People across the country are faced with historical amounts of financial burdens and obligations as they seek liable debt relief solutions. Though these solutions can come in many ways, managing your debt properly requires foresight and knowledge as certain debt relief options or loan types can hinder your ability to access capital in the future to do other important things such as buy a home. In many cases certain consumers are not able to qualify to buy a home because of the overwhelming weight student loans for instance add to a borrower’s debt to income ratio or because they elected to file bankruptcy. Without the ability to buy a house their capacity to grow their wealth is greatly decreased in comparison to individuals that own their homes.
The debt that an individual accumulates in their name today that reports to their credit profile will affect their ability to access capital in the future so being able to manage that debt effectively and efficiently is gravely important. When borrowing or using debt to accomplish certain goals in life one must do it knowledgeably and responsibly. Part of debt management is knowing how certain loan types affect your credit scores and/or ability to borrow more money in the future. For instance, when choosing to utilizing debt from a credit card it is important to know that the extra utilization will decrease your credit scores. By having lower credit scores certain loan types or options may be unavailable to you until you pay back down your credit cards and your credit scores go back up. It may have been possible that the use of an installment loan from your banking institution may have been a better option rather than use the credit card, as the installment loan doesn't have the same effect on your credit scores when utilized that credit card debt does. Additionally, the interest accumulated on credit card debt is far more aggressive than that of an installment loan making it a cheaper option in addition to having less impact on your credit scores.
Knowing these debt managing tips will greatly increase your ability to better manage your debt, make better decisions when entering into any future obligations and better determine what type of debt is best for your situation. Let our consultants help customize a debt management solution tailored made to fit your financial goals and take away the burden of managing your debt alone. Contact a consultant today!