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The Steps to Good Credit – Credit’s Do’s and Don’ts

Posted on June 1, 2015September 28, 2018 by

The Dos and Don’ts to Good Credit

Your credit score is the most important number in your life. It can determine whether or not you will be owning a new home, driving the car of your dreams, or even securing that new job you just had an interview for.

Having a good credit score can lead you to a long enjoyable lifestyle…. But having a bad score can feel like you’re trapped inside a terrible nightmare.

If it’s one thing I’ve learned working in this business, it’s that credit is confusing and always changing. Back in March, the Credit Reporting Agencies made an announcement regarding new ways to report medical debt and disputed accounts. This change will benefit most Americans, especially those plagued by medical debt.

In an industry that’s consistently changing, how can a consumer know how to obtain a positive credit score? The general public is uneducated when it comes to credit and most are even unaware of their own scores. Well, you’re in luck! I’m here to give you the basic steps to good credit:

DO: Secure different trade lines of credit.

The first rule for the steps to good credit is to secure different trade lines. The more types of credit you have, the better your score will be (assuming the accounts are in good standing.) Ten percent of your credit score is determined by the different types of credit used. That doesn’t mean go out and start applying for as many accounts as you can (that will hurt you.) What that means is the credit bureaus like to see variety. A consumer with a mortgage, a few credit cards, student loan, and auto loan on his/her report should have pretty good credit score (again, assuming all accounts are in a good standing.)

DON’T: Close Out Old Credit Cards

“I’ve had this card for years. It’s old, and I just got a new one should I close this out?” The answer is NO! Old credit cards aren’t like old TVs or computers. You shouldn’t close them just because they are old. In fact fifteen percent of your credit score is based upon credit history. Closing old accounts can instantly decrease your credit score. If you have an old account you no longer use, you’re better off waiting for them to become inactive rather than closing them out.

What Determines your credit score? (Source myfico.com)

DO: Use Credit Cards Regularly

Not long ago I met a gentleman who told me he only opens up credit cards to boost his credit score. He never uses them, just opens them up and locks them away.

While this may improve the score a little, his score can be substantially increased if he actually used the cards. A recent study from Credit Karma shows an average score of 692 for consumers that hold their cards at a zero balance. The same study shows average scores of 753 for consumers who used 1-10% of their credit limit, and 715 for those who used 11-20%. Which brings me to our next “don’t”…

DON’T: Go Over 20% of the Credit Limit

The bureaus want to see you using your cards, but they don’t want to see you overusing them. This is also a good strategy for your wallet, as the more in debt you go, the more interest you will pay.

It’s easy to start charging away on your credit card and not realize where your utilization lies. Stay on top of your balance. Make sure you budget yourself and keep track of where your account is at. In the same Credit Karma study mentioned above, the average credit score is 563 for consumers with maxed out cards.

Avg Credit Utilization Ratio (Source CreditKarma.com)

DO: Pay More Towards Accounts

Any type of loan will have you make monthly payments. Do your best to pay more than the minimum. While making minimum payments won’t necessarily hurt your credit score, you’ll get a score boost if you pay them off in a timely manner.

Making minimum payments will cause you to pay more interest, which is money you could be saving. If the minimum payment is all you can afford at the moment, then there’s not much else you can do. When you do come into some extra cash, put it towards your debt. The quicker your debt is paid off, the quicker you’ll have some extra dough.

DONT: MAKE LATE PAYMENTS!

The most important Don’t on the list! Making a late payment with drop your credit tremendously and will remain on your report for up to 7 years. All derogatory accounts start with just one late payment so make sure you pay everything on time.

In today’s fast paced world it’s easy to forget when payments are due. It’s always a good idea to setup payments through autopay. Just double check to ensure the payments go through. If you’re not doing autopay, set reminders for yourself to pay. One late payment is all it takes to destroy your credit score.

DO: Monitor Your Credit

Always keep a watchful eye on your credit. Credit monitoring can alert you to any new accounts that will appear on your report. If you see something fraudulent, report it to the bureaus and the FTC immediately. It’s easier to get a recent mistake removed rather than a lingering old mistake.

