The way you spend and manage your money can not only make you crumble in debt, but it can also hurt your credit score. Fortunately, there are simple repayment habits that can help you pay off your debts and rebuild your credit; our partners at Fairlife Financial share a few tips with us.
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Your credit usage refers to the portion of your credit limit that you are using. To see positive results on your credit report, your credit card balance should never exceed 25% of your credit limit.
Does your balance greatly exceed this threshold? A debt consolidation loan via https://dedebt.com/ site could help you. With a debt consolidation loan, you can pay off your credit card balance and any other overdue loan, and then make just one easy payment a month. By choosing a personal loan (installment loan) to consolidate your debts, you will benefit from a more structured payment schedule than with your credit card, which constitutes a renewable debt. Personal loans also have a fixed term: at the end of this term, your debt will be repaid.
Make up for your delays
Overdue accounts complicate future credit or loan requests. It is essential to make late payments and update your accounts. The same applies to any collection account. Make these payments a priority, and contact your lender to ask if you can repay your account on a schedule that’s right for you.
Pay on time, all the time
Your payment history represents approximately 35% of your credit score. Any missed or late payment is reported on your credit report; it is therefore important, as much as possible, to stay up to date with your payments. Forgot a payment last month? Don’t worry: missing a payment or two won’t have major consequences. If you make it a habit, however, your credit score could suffer greatly.
Here are some simple tips to help you stay in control of your payments:
- Set up automatic payments so that they are charged to your account on the day that works best for you, such as your payday. The money will be collected in your account before you even know it, and you will quickly learn how to adjust to the reduced balance.
- Choose the payment frequency that’s right for you. Some value regular payments once every two weeks, while others prefer the simplicity of a single monthly payment.
- Opt for a longer loan term; your payments will be more affordable. You may pay slightly more interest over the life of your loan, but more affordable payments will keep you in control.
- Choose a secured loan. Secured loans are guaranteed by the value of your property, which allows you to take advantage of lower interest rates and more affordable payments.
- Create a reminder. Life is running fast, and it’s okay to forget a payment or two from time to time. Find a method that’s right for your lifestyle, whether it’s a phone reminder or a calendar entry.
Make additional payments
Additional payments are also recorded on your credit report and demonstrate to lenders that you are managing your debts proactively. It can be difficult when trying to pay down debt to find more money to spend on your balance. Remember that even paying $ 10 or $ 20 more a month can have a positive impact. By doing so, you will also be motivated to make changes to your budget and your spending habits, whether it be by reducing your spending or finding a way to increase your income. These are the changes that will help you get out of debt in the future.
Protect yourself by opting for loan or credit insurance
Loan insurance can help you cover some or all of your loan payments in the event of an unexpected job loss or accidental injury that prevents you from working. Most people who try to get out of debt do not have access to emergency funds (which is often why they have accumulated debt). If you don’t have a lot of savings to cover expenses in the event you are unfit for work, you should really consider loan insurance. Loan insurance can help you stay up to date on your payments in the event of an unexpected landmark event.
Fortunately, Fairlife Financial loans offer flexible payment options and affordable payments designed to meet your needs and budget. If you want to get a debt consolidation loan to help you regain control of your finances, request a loan quote online. In a few minutes, you will know how much you could qualify for and what your payments would be. There is no obligation, and no impact on your credit score. Great, right?