7 Super Easy Ways to Tackle Debt

Congratulations to you! I say that because if your reading this, you are serious about reducing your debt load. You may have been displaced over the last few years and your income suffered, you lost your job, or even your home. If you have been frustrated about your situation, there are solutions. Being consumed by debt is daunting, every time you look around, get a few dollars in your pocket, you feel like where does it go?

Here is a plan – you can see results.

1. Think it through – Debt exists because credit is used more than cash. Next time you get another credit line, use it wisely. If your already in the hole, pay off what you owe first. Credit cards and lines of credit are for emergencies, not daily use.

2. Stay out of the stores! – Buying when the mood suits you is a major mistake. Whether its in the malls or online, spending just to spend never amounts to anything more than maxed out credit cards and overdraft fees on the debit cards.

3. Build a budget! – Yes, it’s the one thing, most people hate to do, is budget. Believe it or not, a budget is a guide, a plan to use a certain amount of money to pay a certain amount of things. Its just that basic. You must get a clear view of how much is outstanding to your obligations – get clear on who is owed what. From there document it, dates due , amounts due, etc. Even document your extra spending. This stuff like the drive-thru stop at McDonalds.

4. Get focused on tools available – Find low interest rate loans, credit cards to move high balances. A lot of banks have great rates for balance transfers. Keep a close eye out for annual fees too. Sometimes a low enough interest rate is worth a small fee to get those exclusive offers.

5. Get your tail in gear! – Don’t procrastinate. Be about slashing your debt load TODAY, not tomorrow. Put that plan in motion. Don’t let anything stop you.

6. Credit cards are your friend – Do not close your credit lines! Bad move, keep everyone of those accounts open, it will limit your options and stop continued positive payment history.

7. Remain in control of your credit – Pay all obligations on time. Pay the full amount due by the due date. Do not be late on credit cards, banks will close you if a pattern of late payments is identified.

The Truth Behind the Credit Score

The insurance industry can cancel your policy, even if you’ve never made a claim. This is because they use a system called Insurance Credit Scoring. This allows your insurance company to make assumptions about your reliability and honesty based on your credit score. These assumptions are based on the erroneous belief that there is a direct, statistical relationship between your financial history and the risk that you will be dishonest. The lower your insurance score, this assumption says, the more likely it is that you will file claims against the company, inflate claims or make fraudulent claims, or even commit arson. The credit score that is used to judge your fitness to receive insurance is based solely on the information in consumer credit reports, used in conjunction with motor vehicle records and other paperwork. From this information, the insurance company determines the risk of insuring you. Because of this process, insurance customers may receive higher premiums based only on their credit score, even if they have clean driving records. The insurance company is hoping that customers with good credit will choose to settle an incident without making a claim, saving them money. It is also believed that people with low credit are more negligent, commit more fraud, and improperly care for their homes and vehicles. The insurance industry regards the credit score as a more accurate prediction of loss than the individual’s personal insurance history. This industry wants to discourage claims and avoid paying out when claims are made. Customers who might legitimately cost them money are to be avoided and gotten rid of, even using inaccurate methods to determine this. The insurance industry is creating correlations between people who make claims and low credit, then using their own numbers to back this behavior up. If this has happened to you, the most important thing you can do is to file a complaint with your Department of Insurance. Many states have laws requiring this department to track complaints involving this kind of credit scoring. Because of this, complaining is the only way to let Insurance Commissioner know that something is wrong. You may obtain a copy of the credit report that caused your policy not to be renewed. Be sure to order it, and correct any errors that crop up, because the credit reporting agencies do make errors. Once any errors are fixed, be sure also to have the agency re-rate you. Even individuals with exemplary credit may be penalized by insurance credit rating because the agency does not calculate lending credit and insurance credit in the same way. Insurance credit rating is being used more and more as a way for the companies to save money at the expense of innocent customers. Be aware of your credit and your options if your rates go up or your policy is dropped.