DONT: Assume Your Credit is Fine

1 in 4 consumers have errors on their credit reports. Most consumers aren’t even aware of what is on their report. Get a credit report and find out what is on it. If you need help reading the report, consult a credit expert like the ones at Better Qualified. They can tell you exactly what is on the report and provide you with the steps toward better credit. They also specialize in removing negative items from credit reports. Don’t just assume your credit is doing great. Make sure you know what is being reported!

If you follow the steps to good credit, your score will increase tremendously. If you need help getting your credit back on track, just ask! We’ll provide you with a free credit analysis, go over your report with you, and determine what actions need to be made to improve your credit. Just fill out the form below:

Get a Free Credit Analysis From a Credit Expert

IRS Security Breach: What You Need to Know

Posted on May 28, 2015June 3, 2021 by admin

tax_form_money_Pencil

The recent IRS security breach it shouldn’t come as a surprise. After all, the IRS has paid out $5.8 Billion in fraudulent refunds from 2011 through 2014. Yes, you read that correctly, Billion with a “B.”

So how could this happen? You would think the government of all organizations would have enough security to keep our personal information private. Unfortunately that isn’t the case. Hackers used the IRS’s own website in attempt to steal taxpayer information for around 200,000 households, about 100,000 of which were actually affected. The thieves used stolen data to get past verification questions on the IRS website, giving them access to old tax transcripts. They then filed for fraudulent refunds.

If You Were Affected, You Will be Notified

The IRS will be sending out mail to all 200,000 accounts. If your account was affected, you will know. The IRS WILL NOT be asking for any personal information from you. If you receive any letter, email, phone call, or anything asking for your personal information, it is most likely from a con artist. Conmen strive on these types of situations, so don’t divulge any of your personal information to anyone! If you do believe you had fallen victim to this breach, or any other form of identity theft, read on below.

Ways to Protect Your Identity:

Credit Monitoring

While the IRS is offering free credit monitoring to all who may have been affected, there is a good chance your identity has already been stolen. If you have fallen victim to any sort of identity theft, credit monitoring is a necessity.

Credit monitoring will notify you if someone attempts to open an account in your name. This way you can contact the accounts and immediately clear things up. The quicker you act on fraudulent activity, the better chance you have to bounce back from it.

(If you are interested in credit monitoring, Better Qualified is offering 3 months free through SmartCredit. Just click here.)

Security Freeze

One of the best ways to protect your credit is to call the bureaus and ask to have a security freeze put on the report. The security freeze will halt your account from being pulled when applying for credit, making it harder for thieves to open lines of credit in your name.

Security freezes cost anywhere from $0-$10 depending which state you live in. Most states will offer free security freezes for those who fell victim to ID theft.

I know what you’re thinking, “How will I be able to access my own report if I have a security freeze on it?” If you need to pull your report for an application or service, all you would need to do is call up the bureaus and get the freeze temporarily lifted or give access to certain businesses that will allow your credit to be pulled.

Fraud Alert

If you don’t want to put a security freeze on your report, you may place a fraud alert on your credit report. Fraud alerts are similar to security freezes. Fraud alerts are free and will give you a free credit report. Fraud alerts will remain on your report for 90 days (you can always renew it once the 90s days is up.) When you have a fraud alert on your report, a business must verify your ID before issuing credit. This will force the business to contact you and make it harder for the thief to open a new account.

To place a fraud alert on your report, just simply call one of the 3 credit bureaus and tell them you wish to do so. By law, they must contact the other 2 bureaus and let them know you have placed a fraud alert on your account. Although the fraud alert is free, you will have to provide proof of your identity.

Don’t Assume Your Credit Report is Fine

When was the last time you checked your credit? Do you currently have a credit monitoring service? One out of four Americans have incorrect information and accounts on their report. Hire an IRS audit accountant to make sure your account is reporting correctly.

Credit reports can be hard to read. If you don’t know what you’re looking at, have a credit expert look for red flags in your report. The consultation is free. Just fill out the form below.

Kansas City Woman Awarded $82 Million In Debt Collection Case

Posted on May 26, 2015December 14, 2020 by admin

Maria Guadalupe Mejia

A Jackson County jury ordered collection company Portfolio Recovery Associates LLC to pay $82 million dollars to KC resident Maria Guadalupe Mejia. Mejia had this debt mistakenly attached to her by Portfolio Recovery. The actual debt holder was a man with a very similar name.

