Having personal debt can be likened to having an elephant in the living room. You know that it\’s there, but you don\’t want to think about it or acknowledge its presence. Be proactive! Now is the time to be level headed and be realistic about your debt, to find the answer to the question that is on everyone\’s mind: \”just how much debt do I owe?\”
If you don\’t know, don\’t feel too bad, many people don\’t know, and if they do know, many times, their spouses have no idea. You can\’t heal your finances without knowing just how much baggage you are carrying and at what interest rates. So grab your bills, get a calculator and determine how much debt you really have. Once you know your total debt, you can start getting rid of it. Besides, it might be cathartic to put everything down on paper, and it might not even be as bad as you think it is!
Your next step is to determine what your credit score is. As you might already be aware, your credit report is a reflection of your responsibility when it comes to taking on new debt and might have an effect on your ability to obtain credit, get a new car, living situation, or even a job.
You can get a hold of one free report once a year from each of the three credit bureaus. That\’s three credit reports all in all. So it seems sensible to obtain one every four months. This is a surefire and free way to be certain that you have not fallen victim to identity theft.
To grab a free credit report, you can go to annualcreditreport.com; this website is set up by the Federal Trade Commission. The basic thing to know about credit reports? High score is good, low is bad. Once you begin to pay off your debt, the score will rise, once you begin to fall behind with payments, the score will drop. A high score means lower interest rates, low score means higher rates.
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