappling with the Emotional Side Effects of Debt

February 2, 2015 by penn

We’re all well aware of the most common outcomes of debt from the constant loan rejections, incessant calls from bill collectors and the never-ending stack of late bills and fees that rack up. When you’re experiencing these annoyances in the moment, it’s hard to feel like they’ll ever come to an end. You might not realize it as you move through life, but you’re more than likely dealing with a lot of emotional baggage that you haven’t even begun to think about. The emotional side effects of debt are with you all the time and they could be the cause of a lot of different issues. Sure, owing someone a sizable amount of money is very tough to wrap one’s head around, but you might not even realize the fear and helplessness that’s plaguing you while you live it. Not only is your debt and the emotions tied to it a problem, but you have all kinds of other things going on in your life that only add to the overall pressure you have to work through on a daily basis. You have to be aware of the emotional side effects of debt tolearn the best ways to deal with your emotions.

The Unbearable Stress

The American Psychological Association conducted a study in 2014 that proved that the most common reasons for American adults to stress is because of money woes and pressures at work and when you really look at it, job pressures might ultimately boil down to problems that involve money or fears of not having enough due to losing a job. Now you might be asking: how is debt related to all this? Well, whenever someone has a feeling that they might be falling or pushing themselves “into the red” or negative financial territory, heightened negative emotions come into play. These feelings are more than certain to be stress-inducing and if there’s no plan or forethought in place, you might be liable to buckle under all the burdens.

Not only are the mental implications of stress a lot to handle, but the physical ramifications can weaken the immune system and make you susceptible to all kinds of illness and disease. Stress is one of the biggest causes for disarray in the body and this is one of those emotional side effects of debt that can be potentially deadly.

How you can fix it: Stress usually comes into play when you can’t seem to properly grasp the gravity of a situation at hand. When you can’t think clearly, it’s easy to imagine the worst and wrap yourself up in the illusion. Denial won’t get you anywhere, and it’s important to go after the help that you need when you need it. Know exactly what you need to pay back to get off on the right foot.

The Crippling Fear

Fear can take shape in many different forms but it comes into play most often when you feel that you’ve lost control or you can’t see what’s coming to you in the future time. Almost all kinds of debt become debt for the fact that you’ve done some things to make it so, but watching yourself slip further into the hole with no idea about what’s on the way can be extremely frightening. Fear is one of the emotional side effects of debt that can guide our thinking and decision-making in harmful ways and make us react with unsafe and ill-advised actions. It’s also been hinted that fear could be a big part of the reason that we make financial decisions that aren’t the wisest.

How you can fix it: You can’t do much about the amount of money you owe once the dollars have been spent, but you can place your focus on the range of time that you foresee erasing your debt. Putting a positive spin on your thoughts will push fear farther back in your mind which will make your situation easier to handle.

The Painful Regret

We usually try to forget about most of the decisions that we choose to make that aren’t the smartest. If debt is the problem though, thoughts of regret usually tend to hang around longer than we would like them to. Every time we have to make another payment, all we can think about is the fact that we should have never put ourselves in such a situation. Of course there are some kinds of debts that don’t necessarily qualify as mistakes, but if yours is a mistake, it doesn’t take much to get down on yourself about it.

How to fix it: The only way you’ll ever get over it is by sitting with those feelings and learning from your mistakes. Taking action to ensure that you don’t do the same things again in the future is key.

The emotional side effects of debt can be a lot to bear, but those emotional side effects of debt don’t have to mean the end of your days.

Debt Consolidation vs. Credit Counseling: Which to Choose?

November 26, 2014 by penn

You may have it as a secret the amount of debt you are currently in. however, it may not be so much of a secret that whatever the amount may be, you may be desperate to get rid of the debt as quickly as possible. While any method you choose to get rid of the debt may take a little hard work and much determination, there are two main and popular ways of getting rid of debt: debt consolidation and credit counseling. You may have heard of both debt consolidation and credit counseling, but if asked to compare debt consolidation vs. credit counseling, will you be able to? More importantly, you must ask yourself— which is best for you to use to get rid of debt? Continue reading for more information as the debt consolidation vs. credit counseling comparison is made.

All about Debt Consolidation

To begin the comparison of debt consolidation vs. credit counseling, the definition of debt consolidation must be understood. Debt consolidation is when you enlist a financial institution with the ability to take all of your debts and combine them into one debt summation. This method typically gives individuals in debt a lower and more manageable interest rate to have to pay back. There are a number of ways that debt can be consolidated. Some of those ways include transferring balances on credit cards, use of lenders, or doing your own negotiating with creditors. If you decide to consolidate all of your debts, be prepared for the more difficult step in the process.

Now, it is time to determine which method of consolidating your debt will benefit you the most. It is highly recommended that you choose the method where you can do more than just get rid of your debt. Before you lock down the method you will be more beneficial in using, ask yourself the following questions:

Should you prioritize your debts according to interest rates? If this is the best method for you, then incorporating a balance transfer may be the most beneficial way to handle your debt.
Do you prefer having a set rate and a date to complete payment on the balance? If this is the best method for you, then taking on an installment loan may be the most beneficial for you.
Are you good at negotiating situations in which finances are involved? If you area able to handle the art of negotiating to get your debt in a place that is easily manageable, then try your hand at negotiating your own terms with your creditors.
Are you comfortable with trusting a financial institution with your debt and helping you to handle it? If so, you may find it more beneficial to just leave your debt situation in the hands of a creditor so that he or she can determine the best method for you.

Debt consolidation is a great way to start paying off your debt. It gives you the opportunity to agree to terms that are more manageable. Either method you choose, if you decide to use debt consolidation vs. credit counseling, make sure to do what is most beneficial for you. However, if you do not have good credit and you have struggled in the past to repay debts, then in the battle of debt consolidation vs. credit counseling, debt consolidation would not be your best option.

All about Credit Counseling

Credit counseling may sound like a therapy session to you. In a way, that is exactly what it is. When you enroll in a credit counseling program, you allow finance professionals the ability to help you get your credit on the right track. This program may include a variety of tactics, including helping you with setting a budget, enrollment in financial sessions for free, or possibly the chance to sign up for a debt management plan.

In the battle of debt consolidation vs. credit counseling, credit counseling takes the cake for being the most expensive. If you decide to use credit counseling as your method to get rid of debt, you will have to pay for the counseling sessions. This is usually a last option for people because it is not often people are willing to spend money in order to get financially stable. The typical person who would qualify for credit counseling is one who is currently struggling to make debt payments, already have some debts in the collection period, and consolidation will not help. There are a variety of sites that can give you access to credit counseling professionals, but before you settle on one, make sure of the following:

Is the company licensed and have accreditation?
Does the company have customer reviews? What do they say?
What are the fees associated with using their credit counseling services?
Can you trust the company to help you get your finances in order?

In the war between choosing debt consolidation vs. credit counseling, if you decide to use credit counseling, make sure that you can overall trust the company that is helping you. Be honest with your counselor and know that they will be honest with giving you the best help. For a list of certified credit counselors, visit the National Foundation for Credit Counseling site.

When it comes to debt consolidation vs. credit counseling, either method will help you with getting out of debt. It is just a matter of deciding which method is better for you.