A lot of people spend way too much time fearing those creditors when they could, in fact, have healed the relationship long ago. Great relationships with both the bank and the creditors mean, of course, that your credit score will go up a bit – and that you’ll regain full control over your financial situation.
If you’ve been struggling with debt lately or just need a way out in order to improve your credit score, you’ve definitely come to the right place. Here is a handful of ways to sort out your finances and repair the damage so that you can start a new and blooming relationship, in the future.
It just makes it a bit easier to stay on top of things and you might even be able to get that loan you’ve been eying.
Understand Your Own Financial Situation
Before you pick up the phone, you need to have a clear picture of what you may be able to pay and how often you can make the payments. You may agree to restructure the payments, in which case you need to know how much you can afford to pay each month – keeping in mind that this will impact your future finances as well.
When you’re able to pay off your debt in a lump sum, you’ll be in a much better position for negotiating, and the creditors may agree to write some of it off. As long as they receive the amount you agree on as soon as possible, that is.
You can potentially save a lot of money this way, so take advantage of the savings you have and write off as much as you can.
Be honest when you negotiate, ask follow-up questions in case they threaten with further action such as lawsuits, and ask if taking up another loan to cover the most pressing expenses will make them more likely to write the rest off. Have a look at GetCash so that you have some backup money to negotiate with.
Build up an Emergency Fund
After this, you need to look at sorting out your finances for good so that you’re able to stick to the plan you’ve agreed to when talking to the creditors. Otherwise, you’re simply back to where you started and haven’t made much progress at all.
While it may seem like a distant dream at the moment, building up a backup fund to have in case of emergency is exactly what you need for situations like this. It’s something you need to focus on as soon as you’ve got that phone call to the creditors over with, though, and the sooner you’re able to put money aside for rainy days, the better you’ll feel about the future.
The trick is to have about six months worth of expenses saved up in case you should lose your job or have any other unexpected expenses. If this happens and you don’t have an emergency fund, you can be pretty sure that you’ll wind up in the same situation after just a short month or two.
There you have it; pick up that phone, work out a realistic plan, and you should be able to dig your way out of the debt hole eventually.