This is part 2 of a 4 part series on getting out of debt quickly. Make sure that you read all four parts in order to get the most out of this sequence of hints on getting yourself or your family out of the debt trap.
Next you are going to want to try to consolidate all of your debt onto a single credit card with an interest rate that is lower than what your current credit cards are requiring for you to pay. By doing this you are going to be lowering your monthly payments dramatically while paying your credit card debt off much more quickly.
Step #3 - The third step in the process is to find out what your credit score is.
Your credit score is a really important number, because what it represents is essentially how reliable you are going to be when it comes to returning any money that you have borrowed from banks or other lending institutions. When you have a high credit score, it is going to help you qualify for things like low-interest credit card opportunities. Your score is also going to have an impact on how much money you end up paying for auto insurance, home owner's insurance, deposits on utilities, and it may even play a role in whether you can get certain jobs, rent a home or an apartment and a number of other things.
You can easily find out what your credit score is by visiting http://www.myfico.com. You can also visit http://www.creditkarma.com in order to see your TransUnion credit score for free. The number, like an SAT score, is capable of ranging from approximately 300 to approximately 800 depending on the credit reporting agency. If you have a credit score that is higher than 660 then you are more than likely in good shape. Scores over 720 are considered to be excellent. If your score is currently below the 660 point, then you are going to need to spend some time working to improve this number before you are going to be able to obtain a better interest rate on any of your loans or credit cards.
Step #4 - Next, you are going to want to track your spending and make some cuts where necessary.
For a period of thirty days or so, what you are going to want to do first and foremost is to keep a complete record of everyplace that your money goes, leaving nothing out. You can do this using a checkbook register, a notebook or a computer program like Excel or Quicken depending on what your individual needs are. As you go from one day to the next, save all of your receipts for each and every single item that you buy, even the smallest purchases, and then at the end of every day you should sit down and take the time to record as well as categorize every single expense that you make.
…Continued in part 3.
Photo credits: Jonathan Pobre
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