9 Effective New Ways to How to Pay Off Your Debt Fast

Have you ever gone in the desert if yes then imagine you stuck in quicksand and heads in the sand, you try to save your life, but it keeps drowning you more, you couldn’t win or save your life unless you know how to handle it and trick to know how to survive?

That is the feeling of being in debt, it can break you but never make you until you take out yourself from the hell of being debt:

When you are in debt:

You want to move to a different planet, a place full of peace and freedom of debt.

Constantly it starts mentally destroying you, 100s of sleepless nights and sounds of people who lend money on you horrifying you.

Filtering all the bills reduces the expenses and minimum payment on your credit cards.

Still, doing all those things you are capable of doing, yet not able to see a ray of hope and your finance is going out of your control every time.

Nowhere out of the box a new debt comes and again rethink about the finance.

There are ample of a reason you fall into the gravity of the debt black hole: a failed marriage, student loans, a sudden loss of income, the biggest reason for debt in the United States is medical expenses that’s why Congress keeps working to improve the medical health Care.

Remember every problem in your life comes with a solution, you need to find a way to tackle those obstacles, difficulties and I know you will do, and we are all with you, we’ll explore 8 effective ways to how to pay off debt fast.

Tip 1: Manage a budget

Create a budget. There are many ways to make a budget according to your needs not according to your wants.

At the beginning of every month take out the cash amount and distribute it, as per your requirements such as entertainment, food, clothing, and bills. If the flow of the money goes out of the bucket, then reduce the expenses and stick to the budget, because once the spending that you made goes out, then it will create problems in an arrangement.

Try to compromise a little with your lifestyle, it’s difficult but you need to do for a short time after finishing your debt, then you can continue what you were doing before.

The easiest way to make arrangement and detail of all these budget is that you need to make an excel sheet and maintain every spending according to the law that you made and commit yourself that you’ll follow the rules.

Tip 2: Debt Snowball Method

I have come across debt snowball. The basic meaning that you’re pushing or throwing the small snowball and it keeps getting bigger and bigger. It means to pay small debts first before move forward to the bigger one.

After wipe out the small debt, it will give you a momentum to continue the program, and make you feel like you won a small victory however it will give psychological satisfaction.

It is okay if sometimes priority moves to the small debts such as bill and many small credit cards loans and if you think you can pay them quickly then pay it, and erase them from excel sheet.

Tip 3: Increase Minimum Payment

Increase your payment from a different sector. I know it is easier said than done. If your debt is high, then you should attempt to raise the little money from another sector.

There are actually many ways which work perfectly well such as

  • Works more hours if you are doing a 9-6 job
  • Find out low-cost activities
  • Get a second job
  • Collect personal finance from your friends
  • Sell unwanted gift and stuff to eBay or Amazon

Paying more each month will put more towards the principle meaning of your debt faster.

Tip 4: Negotiation

Learn the art of bargaining, call the credit card company and ask for the lower rates, suppose you have 20.76% APR but you call the company and negotiate the rates up to 15.76% APR, and that’s you saved 5% on APR.

Negotiation helps in most of the buying department. Try to convince your best price is effective for the product and according to the market, the same thing can be found almost at this price. You can save money by using uber coupon for existing user during weekend trip, not much but it will definitely help you at the end of the month.

Tip 5: Cancel Subscription

Cancellation of unwanted subscription will give little help to get debt free. It also gives you an abrupt time to get more money to earn from a different stream.

Delete the details of credit cards from the online store because it may automatically deduct the money from your bank account.

Tip 6: Start a Passive Revenue

Start another way source of income and make money from doing extra work. It could be anything you want to do such as cleaning the building at night time, amazon affiliate, youtube, stock, and paid tutorial.

I am sure it will be blessed for you in the upcoming month and provide you second hand to get debt payoff, use the money for debt reduction.

Tip 7: Credit Card debt

A credit card has an advantage and disadvantage too. Many credit card users always read the advantages and forget about the limitations, and that’s the reason they fall into the hole of debt.

The average credit card debt in the United States is increasing. Below are certain points which need to avoid while using credit card.

  • A credit card is feasible for online shopping. Stop excessive shopping from the card
  • It has limitation amount to use. After that amount you need to pay with the highest interests rates
  • Credit card fraud is common these days
  • Sometimes the hidden cost you need to pay

Tip 8: Learn to invest

  • Start investing in the stock
  • Buy a property
  • Think long-term
  • Create emergency funds

Spend little time to learn and understand the law of stock. American is a significant market for investing. If you want to prepare yourself under any circumstances you need to plan an emergency fund and think for long terms. Middle class generally don’t believe in stock and consider the only negatives parts of it.

