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Debt Everywhere! Tips to Escape from the Inescapable
Posted on December 6th, 2011 By: admin
Many people consider debt to be one of the most difficult things to escape from. Some people do everything from robbing banks to selling drugs in order to find the money they need to repay their debts. While you should be concerned about the amount of debt that you have, you should not feel that you have to commit crimes in order to be able to escape from your debt. There are a number of steps that you can take in order to escape from debt and to consolidate your debt to keep an easier track of it.
The first step in helping to escape from what many people consider the inescapable is knowing how much debt that you have. Pull a copy of your credit report from the three major credit reporting bureaus. These are Equifax, Experian and Trans Union. A free copy of your credit report is available once a year from these three companies at annualcreditreport dot com. The federal government made this a law several years ago and many consumers still do not know about it.
Now that you have a copy of your credit report, all your credit accounts and balances, make sure it is 100% truthful. Errors can and do occur. Some estimates peg that there are millions of Americans who have invalid information on their credit reports. Make sure all amounts are correct and each account is active and has not been paid off. Being able to determine whether or not the accounts have been paid off will help you to see how much debt you are really in.
Most people are going to be able to consolidate their debt. Debt consolidation loans are available through a wide range of lenders. Banks, credit unions and other lenders offer debt consolidation loans. Make sure that you consolidate high interest credit cards and any account that is higher than the interest rate you are paying for the debt consolidation loan into said loan. Also, do NOT use a HELOC as a debt consolidation loan. Many people are tempted to take the equity of their house to pay down debt. Do not do this unless you are certain you will be able to make the payments. You would hate to lose your home over some unpaid credit card bills. A bad credit report, although not great, can be recovered from. Losing your home where you have lived for years is very difficult.
Sometimes people are not able to get a loan to consolidate their debt. They may either not have a high enough credit score or credit so bad that no lender will touch them. This is when a consumer needs to speak with a credit counselor. These are the people who will help them to budget to pay off their current debt. They also will teach how to budget and setup a budget for a consumer to stick to. The more help you can get, the better!