The first thing to do is to face the reality of your money problems. Most of us have an idea of how bad our money problems are we just need some help to reorganize our debts.
The first issue to consider when your debt gets on top of you is to face reality and work out the size of the problem. Most of us have an idea where the problem lies if it is with our overspent credit cards, our balloon bank overdraft or the large homeowner loan we recently acquired.
No matter what the reason for the money problems you need to find a solution now. Start by going through your bank and credit card statements and any bills to find out how much you owe.
1. Draw up a list of money that you have coming in and the money you have going out each month. Make another list of the amount you owe each of your creditors for your credit cards, loans, and bank account.
2. You should now have a true reflection of the state of your finances and you can start setting yourself a realistic budget for the months and year ahead. Do not decide on a budget that you know will not work as this will definitely lead you to failure. A debt problem tackled early is a debt problem solved.
3. Check your credit report. This is your personal credit history of your finances, from credit cards and loans to mobile contracts. It provides you with a profile of your repayment history and who you owe money to.
You will see how you’re coping with your finances as it lists the payments made and the payments you have missed along with any defaults, arrears or CCJ’s (County Court Judgments) you have incurred. When did you last check your credit report is in good health? To see your Experian credit report for free for a 30-day trial from CreditExpert.
4. Take a long, hard look at your spending and find ways to save. If you have any Insurance policies, broadband contracts, telephone accounts, Gas and electricity accounts then you should be using price comparison websites to find the cheapest and the best value for money deals around.
Price comparison sites provide an easy solution to reduce your household bills. Consider another cut back on everyday spending by making packed lunches, walking or cycling to work and braving the office coffee machine.
5. Consider using a cash-back website as they offer you money back from their commission if you use their websites to obtain a product. But, only use them if they offer you real saving after you have checked with the price comparison websites for the best deal. Remember Price Comparison sites are biased to the companies that they recommend as they are paid for their recommendations.
6. Increase your chances of getting a low-interest rate deal for your mortgage or a loan by improving your credit rating. Finance lenders use the information from your credit report and your loan application, to access the interest rate that they offer you. Lenders base their lending interest rates on how risky they feel lending you money will be.
7. Never miss, skip or delay a monthly payment to finance lenders – as the evidence will stay on your credit report for at least three years and give lenders the impression that you are unreliable. If you are having trouble finding the money, talk to your financial lender and see if you can negotiate terms you can afford.
8. Take advantage of the free, debt help on offer from organizations such as Credit Action (creditaction.org.uk), the Consumer Credit Counseling Service (cccs.co.uk), Citizens Advice (adviceguide.org.uk), and National Debt line.
Source by Mark Aucamp