Debt Settlement – Carry Out By Yourself

The best solution to fight against debt is self evaluation and introspection. That’s effective because only you how to deal with debts. Analyze your actual financial state and try to make an effective plan for it. That effective plan should contain some rules such as when to spend money, where to spend etc. You should avoid spending money on extra stuff to get a lifetime relief from all debts. Here we are going to tell you some important tips that will be effective to fix all your debt related problems by yourself.

Debt settlement by yourself

Debt settlement is the right choice indeed when you suddenly find your financial condition in a worst state. Bad financial state means the state when you even fail to pay off the least amount of money on your credit cards, bills etc. Debt settlement is much better than filing bankruptcy in such a bad financial situation. Debt settlement will help you to reduce your outstanding debt balance by 40%-60%, guaranteed. Try first to settle those debts that contain higher interest rates. The debt settlement of such debts will give you a big relief. Here is the complete guide to the debt settlement:

1- Calculate the total amount of your debts.

2- Evaluate the type and the age of your all debt accounts.

3- Ask a copy of your credit report from your creditors/credit bureaus and thoroughly evaluate it.

4- Check your credit report and search if you are still have an account with your creditor.

Debt Settlement of the debt with the creditor

Imply these steps to settle your accounts that are still with your creditors.

1: Know the right way to contact your creditor, such as:

- You should know the debt negotiation tips

- You should be ready to make move according to creditor’s mood.

2: Check the creditors’ database to take the address and other useful information about creditors.

3: Check how much you can pay to your creditor before contacting your creditor to decide about your monthly pay offs.

4: Contact your creditor and describe him/her your plan in detail. Convince them how they can take benefit from your plan.

5: Inform your creditors in anticipation that you are mailing your plan to a list of creditors and you will pay the first installment to the first creditor that will contact you first.

6: Keep all the data of the acceptance letters in record and the amounts that are fixed with your creditors. Request a receipt of your amount that you “paid in full”.

7: Repeat the same practice every month and keep on adjusting debt settlement offers.

8: After paying off the large amount of debt, send the offers of paying back high percentages of the outstanding amount to creditors.

9: If you keep on repeating the same practice every month then soon you’ll become debt free.

10: Take your fresh credit reports time to time to keep yourself updated for the status of your accounts.

11: After paying off all the debts, ask your creditors to update the account status on your credit report as “paid as agreed”.

10 Factors to Be Avoided To Protect Your Credit

It is easy to protect your credit from any harm than to repair it. If you avoid those things that can hurt and damage your credit badly then you won’t have to struggle to repair your damaged credit. You can save you from bad credit headache and trouble by avoiding following bad things.

1- Avoid late payments

Try to avoid paying off your payments late. Paying your payments late can hurt your credit badly and leaves a black spot on your credit history. Remember that credit report contains all your payment details that can be beneficial or unbeneficial for you so try to avoid late payments.

2- Limit Your Credit

This is the second factor that can affect your credit score badly. To avoid this thing, try to keep your balances below 30% of your actual credit limit. This is because if your credit card balances becomes close to your credit limit then it can make a drop in your credit score.

3- Avoid too many applications

Try to avoid filing too many applications for credit card and loan. Large number of applications affects your credit score and lead to the drop in your credit score.

4- Don’t close credit card with balance

If you have a credit account that contains balance and you close it then even after closing of that account, the balance of that account is reported to the credit bureaus.

5- Don’t skip your rents

It is very critical factor because if your landlord is not reacting after you skipped your rent then it doesn’t mean your landlord is kind to you. Your landlord can report this to the credit bureau anytime. Try to pay your rent on time and don’t skip it.

6- Don’t avoid paying medical bills

Pay your medical bills on time because if you don’t pay your medical bills then it can affect your credit score badly. Skipping your medical bills can cost you a black mark on your credit report.

7- Use your credit card

If you are new user of credit card means you have lower credit score. You can overcome this problem by using your credit card smartly.

8- Avoid closing old credit cards

If you have old credit cards and you close them then this can affect your credit score badly. This is because your old credit card contains a place in your credit history. If you don’t want to damage your credit history then keep old credit cards open and use them infrequently.

9- Avoid paying less than minimum

If you pay on time but pay off less than the minimum payments then it affects your credit score and it is equal to late payment. Not only equal to late payment but also counts as a late payment. You can fix this problem if you are even unable to pay the minimum payment. Just call your creditor and ask him to make some other arrangements in this regard and try to fix it up before the due date.

10- Avoid bankruptcy

Either avoid bankruptcy or if it is inevitable then make sure you are unable to pay the credit cards by all means. Filing for bankruptcy damages your credit score badly and leaves a black spot for next several years.

Making a wise decision about your credit card is important. Try to avoid all above mentioned things to protect credit score from any damage.