Portfolio Recovery had failed to hand over documents requested by the judge regarding information in the case.

Portfolio Recovery Associates LLC is one of the largest debt buyers in the USA. “This company has gained a reputation for take no prisoners, ‘If you mess with us we’re going to take you all the way, you’re going to have to spend a lot of money on this litigation, you’re going to have to go all the way to trial,'” said Gina Chiala, one of Mejia’s attorneys according to KCUR. ““And so, among consumer lawyers, they are known to be very aggressive in litigation and to not stop; even when they’re wrong, they’re just not going to stop.” If you need to contact good lawyers, call the Noonan Law firm.

The jury determined damages and Mejia was awarded $251,000 and $82,990,000 in punitive damages for malicious prosecution.

Portfolio spokesman Michael McKeon said “We hope and expect the judge will set aside this inappropriate award, and we plan to file motions to make the request formally in the very near term. Any fair reading of the facts of this case makes plain that a verdict of this size is not justice by any means and cannot stand.”

“I am so thankful to the jury for giving me and my family justice. This should not happen to anyone, and I hope the jury’s verdict will stop Portfolio from doing this to others.” Said Mejia

According to Credit Karma study, 1-in-4 or 25% of Americans have credit reporting errors. Mejia was just one of the many victims.

Get a Free Credit Consultation from a Credit Expert

Don’t assume your credit report is fine. If you are worried that you may have incorrect information reporting on your credit report, have one of Better Qualified’s credit expects take a look and go over your report with you.

5 Reasons To Consider Business Credit

Posted on May 21, 2015September 28, 2018 by

Consider Biz credit

If you own a small business you may want to consider building your business credit. Owning a business is a struggle in itself. How can any new business expect to grow with limited resources and finances? That’s where business credit comes in.

Business credit can help take your business further by providing the financial means your business needs. Here are just a few reasons to consider business credit:

1. Separate Business & Personal Finances

Crossing your business finances with your personal finances can be a real headache. Throw in bookkeeping and tax information and now you’ve got a recipe for stress. Personal finances should not be a part of your business finances and vice versa. Business credit makes it easy to separate the two. With business credit, all of your business expenses will be under your business credit tradelines and not on your personal Visa Card.

If your business is incorporated, it is imperative to avoid mixing personal finance with business finance. If you fail to do so, your legal protection by act of incorporation is voided. This means if your business is ever sued, you will be sued as well. This can and will be devastating to your credit, especially if you don’t have the funds to handle the lawsuit.

2. No Business Tradelines on Personal Credit Report

If you don’t have business credit, chances are most of your business expenses are charged on your personal credit cards. Most new business owners rely on their personal credit to kick start their business. This usually results in a huge drop in personal credit score and a serious amount of debt.

Lenders will use your DTI ratio (Debt to Income) to determine how much you can responsibly borrow. This means your mortgage, car payment, and other personal debt may hinder you from getting the loan your business needs. By using business credit you can obtain a loan with a clean slate.

As the first reason states, separation is key! What if there was a way to keep your business credit on your business credit report and off of your personal? Well, there is. The first thing you would need to do is establish business credit. Once your business credit is established you may begin to open new tradelines using only your business credit, taking your personal credit out of the picture. This removes you from any personal guarantee (no social security number) and puts the account only under your company’s name (Tax ID number.)

3. Financial Cushion

Eight out of ten new businesses fail within the first 18 months. That’s 80%! You can search for the reasons why small businesses fail and you’ll find the same answers. One of the most common is the lack of funds.

Success doesn’t happen overnight and sometimes it takes time to establish your brand. You can have a great service or product but if the money runs out it’s time to close up! Established business credit can supply your business with the loans and tradelines it needs to grow. Giving your business more time to flourish.

4. Tax Benefits

Certain business tradelines and most business credit cards will allow you to write off any interest you pay towards the account. While it is ideal to pay off your balance every month, it is good to know that the interest is tax deductible.

5. Sign-Up Rewards

With established business credit your company can obtain business credit cards. Most business credit cards will offer bonuses and rewards upon opening a new account. These rewards can be redeemed for travel and cashback. Use the rewards to obtain more resources for your business so you can grow.

