Would it be better to get my credit repaired by going down the list to pay off collections, charge offs, and other delinquent debts when I get my taxes, or shall I seek a credit counseling service, or a debt consolidating company, or should I wait til these reduced percentage choice offers come through the mail box? Please help me because I am truly suffering, I cannot get a loan. I am constantly rejected.
By Crissie from Los Angeles
Get into a consolidation program. They can talk to your debts and get the amounts lowered. Then when you get your tax return you can pay them off and stop using your cards.
Debt consolidation companies are almost always a scam. They often charge high fees for their "services," and do not always deliver on their promises to help ease your debt problems. In my state (MO), debt consolidation/credit repair scams are one of the top consumer complaints to the Attorney General's office.
For credit counseling, call 1-800-388-2227 to find your nearest Consumer Credit Counseling Service or visit their website at http://www.nfcc.org/.
The quickest way to pay off your debt is to start with the highest-interest accounts and pay them off first, then move down your list accordingly. Pay everything on time. If you cannot make your payments, work with your creditors to establish a repayment plan. CCCS can help you with this. Time - and only time - will repair your credit rating. Do not apply for more loans because every time you apply, your credit rating takes a hit.
If any of the bills are medical or hospital, you can speak with the billing dept. or better yet drop in and take all your outstanding bills with you and they can help set up a monthly payment plan that's affordable and it helps in the long run. You're still paying them off, but it shows you really are caring and trying to pay them off in their time frame. In my case, I had 18 months and was able to pay it off sooner.
What are the main priorities in your stack of debt that really should be paid off first? Yes, high finance charges is one option to choose, but what if it is a need for another vehicle to be replaced in the very near future and to pay down the debt before trade in time is another option. OR, someone needs medical attention that no longer can be put off, perhaps getting those bills paid down will be more critical. Talk to your c.c. company(ies) and see if they'll bring down the interest if you agree to work on paying it off and not put to use in the meantime. You can have your own c.c. account frozen w/o the assistance of another party involved.
I don't really like to recommend refinancing large debts like homes, cars and such, but sometimes one feels the dire need to do so and that helps take the strain off the budgeting; however, it oftentimes does not stop the spending spree or puts the extra dollars to best use. Consider that before doing any refinancing.
When you get single dollars back from making change at store or gas station, etc, put them in a safe place and keep adding to it. Before you know it, you've enough money for an emergency or to help pay on a monthly bill. This really does work and a lot faster than coins. I got this idea from a professional money advisor in some magazine article and I surprised myself at seeing how many single dollars added up quickly after trying.
Keep a close check on everything you buy starting with one week; save all those register tapes to refer back and see where your money goes on what. You might decide where you can cut back even more. Write down amounts and what it was for if you do not have any register tapes like gas stations or such.
This gives you a visual aid to see where your money goes and on what.
If you do movie rentals, go to the local library where you can get them free with your library card. Look at your phone landline bill and see if you can cut back on charges that aren't necessary they bill you for monthly like the internal lines just in case it ever needs replaced. Use fluorescent light bulbs in your home as it's low energy. Look for ways you can save dollars and cents around the house. Close off any rooms you don't use to save on heating expense. Unplug a lot of appliances that aren't used all the time like a toaster, radio, etc. Current is still traveling through those lines even when not in use. There are lots of little things that can help cut daily expenses to bring down costs each month. Learning to teach one's self thrifty ways isn't easy as it's sacrificing and take practice, but it's not impossible either. Just get your mind set on a plan and follow through til you've reach your goal which is helping to get out of the debt burden. Good Luck to you.
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