When you decide to start managing your debt, you develop some questions about what you should do and how different events affect your credit. It is important to have the answers to all of your questions before you start any debt management program.
Can Late Payments Affect My Credit Rating?
According to the Wall Street Journal, when you pay your credit card bills has a significant effect on your credit score. Paying your bills on time ranks just slightly higher than making sure you pay at least your entire monthly minimum. To pay your credit bills on time you may want to consider signing up for your creditors' automatic billing service. This service will deduct your payment from your checking account automatically each month on your due date. If you know you will be making your payment late, then contact your creditor and let them know exactly when you will be making your payment. If you are up front with your creditors they may decide to not report your payment as late. If you are habitually paying late, then that will show up on your credit report.
Should I Include My Kids in My Budget Planning?
Yes. Include your children as early as possible in the process of paying bills to make them familiar with it as they get older. You do not need to give your children your specific numbers if you would prefer not to, but giving your kids the numbers can help them to appreciate the way that money can be spent on bills. The more children are exposed to the intricacies of bill-paying at a younger age, the better the chances are that they will respect the responsibility of paying bills when they get older.
Can I Ask for a Lower Interest Rate on My Credit Card?
It is possible to negotiate a lower interest rate on your credit cards without having it affect your credit score. One effective way of winning this negotiation is to tell your creditor that you are going to transfer your balance to a card with a lower interest rate if they do not help you out. It does not hurt your credit to ask for a lower interest rate, and you can save a lot of money on credit debt by having your creditors lower your interest obligation.
Should I Close Paid-off Accounts or Do They Close Automatically?
In many cases a creditor will not close an account unless you ask them to do so. Wait at least 30 days after you make your pay-off to see if you may have left a small balance behind. Once you have completely satisfied your balance, send the creditor a standard mail letter requesting that your account be closed. Include your account number and address in the letter and keep a copy of the letter for your records. Until you have an account closed, the credit limit available will continue to count against your credit score. Closing the account removes it completely from your credit report and can help to raise your credit score.
Can I Consolidate My Own Debt?
There are two ways you can consolidate debt. You can secure a personal loan and pay off your debt with that loan. You can also use the equity in your home to get a home equity loan and use that to pay off your debt. When you consolidate debt without the assistance of a debt consolidation agency, then it will have a positive effect on your credit. When you use a debt consolidation agency, there is a note put on your credit report that you are going through debt consolidation and your credit score drops while you are in consolidation. If you can deal with your debt on your own, then that is the best method. If your debt is taking over your life and you cannot get financing to consolidate it on your own, then a debt consolidation company is a legitimate option.
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