Tip 9: Avoid unwanted product

The reason that people fall in the hole of debt is lust for purchasing unwanted things. If you are tech enthusiasts you want iPhone product at every update and sell previous one with low rates, and that drives you to the debt hole and more money to pay as an EMI.

If you are passionate about such things, then I suggest avoiding for a particular time as soon as you get and free from all the debt in your life.

Why it is Important to Know Your Credit Score?

In today’s busy world, where everything is available online- be it shopping, booking a movie, looking for property etc. The payment is easily made with just swiping your credit card. But there’s something which most of us neglect, to know your credit score.

So, what’s the big deal and how do things change by knowing the credit score?

This is what you might be thinking. However, knowing your credit score can benefit you in various ways. Swiping your card is the easiest thing to do. But every time you swipe your card, your credit score changes. Every change in your credit score can significantly change your decisions. Before you know the benefits of a good credit score, you must know what credit score is and how is it calculated.

What is a credit score and how is it calculated?

A credit score is a statistical number that defines your creditworthiness. A credit score is the distilled version of your credit report. It is a 3 digit number which is calculated using complex formulas. The credit score ranges between 300 to 850. A high score represents that the person is financially trustworthy.

The factors involved in calculating the credit score are:

  • Your payment history
  • The length of your credit history
  • The number of accounts you have
  • The types of accounts you have
  • Your used credit vs your available credit

In short, your credit score not only shows how well you manage your debts but opens up to a wide range of benefits.

So, let’s understand why it is important to know your credit score.

4 Reasons to know your credit score:

 

1. Your credit score gives a clear report of personal financial health

Do you know your credit score?

You can get a clear report of your overall personal financial health just by analyzing your credit score. If your credit score is:

  •  Low credit score implies: That you have more debts which you can’t comfortable handle. Also, it implies having too many credit cards at once.
  • High credit score implies: You have handled your debts well and you clear debts on time.

Every change in your credit score gives you the idea of your changing financial situation. So, it’s essential to do credit monitoring once every month to keep a check on your personal financial health.

Check your credit score now to see know the status of your personal financial health. You can know your credit score online through multiple sources.

2. Your credit score helps you to protect yourself from frauds

You can check your financial situation by analyzing your credit history and credit report. Your credit score can show if you’re financially vulnerable from the way you handle your finances. Every late payment you make or having lots of credit, all this will be visible in your low credit score. If you’re among the people who never miss out any bill, do on-time payment, have zero debt and a small handful of credit cards then, your credit score will automatically be high. Additionally, the credit score helps you to protect yourself from frauds.

How will you know if your credit card is being misused by someone else?

In this tech-savvy era, anyone can easily misuse your credit card just by knowing your credit card number and other particulars. Credit card frauds both online and offline have become a common threat these days. So, it’s very important to be cautious when it comes to managing your credit card.

Fraudsters can buy new credit cards on your name if they know your SSN. Because of such events, your credit score can take a slide down. So, it is very essential to know your credit score and monitor every small change that happens. If you feel there’s some change in your credit score which you feel suspicious then check with your credit card provider immediately.

3. Your credit score will fetch you a discount for life

Having a good credit score can easily get money from credits or bank at good interest rates. Not only that you can enjoy benefits such as a loan with low-interest rates, get approved for a mortgage loan, extra competitive for a new job or rental property etc.

4. Your credit score shows how you can mold your finances to a better shape

Your credit score can point out mistakes and act like a coach by showing the way for better financial management. Act according to the way your credit score recommends to mold your financial future to a better shape.

Summing up:

Hope you would have understood the importance of knowing your credit score. Start evaluating how you can avail the benefits of your credit score. Also, if you feel your credit score is low then look for ways to improve it.

7 Reasons Why You Should Check Your Credit Score

85% of Americans don’t bother to think about their credit score unless they are planning to apply for a loan or credit card. There are even a few who would never have checked their credit scores at all. Obviously, it’s not those fancy numbers that attract you like your checking account, savings account or credit card balance. So, when was the last time you checked your credit score?

Many people are even in the myth that if you check your credit score then it might affect your credit. And the last category of people is afraid to check their score to avoid the unlikely outcome. However, if you check your credit score using a credit scoring service then your credit won’t be affected.