Free Business Credit Consultation

Interested in Business Credit, but don’t know where to start or what steps to take? Fill out the form below and we’ll have one of our Business credit analysts give you a call.

Credit Tip: How to Get a Quick Boost in Score

Posted on May 19, 2015September 28, 2018 by

Pay Down Your Accounts

If it’s one question we get asked often, it’s how do I increase my score the fastest way possible?

First we must understand how your credit score is generated. Your credit score is determined by different factors. One of those factors is your amount owed. If you can pay down your accounts to 30% or lower of the high credit limit, your amount owed will decrease, and your score will raise significantly.

It’s always a good idea to keep your credit utilization low. Maxing out your cards will definitely hold your score back. Credit bureaus want to see consumers using their credit cards, but not overusing them. Use your cards, but don’t max them out. Maxing out your credit cards is almost as bad as making a late payment. However, you can recover quickly from a maxed out card just by paying the balance down. Late payments can take years to fix.

If you would like a free credit analysis, fill out the form below and a credit expert will contact you shortly

Fill Out the Form for a Free Credit Analysis

Paying Off Old Collections

Posted on May 11, 2015September 28, 2018 by

Can Paying off Old Collections hurt you?

The short answer is… Yes.

Paying off those old collections seems like a great idea, your credit score may decline if you pay a collection that is older than 2 years. When you pay off a collection that has been lingering on the report for some time, the date of last activity may change, causing the account to appear fresh. Your credit report will take the hit and your score will drop.

Always try to pay your accounts on time. If you are like many Americans who have had an account fall to a collection, make an attempt to settle it as soon as possible. If the collection remains unpaid for more than 2 years, paying it will result in a decline in your score. Your best option would be to consult credit professionals.

3rd party collections must abide by certain standards set forth by the Fair Credit Reporting Act (FCRA.) If collection companies go against the FCRA, then your collection may be in violation. Violations can result in the collection getting removed from your account, and in some cases, a cash settlement for you!

Better Qualified has a team of attorneys looking through all of our client’s collections for violations. If you were looking to pay an old collection, first find out if you can get the collection removed before it effects your credit score.

Fill out the form below for a free credit analysis.

Huge Credit Report Overhaul: Medical Debt to Weigh Less

Posted on March 9, 2015September 28, 2018 by

Medical Debt

It will be announced today that the 3 credit reporting agencies (CRAs) will be making some serious changes to the way they report your credit. After long meetings between the New York Attorney General’s office and the CRAs, decisions have been made to change the reporting of medical collections and the process of consumer disputing.

I know what you’re asking… “What does that mean and how does that benefit me?”
Here’s what you need to know:

Medical Collections

Countless times have I heard client’s horror stories: Their insurance company was late paying their medical bills, and now they have a medical collection reporting on their credit.

While medical collections won’t directly hold you back from obtaining a loan, they will bring your scores down which can indirectly affect the loan officer’s decision to get you approved. This new announcement ensures that medical collections cannot report on your credit until 6 months after your debt becomes delinquent. This allows those slowpoke insurance companies time to to pay off your debt before it hits your credit. The announcement also states that once the debt has been paid off or satisfied, it will be removed from your credit report. Soon the days of lingering paid medical collections will be long gone and your scores will improve!

New Consumer Disputing Process

Consumers who choose to dispute items on their credit report will now receive more information pertaining to those accounts. If the person disputing does not agree with the results they should receive, the CRAs will include actions each consumer can take.

The CRAs will have trained professionals examine and review all consumer disputes to ensure no mistakes will be made.

“The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumers’ credit reports. This agreement will reform the entire industry and provide vital protections for millions of consumers across the country,”
-New York Attorney General Eric Schneiderman

According to Credit Karma, 25% of consumers have credit report errors on their report. It’s no secret the CRAs are in a mess right now with consumer information. This new disputing process looks to fix the mess and help consumers eliminate incorrect information.

Changes will be implemented over the next several months in New York and nationwide within the next several years.

