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Some Quick DIY Credit Help Tips
Credit help can vaguely be categorized into two parts, but they are interlinked. One part is helping you get out of a vicious circle of credit, the other aims to repair credit rating, to help you get better terms. These are interwoven, since paying your debts on time will increase your credit rating over a period of time.
The Magic Phrase: Self Help
Self help is by far the best way to aid yourself. If you are in a bad debt situation it is likely your budget is tight. In a bad debt situation you have two choices. Help yourself, which takes just a but of studying and time, or pay a pro a LOT of money to do it for you. The reason I say a lot is that you just simply won't get good help cheaply. Sure, there are people on the net and various companies who promise you great results for a very low price. I tell you, hope is the curse of man. Never-ever hope, do it yourself, and don't fall for scams. Managing your debt is simple and it takes just a few short browsing sessions if you don't know the financial terms.
A DIY Debt Consolidation
Let's jump into an example right away. Let's say you have a credit card that has an annual interest rate of 14%. You also have a loan from a bank that has a ery low 8% interest rate. You should move like lightning and get more loans! Why? Let's say you have a $10000 debt on your credit card and a $10000 debt from the loan. In one years time you will have to repay the loan plus interest, that will be $20000 plus $1400 and $800 from the two debts respectively. This means you now have $22200 in debt.
Let's presume you said, hey! I'll take out more of the loan and repay my credit card debt with it. You take out $10000 to repay your credit card debt. You are now left with $20000 in debt, the same amount, but is it really? No way! This debt has an interest of 8%, so after a year you will only owe $21600.
While that may not mean the world, it's still $800 extra you can spend on wither the debt, or whatever you want. The cost of this? Nothing. No bank handling cost, consolidation costs, whatever. Just some thinking and some time.
Some Other Tricks
If you feel that your credit rating may be in trouble because you can't pay on time don't hesitate to pull another loan out of the bank's pocket. Am I sending you into another vicious circle? No, I'm saying be weary about it, think and do it well. If your next payment is $2000, but you can only spend $1700 on the loan go ahead and get a $300 loan (taking it form a credit card is the same). You will probably be able to come up with the extra $300 in a month, while your credit report will stay spotless. Be careful with this though, in some cases it is OK if your credit report takes a dent. If it takes a few blows there wont be a big problem, but if you keep it up for long it will become a major raincloud over your head.
Use Common Sense
Just to sum up a bit, use your common sense. Finance, especially personal finance is really just smart thinking. Taking out more of a small interest loan and paying a big interest one with it is for example smart, but there are a lot of little tricks to use when trying to pay off debt better. Think about it browse on the internet, but don't let others do this for you.