We share with you 7 reasons why you should check your credit score and how it would help you to take control over your financial situation and credit. But before that, you might want to know how often you should be checking it.

How often should you check your credit score?

Like you, the credit score may change daily based on the changes in your credit report. So, if you’re planning to apply for a car loan or home loan, then you will have to check your credit score more often(maybe 2 to 3 times a week or more) to track your credit score. Otherwise, you can check it somewhere between monthly to semi-annually.

7 reasons to Check your Credit Score:

#1. Reality check on where you stand financially

Your credit score reflects your overall financial health. So, to know where you stand financially and how your credit is (good or bad), you need to keep a track on your credit score.

It’s not the end of the world if your credit score is bad, you can look for ways to improve it. If it’s good, then you can always maintain it.

#2. Know the factors influencing your credit score

Once you start tracking your credit score, you will learn to differentiate between the impact caused by every decision you make. How opening a new credit, clearing debts or paying off balance influences your credit score. You can be prepared in advance before you apply for a major loan as you would know what steps to avoid from affecting your credit score.

#3. You have the control of your application outcome

Knowing your credit score can help you from getting denials or unfavorable outcome of an application. As you can work out on your credit score before you put in your application.

#4. Track the changes

You will have the transparency to view any changes in your credit rating and the factors affecting your credit score. If you notice that your credit score is gone low, then you can analyze the report to find out why and how you can act towards it.

#5. Check for the offers and best rates you’re eligible for

Once you track changes and see that you have a good credit score, then you can look for the offers you’re eligible for. You might be eligible for better interest rates, offers, higher limit, and other perks. When you have a good credit score, you can negotiate with your current credit card provider to lower your interest rates. Alternatively, see options to apply for for0% balance transfer credit card with your credit score to qualify your eligibility. Some credit card providers offer you to upgrade your credit when you qualify for a higher credit limit. Also, there are chances of getting approved for a home loan easily when you have a good credit score.

#6. Check the credit report information for accuracy

Make sure that the information in your credit report is accurate every time you check your credit score. Your credit score reflects your credit history, open or closed accounts, credit limits etc. So, any discrepancy in the information can lead to a serious issue. If you notice that credit score is less than you expect or any other changes lately, then you might need to report the error to the credit bureau for further action.

#7. Shape up your credit score

Good or bad, your credit score is going to reflect a lot about you such as the decisions you make, how well you manage your finances, are you eligible for a loan etc. You can be prepared to apply for a loan if you keep your credit score in good shape. This can be done by checking your credit score often.

Summing up:

Once you have understood the reasons why you should check your credit score, you should start checking it every now and then. You can monitor your credit score and if you feel it needs improvement, then you can start working on it.

How to check your credit score for free in just few minutes?

The credit score is an essential factor that defines your financial health. It not only reflects your overall financial situation but also shows how every decision you make affects your credit and financial future. More important than “how to check your credit score” is to know where to check your credit score.

There are 4 things to consider when it comes to understanding your credit. Here are the 4 important steps to consider before you take a further step towards your credit score.

#1. How to check your credit score?

Most people pause at this question “How to check your credit score?” and almost majority of them are not sure if there is a free service available to access your credit score.

There are various sources available where you can check your credit score for free and even access your entire credit report. You don’t have to allocate some time especially to check your credit score, the process is very simple that you can just do it in a few minutes.

Let’s look at how to check your credit score for free and that too in just a few minutes.

How to check your credit score in just a few steps:

  • Choose a source to check your credit score (few are listed below #2)
  • Decide if you want to check your credit score for free or pay a small amount for it.
  • Pick the source based on your requirement: credit score only or credit score + credit report
  • Sign up on their website to access your report.
  • While signing up, you will have to fill your basic information to confirm your identity and once done you can access your credit score in just a few minutes.

Tip: As it won’t take much of your time, you can even do it while traveling or in your lunch break.

#2. Where to check your credit score?

The most important thing is to use the correct source to check your credit score. Each source uses different data to calculate the credit score and thus might vary. Although the variation will be small but getting an accurate credit score is what matters the most. Some credit scores are updated very frequently than others. So, if you’re planning to apply for a major loan in a few months then it is recommended to keep a track of your credit score daily. As you will be able to get the insight of what the creditors and lenders would be looking at when it comes to your loan application.

We share with you some standard credit source providers that offer you an accurate credit score.

