The best advice, of course, would be to pay off your credit card debt and revolving
charges in full every month. Since this is not possible for most people, it is highly
recommended to pay more than the minimum, if you can afford to do so. If minimum
payments or paying slightly more are all you can afford, this is probably an indication
that you are overextended and should analyze your budget and make lifestyle adjustments.
Any unforeseen expense will throw your finances into disarray.
Being declined for credit is a sure sign that you need to examine your finances.
In making credit decisions, creditors use information obtained from the various
credit bureaus to determine your credit worthiness based on what is known as a FICO
or Beacon Score. Therefore, if they decline you, it means that they feel that your
finances are either stretched to the limit or beyond.
If you are not able to set aside savings on a consistent weekly or monthly basis
there is cause for concern because you may not be able to meet any unexpected situation
that requires additional financial resources. If you are exhausting savings to keep
up with your lifestyle, it’s a sure fire sign that you are living beyond your means.
A budget reassessment is definitely needed.
This may be a sign that you are living off your credit cards to maintain your lifestyle
or to pay for day to day living expenses. It’s time to examine your budget and credit
card debt.
If you answered yes, this is a good sign that you are stretched to the limit or
already overextended. Many are still in denial at this point. This is the time to
get a good grasp on your finances and work out a game plan to prevent further damage.
If you were more aware of your finances and realized how high your balances were,
you might have been able to avoid the situation. Your creditors set your credit
limit based on your credit history, income and outstanding debt. If you are at or
near this limit it is a good sign that trouble awaits you if some hard financial
decisions are not made.
If you can not account for the total amount of debt that you owe, you may be avoiding
the problem. Simply hiding your head in the sand will not make the problem go away,
it will only get worse! You must immediately reassess your spending patterns. Face
up to paying off your debt in a more efficient manner, even if it means doing without
that coffee and donut you buy every morning on the way to work. If you do not, you
are inviting catastrophe.
Danger!!!! You are simply robbing Peter to pay Paul and you are committing financial
suicide! Your income can not support your style of life. An immediate budget analysis
is necessary and professional help may be extremely useful.
Hiding debt from family members is a clear sign that you are in denial. The fact
that you feel you have to hide your spending behavior from loved ones indicates
that you refuse to acknowledge there is a problem. If you still cannot share the
problem with your loved one, seek professional help on your own. The time to act
is now.
Do you issue checks and then keep your fingers crossed in hopes that by the time
the check is cashed, you will have sufficient money in the account to cover the
check. Issuing checks on the hope they will clear or, even worse, bouncing checks
is a red light that you are in serious financial trouble.
Receiving calls from creditors is a sure sign of trouble. Ducking these calls will
not make the problem go away. Since creditors are often unwilling to make direct
concessions the use of a trained professional such as a consumer credit counseling
service might be the only way to gain control of the situation and become current
again.
Reporting Negative Information
- Bankruptcy information can be reported for up to ten years.
- Information reported because of an application for a job with a salary
of more than $20,000 has no time limit.
- Default information concerning a US Government insured or guaranteed
loan can be reported for seven years after certain guarantor actions
Paul Richard,RFC
Executive Director
Institue of Consumer