Have you checked your credit report lately? You are entitled to one free credit report per year from each of the three major credit bureaus, Equifax, Experian, and TransUnion. The website you can use is https://www.annualcreditreport.com/.
Now I will warn you: do not, I repeat, do not order from freecreditreport.com. It is not FREE. I don’t have all of the details, but at some point, they offer you something else free and ask you to enter a card number. Then they start debiting your account once a month for like $9.95.
One of the main reasons to order your credit reports is to get an accurate list of all outstanding debts you may have. This is important on your journey to becoming Debt Free. So once you have your list of outstanding debts, you want to work on getting them paid off through your Debt Snowball.
Following is the process of working through your debt:
1. Separate your debts into two categories: Current Debt, and Delinquent Debt. Current debt would be debt that you are making minimum monthly payments on and none of your payments are past-due. Delinquent debt is debt that you have not paid on in a while.
2. List your current debts from smallest to largest. Then attack the smallest one with every additional dollar you can find in your budget. Once that first debt is paid off, then take everything that you were paying on that one and add it to the minimum payment of the second one. Continue like this until you are done paying all of your current debt.
3. Once you are done paying off all of your Current debts, you are now ready to tackle any delinquent debts you may have. Do not call all of them at once, since you do not want them all calling you asking for money that you don’t have for them. Save up some money first, then call your first creditor and offer them about 30% of the amount of the debt. This negotiation process may take some time. But I would not offer them more than 40% of the total debt, unless it is a very small debt (like $50) and not worth the negotiation hassle. It will also help to know what your original amount owed was before all of the fees and charges were added.
4. Most collection agencies purchase batches of debts for around 10 cents on the dollar, so don’t feel like you are being unfair with the amounts that you are attempting to negotiate. They are still making money on the transaction.
5. Make sure that you get any negotiated amount in writing. Remember, if it’s not in writing, it didn’t happen. Do not under any circumstance allow these creditors electronic access to your checking account.
6. Do not wait until you need your credit report cleaned up, say to purchase a home, because then your time constraints will put you at a disadvantage when attempting to negotiate the payoff amounts of delinquent debts.
And after you have done all of this, vow to never ever go into debt again!
Peace & Blessings
Sharon
I will have more for you on Monday, April 19th! Until then keep working your plan for financial peace and freedom.
Tuesday's Blog: Rise'& her 11 kids.... "The Wampler Zoo"
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