List of Credit score providers:

Credit Reporting SourceFee (if applicable)Free Entire Credit Report Provided?Updating Frequency
Credit KarmaFreeYesWeekly
Credit SesameFreeNoMonthly
QuizzleFreeYesEvery 3 months
MintFreeNoEvery 3 months
MyFICO.com$19.95/monthYesMonthly
DiscoverFreeNoMonthly
AARP$12.99/monthYesMonthly
Experian$21.95/monthYesMonthly
TransUnion$19.95/monthYesMonthly
Capital OneFreeNoMonthly
WalletHubFreeYesDaily
Equifax$19.95/monthYesMonthly

Take your financial journey to the next level by following one of the above sources to monitor your credit score and credit report.

Tip: Most sources such as Experian, Equifax etc. that come with a monthly fee, also offer a 7-day trial for $1 or more.

#3. Why you should check your credit score?

The next most important thing is to understand the benefits that come along when your regularly monitor your credit score. Here’s the reason why you should check your credit score:

  • Gives you an insight into your financial fitness and the factors affecting it as well.
  • You can know about the best interest rates and offers you’re eligible for and thus reduces your swipe into rejection probability.
  • Oh, and don’t forget about the credit rating comparison-if its excellent, good or bad. You can track your rating and find ways to boost it up before you apply for a home loan or new credit card. Having an excellent score can pitch-in more offers and better rates.

#4. Extra tips on credit score

Decide if you really want to pay to check your credit score as there are various free options available. Instead, work on fixing up your score to get better rates and boost your eligibility for loans. Learn to manage your credit card wisely so that you can always maintain your credit score on the positive side of the numerical range.

Summing up:

Just knowing how to check your credit score and working on ways to improve or maintain it are 2 different things. We have listed the important credit reporting sources for you to get the accurate credit score. Keep monitoring your credit score to understanding in which direction your financial future is moving.

What is my Credit Score and How to Estimate it?

Finance management is an essential part of our lives and most everyone looks for a way to improve it. Some people are just born with the skills and others embrace reality by learning the knacks of finance management. And before we jump into “What is my Credit Score?” and other important questions, let’s understand what it really means.

The Definition!

The FICO Credit Score is a numerical expression that determines how well you handle your money and where you stand financially. In simple words, it’s a reflection of your overall financial wellbeing.

What is my Credit Score?

The FICO Credit Score is a key factor in your financial journey. It is a number which falls on a scale of 300 to 850. Higher your score, better it is. It is determined based on the details in your credit report which has your credit history, loan repayments, new credits etc. All these factors along with other key factors play a vital role in determining your credit score. This gives you the answer to “What is my credit score?” so let’s proceed into building your understanding of how to determine it and the factors involved.

Let’s get to the 4 important aspects of credit score. Now that you would have understood it by definition, let’s throw some light on how it is calculated.

#1. How Your Credit Score is calculated?

Here, we are referring to FICO score when we are talking about credit score. There are other credit scoring models available but among them, FICO is widely used. The three major giants in the industry: Experian, TransUnion, and Equifax calculate the FICO score in different ways and thus your score can slightly vary.

The actual formula to calculate the FICO score is a well-kept secret but knowing the factors involved to determine your credit score can help in understanding it better.

#2. Key Factors that determine your credit score:

“What is my credit score?”Let’s break your credit score into the associated key elements.

Your FICO Score is calculated based on the following five factors:

  • Payment History

Your payment history accounts to 35% of your credit score. Your payment history is the first thing that any money lender would like to check. As it gives all the information whether you’ve paid all the credit accounts on time.

  • Your debts and other amounts you owe

The amount you owe accounts to 30% of your credit score. It shows the debts you owe, your credit limit, loan balance etc.

  • Length of your credit history

The length of your credit history accounts for 15% of your credit score. The longer you’ve established your credit account will reflect as a better score.

  • Types of credits

The types of credit you hold/ held in the past accounts for 10% of your credit score. The different types of accounts you use such as credit card, mortgage, auto loan etc. is a factor that determines your creditworthiness. It simply shows that you are capable of handling multiple accounts responsibly.

  • New credit

Your new credit accounts for 10% of your credit score. It focuses on the new inquiries and how many new credit accounts you hold. The lesser the better.

#3. Excellent, Good & Bad Credit Score:

What is my credit score- excellent, good or bad?

