First Step Solution to Rebuild and Repair Credit - Analyze and Decrease Debt

by Michael Benifez - Date: 2007-04-06 - Word Count: 552 Share This!

Carefully analyze your debts to find solutions for paying them off. Debts are bills we owe. A lender extends us a line of credit believing we will pay the debt on time. Creditors will notice if you get behind on your bill payment, but they often wait a few weeks before notifying collection agencies and reporting you. During this time, you can write your creditors and ask for extensions or reductions on your debt. This way you'll be able to begin paying off the debts.

Most creditors want their money back and will extend your time to repay the debt. They do not want to go through the hassle that comes with reporting you to a collection agency. Most creditors want their clients to return and believe that if they give you a chance, you will repay your debt and open a new account.

If you avoid contacting your creditors for an extension, they will hand you over to the hounds. Creditors want to remain the nice guys hoping you'll keep them in business. They let the collection agencies be the bad guys. Once a collection agency receives your files, they will go to all lengths to hunt you down. They might even break some laws to find you.

Collection agencies don't care if you return to the creditors. They are paid a percentage for each debt collected. They have no interest in being nice to you.

Collection agencies are in it for the money. Avoid this situation by repairing your debt.

Decrease your debts upfront repair your credit. Contact each creditor and set up a budget plan that will help you through the process of eliminating your debts. Set up a weekly budget plan, and then begin to develop a monthly plan.

Once you have a budget set up, check the balance in each of your accounts regularly. If you don't have a savings account, open one. Make sure the account does not have fees or interest rates attached. If you have difficulty managing money, you may want to open a Paypal account and apply for a debit card online. This account not only protects you against identity theft, it also makes it difficult for you to get money right away. Keep your debit card in an inaccessible but safe place. Additionally, papal accounts sometimes offer kick-backs when you spend money through them. For example, if you want to pay a bill with a Papal card, you can get 1% of that money returned to your account.

While a Paypal account is a solution, you do have to learn to manage your money yourself to repair your debt and become financially solvent. Feeling out of control can affect your life tremendously. When you take control of your situation, you are take control of your life. Stop collection agencies, and get out of debt.

Use helpful resources that won't add to your debt load. Loopholes in the system can help you get out of debt. If you are low income and have bad credit, for example, there are government loans and grants available. Search the marketplace and find out if you qualify for a loan or grant from the government.

There might even be the possibility of getting creditors to drop your debt completely. Learn what is available to you in order to get out of debt and avoid collection agencies.

Related Tags: debt reduction, repair credit, pay off debt

Michael Benifez writes on finance matters for, covering mortgages, refinancing, debt reduction and insurance in Palm Coast, Florida and Flagler county. His article on debt consolidation covers steps to reduce debt.

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