Do you know what your debt is made up of? How much money is owed to an online cash advance or payday loan lender? Does the core of your bad debt consist of multiple credit card balances? In order to get a handle on debt and begin to repair your finances, you need to know the facts about your credit history as well as who it is you owe money to.
If you owe money for an outstanding cash advance loan, the best approach is to be brutally honest with the lender. Write a letter or call them up to discuss your debt and how you can best resolve this financial debt. Any good lender will have a customer service representative prepared to take your call. As with any business or person with whom you have borrowed money from, it is always the best policy for the debtor to place a call informing the lender of financial concerns. Skipping a payment and placing a call later, will get you talking to someone who now does not trust your ability to repay the loan.
Approach the subject as someone looking for help. You never know what a business will offer for suggestions until you try. Each lender will have their own policies and payment plans, so do not assume that one answer will blank all your creditors. Keep yourself from believing all the stories you have heard. Credit card myths can be deceiving and may land you in hot water with creditors and see your credit score significantly drop. Most lenders will not be in a hurry to report your financial wrongdoings if they are aware that you are addressing the matter positively.
Do not assume that anyone can get their credit card debt reduced. Debt settlement companies boast that anyone can do it, but it may take a major life interruption for a person to get the amount owed reduced. Credit card companies and cash advance lenders both want to talk to customers directly. Placing that phone call might just save your credit score some much needed points.
Using a debt settlement or loan consolidation company will significantly affect your credit. Anytime you use a third party to help you with your finances, there will be negative reports sent in to the credit bureaus.
* A consolidation company will work with creditors to lower interest rates and lower payments. They collect a monthly payment from the debtor and disburse payment to the creditors. Even though your payments are still being made and you have someone working with you, the credit bureaus will still take these steps as negative.
* Debt settlement companies will offer you much lower debt solutions than what was initially owed. These companies will collect money each month to build up and use to negotiate a payoff. Many companies will eventually settle, but the missed payments until that point will be recorded with the credit bureau as well as the "settled" status once paid.
It's seven years of lowered credit scores when getting help to solve debt problems. Learn to address your cash advance lenders and creditors before the first problematic payment. You are your best resource when it comes to debt.
* Cut back expenses
* Earn more income
* Communicate with lenders and creditors
* Budget wisely