The FICO score ranges between 300-850 and most people maintain their scores between 500-850. It depends on the purpose you’re looking at such as for a loan or credit. If you’re planning to put an application for a major loan, then you need to maintain a score above 700 to get you the approval and best rates. Different lenders fix different cut-off points and on a general basis the scores are classified as:

  • Below 580 – Poor
  • 580 to 669 – Fair
  • 670 to 739 – Good
  • 740 to 799 – Very Good
  • 800 & Above – Excellent

#4. How to Estimate your Credit Score?

You can’t estimate your credit score unless you check it. Your credit card provider might offer a free credit score (along with the credit report) with your monthly statement, but you might not know which scoring method would your lender use to calculate the score. To be on the safer side you can try calculating in all the 3 ways by using Equifax, Experian, and TransUnion.

There are lots of websites that you can use to estimate your credit score more accurately. All you need to do is enter a few sets of information and get your score in just minutes.

Summing up:

Checking your credit score can help you to know about your financial management and how your decisions impact your finances. Keep a check on the factors that influence your credit score to be on track. Here’s a link for “Check my credit score” online.

How to Check Your Credit Score for Free in just five Minutes?

When was the last time you checked your credit score?

You might be thinking why it is even necessary to answer this question but believe it or not your credit score is something that indirectly influences your major financial decisions. If you have a good score then you can avail all the benefits such as easy loan approvals with lower interest rates, lower your auto insurance premiums, get qualified for a new credit card with higher limit etc. Knowing your credit score can fetch you all these benefits & more.

However, it can be a bit baffling and sometimes expensive to get access to your credit score. It would be a piece of cake if you have a basic understanding of what a credit score is and where you can check your credit score for free.

What is a credit score?

A credit score or FICO score is a numerical expression (ranging between 300 and 850) that defines your creditworthiness, and this is the reason for most lenders to ask for your credit score.

Most Americans fall into the category “good” with an average of 700 as the credit score. Let’s understand more about the credit score numbers:

Credit Score RangeCategory
550 & BelowBad
550 to 649Poor
650 to 699Fair
700 to 749Good
750 & AboveExcellent

There are a few things you need to consider while checking your credit score such as:

  • Is it calculated using a FICO formula? (as not all credit scores are calculated using FICO formula)
  • What credit bureau data is used to calculate your credit score?
  • Is it free or charges a fee?

There are three main credit reporting agencies namely Experian, Equifax and TransUnion and each of them uses different data of yours to generate the credit score. Although, the difference would be significantly small in terms of the final credit score and in case if you have time you can try checking all the three.

It can be a difficult thing to predict which source the lender would use to evaluate your credit score before offering you a loan. You can access your free credit report for one or all the 3 from www.annualcreditreport.com.

How to check your credit score at 0 cost?

Some of the credit score providers update their score weekly, monthly or once in 3 months. It is recommended to check the latest score accordingly to get the most accurate results. Credit Karma is one of the source providers where the credit scores are updated on a weekly basis. So, if you’re planning to apply for a major loan then check the most recently updated credit score to know your chances of getting approved for the loan.

Following are the providers to check your credit score for free(or for a small amount):

Credit Score ProviderCostFree Credit Report available?
DiscoverFreeNo
Credit KarmaFreeYes
Credit SesameFreeNo
Capital OneFreeNo
MintFreeNo
WalletHubFreeYes
MyFICO.com$19.95 per monthYes
Experian$21.95 per monthYes
Equifax$19.95 per monthYes
ChaseFreeYes
CitiFreeNo
American ExpressFreeNo
BarclaycardFreeNo
Bank of AmericaFreeNo
QuizzleFreeYes

Why your FICO score is so important?

Your FICO score plays a vital role in defining your loan affordability, the credit limit on new credit cards, interest rates on mortgage and auto loans and even your job. In general, your credit score affects all your credit and lending decisions which imply that you need to check your credit score before you take a major financial decision.

If you check your credit score often then you will be aware of where you stand financially. It would give you a fair idea of whether you’re ready to apply for a loan. Checking your credit score would give you a chance to improve your credit score and get approved for a loan easily. Now that you know how important it is, let’s look at the sources where you can check your credit score for free.

Some sources even offer a free credit report along with your credit score. A credit report would give you a better insight into the factors that are influencing your credit score. Once you start analyzing your credit report, you can look for ways to improve your credit score before you take that big financial jump.

Summing up:

Checking your credit score often can keep you updated with your financial health and it is recommended to check your credit score and report at least once in12 months. If you’re planning to apply for a new credit or loan, then you should check it more often from one of the free sources listed above.