1. Cut Back On Borrowing
The amount of debt you borrow will determine how much your credit score will be impacted. Credit limits are compared to your credit card balances, the same with loan balances and original loan amount. So try to keep your credit limit at the smallest number possible to avoid getting into a mess, in which in the future, for some reason, you are unable to pay back. It’s simple: the more debt you owe, the harder it is to finish paying it off. Don’t let spending get over your head — start saving! It also helps to ask yourself, anytime you are want to purchase something, do you need it, or do you want it? If you “want” it, reconsider your decisions as you don’t want to end up short in money when your credit card payment is due.
2. Reduce Your Credit Card Applications
Each time a credit score application is requested, your credit drops by a small amount. However, over time, all those inquiries can significantly decrease your credit score and affect your chances of receiving low interest. These days, applying for a credit card is only a few clicks away, but being approved for one is an entirely different story. In case you’re unfamiliar on how the credit scores are scaled — your welcome: 300-629: Bad credit 630-689: Average credit 690-719: Good credit 720 and up: Excellent credit
3. Create An Emergency Fund
Here’s a lifehack that most never think of doing: start an emergency savings account and fill it up quickly until you reach at least $1000. Why? Well, you never know when you might be out of a job, or something expensive in your car breaks. So it’s better safe than sorry to have backup money, in case you’re unable to pay off your credit card bills. The best amount to keep in an emergency fund should be around $1000-2500, which will keep you stress-free for at least a few months until you can get back on your feet. The faster you fill up your emergency savings account, the better. Additionally, the savings account can also help you catch up on your mortgage or car payments too.
4. Find A Licensed Insolvency Trustee
Licensed Insolvency Trustee companies exist to help reduce all the debt you owe. According to one such company, Sheriff Sole & Madej Inc, their sole mission is to provide ‘debt freedom’ for those who are inundated by any debt. This licensed insolvency trustee company is also one of the biggest for debt counseling, which is strongly recommended for those in a large amount of debt. They understand credit scores like the back of your hand and know the ins and outs of eliminating debt, while also rebuilding your credit again. Each session of counseling lasts anywhere between 10 to 30 minutes, giving you a positive outlook on life as you walk out of there. You will either be receiving advice for credit card debt, student loans or bankruptcy. For those who owe student loans, one of the biggest debt category in the US, here’s some advice from Sheriff Sole & Madej Inc:
