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Ten Steps To Being Debt Free That Work If your finances are lacking right now, here is a plan to help reduce your debt while also laying the foundation for wealth preservation in the future.
1.Make sure you have an income to work with. This option is mandatory or you are headed for bankruptcy.
2.Know your debts, how much, payments and interest rates. Make a list of all of your debt. Face up to it and start aggressively reducing it.
3.Prioritize the debt by:
a. Interest rate b. Payment Try to pay the high interest debt first.
Roll those payments into the next on the list once paid.
4.Pay more than the minimum payment.
Paying only the minimum payment can last for years and cost you a fortune in interest.
5.Do not roll or transfer balances no, no, no, unless you plan to pay the debt within the specified low interest period. Make sure to destroy the higher interest card.
6.Destroy the Cards as you pay them off. Only hold one card for emergencies or to pay for travel related items such as airline tickets or rental car. Plan to pay it off each month to aviod interest charges.
7.Obtain a copy of your credit report. Learn what is on it and file it. Update it occasionally. You can now get a free Credit report from each of the three reporting agencies once per year.
8.Create a budget or money plan and stick to it, this step takes the most discipline.
9.Please, please, do not use the equity in your home for paying off credit cards, purchasing or paying off vehicles, boats, recreational type items.
These items will soon have no value, so in essense you will be trading your wealth for nothing.
10.Take action now if you feel you are headed for serious financial disaster, do not hesitate, for by doing so will only aggravate the situation. There are many institutions that do credit counseling and or debt reduction assistance.
Avoid the "Repair Your Credit" Clinics Although some consumers pay credit clinics hundreds or even thousands of dollars to "fix" their credit reports, only time can improve bad credit. The Federal Trade Commission has investigated and reported at length on these often-fraudulent "clinics." And some credit repair plans actually encourage you to commit fraud yourself by attempting to create a second credit identity.
Consumer credit reports contain easy-to-follow instructions for disputing inaccurate information at no charge. Inaccurate information will be changed or deleted. Accurate information that shows negative payment habits will usually remain on a credit report for seven years, with bankruptcies remaining up to 10 years. Federal law mandates this.
Here is the main point: There is nothing a credit repair clinic can legally do to fix a credit report that you can't do yourself for free.
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