Are you looking to get out of debt but don’t know where to start? Then you are going to love the How to Get Rid of Debt and Also Manage Your Credit Score guest post by Allan from The Practical Saver.
Let’s face it. All of us want to be debt-free. It feels good to not owe anything to the creditors. It feels good knowing that you can go to sleep at night without thinking that you have to wake the next day figuring out how to pay off your debt.
In addition, many of us want to get rid of debt so we can improve our credit score.
The higher the credit score, the greater the chance we would be approved for low-interest credit.
Believe it or not, there are ways to get rid of debt and also manage your credit score.
If you’re interested and ready to know what these ways are, then, read on!
How to Get Rid of Debt and Also Manage Your Credit Score
Here are some of the best ways you can put into action to pay off your debt and improve your credit score for good.
1. Think About Your Spending Differently
One of the first things to do in order to get rid of debt is to think about your spending in a different way.
Maybe in the past, you wouldn’t mind spending a lot of money and did so with little thought as to the consequences of your actions.
Now, as you face tons of debt and never-ending bills, you know that you need to think about spending in a different way, save money, and make money fast, too.
When you spend from now going forward, consider how this spending may impact, in other words, add to your pile of debt which keeps getting bigger and bigger.
When you consider how your constant spending affects your monthly payments, you will start to spend less and have less debt.
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2. Budget Your Money
When you want to reduce your debt, the best way to help you achieve this goal is to make a budget.
Making a budget lets you take a look at the necessary costs and put those down in writing, allowing you to see a concrete monthly payment amount on paper.
Once you have your necessary costs written down, you can look at what you have left to spend from the money you make and then cut back on unnecessary expenses.
By figuring out what you must spend each month and what is discretionary spending, you can cross out those things which you don’t need and save money.
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3. Put Credit Cards Away
Another thing to do when trying to get rid of debt is to not add to it.
Put away your credit cards and try to pay cash or use debit cards when you have to pay for things as this will help you to pay off debt.
Not only will this lessen your mounting debt, but it will prevent you from having to pay interest charges on your account.
You don’t have to cut up your credit cards because you want to have these items handy just in case they’re needed for an emergency.
Simply put them away and don’t use them for purchases.
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4. Earn extra money
The truth is a lot of people have a lot of bills and not so much of an income. That’s where getting a side hustle or two will make a difference.
There are side hustles that can help you earn extra money without you leaving home. Some people take paid online surveys, affiliate marketing, and customer service to earn cash on the side.
What’s the best side hustle for you?
Only you can answer this question. But the best place to start is by asking yourself what your interests are, where you are good at, and where you want to spend your time on.
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5. Contact Your Creditors
Another way to get rid of debt is to contact your creditors.
There are a few things you can ask of your creditors relating to your debt.
First, ask your creditors if they can lower your existing interest rate.
This is a costly payment each month which can add up.
Ask your creditors if they can reduce your interest rate as doing so will make it possible for you to pay off debt more quickly.
Another thing to ask your creditors relates to allowing you to reduce your monthly payments.
This is a good option when you want to pay down your credit cards or make a monthly payment on another type of debt but are unable to come up with the money to do so.
By asking your creditors to reduce your monthly payments, you are still making payments each month but doing so in a way where it won’t break the bank.
When you contact your creditors in an attempt to pay off debt and do so in a reasonable manner, you should note that not all creditors will be willing to work with you.
But, on the bright side, there are certain creditors which will help you to work out your payments and make it easier for you to reduce your debt.
You never know until you try, so be sure to ask all of your creditors and don’t get discouraged if one or two say no.
6. Keep An Eye on Your Credit Score
Many individuals misjudge the importance of the credit score.
They think, “So what? It’s just a number.”
Your credit score is something which will be with you always and can make or break future loans and accounts that you wish to obtain.
When you miss payments or use a lot of your credit quickly, your credit score will suffer.
You want to have a healthy credit score and manage credit score as this will help you in the future when you ask to obtain a loan on a future home purchase or wish to obtain a finance loan for a new or used car.
Your credit score is one number that you should always keep an eye on and work to ensure that it is at a favorable level.
Some of the ways you can boost up your credit score include the following:
- Pay your bills on time
- Don’t use up all of your credit on your credit card bills
- Pay off debt on credit cards
- Keep balances low on credit cards
- Only apply for credit cards you will actually need and use
- Don’t open new credit cards too frequently
- Don’t close your credit cards
By following these aforementioned tips to manage your credit score, you can be more likely to have a healthy credit score, which will benefit you financially in many ways.
The truth is, getting rid of your debt and improving your credit score don’t have to be impossible. Yes, get those two in the right direction can be hard, but it’s not impossible.
Sometimes, the solutions are so simple that a lot of people tend to overlook them.
Now, it’s time for you to put these things into action and get what you truly deserve.
Allan Liwanag is the blogger behind The Practical Saver. An analyst by day and dedicated blogger by night, he loves to share his thoughts – based on his research, personal knowledge, and experience – on topics related to family, life, and money.
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