Acquiring credit is not a bad thing as long as you know how to manage debt and repayment. In this post, let us discuss some tips on how you can manage three important aspects of debt more effectively.
Managing Home Loan
Missing your monthly loan payment even just once can get you into trouble. Some lenders will immediately send a foreclosure notice if you fall behind your payment by two consecutive months. Thus, rather than wait until you missed your second or third month of payment, the best thing to do is get in touch with your mortgage lender. Do not wait until a debt collection notice arrives.
If you're having problem keeping up with your monthly loan payments because of your current financial situation, you should discuss your situation with your lender. Did you just lose a job? Or did someone in the family got sick? Whatever your reason is for struggling with your debt payments, you should never ignore your due dates or wait until your lender contacts you about past due debts.
Many lenders are willing to modify the original terms of the home loan to help a borrower experiencing financial crises. For instance, your lender may agree to reduce your monthly loan rate or extend your repayment term to lower your monthly fees. The sooner you can speak with your lender about the problem, the sooner you can come up with a solution.
Managing Credit Card Debt
If you own more than one credit card, it's very important to pay attention to your spending. Credit cardholders can save a great deal of money if they can avoid the monthly interest rate charges. The secret is paying your monthly balance in full, instead of keeping a revolving balance.
Before charging anything to your card, ask yourself, "Will I be able to pay the amount in full before the due date?" If you have doubts as to whether you can pay in full or not, it's best not to use your credit card and simply use cash.
Another important step is to check your monthly statement of account before posting your payment. Errors may occur and if you do not take the time to review your bill, you could end up paying for charges that you did not owe. In case you discover incorrect charges in your credit card bill, call up your issuer immediately to dispute the charges.
Managing Your Personal Finances
Do you have a definite budget plan for the month? If you do not follow a financial plan, it is recommended that you start to create one. Make a list of all your expenses for the entire month and compare the total amount to your monthly earnings. Are you spending more than what you earn?
Based on the list, it will be much easier to see your spending pattern. You might need to make some adjustments or changes with your spending style but doing so can save you from the trouble and pain that bad credit can bring.
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of http://www.newhorizon.org such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended Credit Cards for Good Credit.