6 Steps to Handle Identity Theft

Posted on March 3, 2015March 4, 2021 by admin

ID-theft

You’ve seen numerous web pages and blogs about what you can do to prevent your Identity from being stolen, but what are the steps you can take if you are already a victim of identity theft? Approximately 15 million US residents have their identities stolen each year. Stats like this make identity theft the fastest growing crime in the country. Although there may be an infinite number of steps you can take to prevent it, sometimes identity theft is inevitable. So what do you do if you are a victim of identity theft?

1. Monitor Everything

From now on, make sure you monitor and document all contact that is made between yourself and your financial institutions. Every phone call needs to be recorded or written down and documented. Every email, saved and archived. Every letter or document you receive in the mail must be put away and kept in a safe place. This way you can keep track of all of your accounts, who you talked with, and when.

2. Fraud Alert

Immediately after you realize you have been a victim of identity theft contact fraud lawyers Melbourne and call one of the credit bureaus (numbers listed below.) Explain the situation to them. Tell them your identity has been stolen and you wish to put a fraud alert on your account. Confirm with them that they will contact the other 2 bureaus as well.

With the fraud alert, you will receive a free credit report. The alert will remain on your account for 90 days (or more if you wish to extend it.) Now every time credit is applied for in your name, the report will come back with a fraud alert. The applicant will be asked security questions and/or to provide proof of identity in order to become approved.

Equifax: 1-800-525-6285

Experian: 1-888-397-3742

TransUnion: 1-800-680-7289

3. Contact Your Accounts

Contact all of your financial accounts and let them know you had fallen victim to identity theft. Tell them you had already placed a fraud alert with the credit bureaus. Make sure your accounts are all where they need to be. If some money is missing or something seems off in one of your accounts, make sure you notify them as soon as possible.

Change all of your passwords and pins. Try not to use the same password for every account. This can make it really easy for your identity thief to log into all of your accounts. If need be, close old accounts and open new ones.

4. Call the Federal Trade Commission

The FTC processes complaints by consumers who have fallen victim to identity theft. The FTC will provide you with the necessary steps you need to take in order to resolve your identity theft issue. You may also fill out the FTC’s online form.

After completing your call or online form, you will be given a report called an Identity Theft Affidavit. Take this report to the police station for our next step.

5. File a Police Report

With your Identity Theft Affidavit in hand, go to your local police station and file a police report. It is very important to always file a police report if you believe your identity has been stolen. Although the chances are extremely slim to none that the police will catch the responsible party, the police report can help you in the future when dealing with creditors or financial institutions. After you file your police report, make sure you make a copy for yourself.

6. Get Credit monitoring

If you don’t have credit monitoring by now, get it! Credit monitoring is the best way to stay on top of your accounts and help prevent ID theft from happening. Just because you make have had your identity stolen once before only makes you more liable to have it stolen again. Make sure you are on top of your accounts.

Luckily for you, Better Qualified is giving away 3 months of credit monitoring for free! Our credit monitoring service includes a free credit report and free money manager. Just click the link here!

How to Stop Collection Harassment

Posted on February 25, 2015September 28, 2018 by

Stop those pesky collections from interrupting your life!

There’s nothing more annoying than coming home after a long day of work only to be bothered by pesky collection companies. They call your home, your relatives, and workplace. They flood your mailbox with their notices. This kind of treatment can leave you drained and stressed. Often you might think you’ll never be able to get out of this mess. Well I’m here to tell you, you can stop collection harassment today!

First, you must know your rights. Instead of of dodging the calls only to be pestered later on, confront them. There is an easier way to deal with the calls and mail rather than just ignoring them and hoping they’ll go away (they won’t).

Know Your Rights

According to the Fair Debt Collection Practices Act (FDCPA) there are a certain standards that collectors must comply with when attempting to collect your debt. If a collector violates these standards, the collection company may be subjected to a fine, removal of account, or a cash settlement for the consumer.

Collection companies are prohibited to call before 8am or after 9pm
Cannot call you at work if your employer doesn’t allow
Collection companies cannot lie
Cannot use obscene language or insult you
Cannot make demands to pay more than the debt owed
Cannot pretend to be an attorney
Cannot claim the papers they send you are legal forms if they are not
Cannot threaten to sue unless this threat is followed up

Pay the debt if you know you owe it and you can afford it

The first time you speak to the collection company, you can get a good idea of where the debt is from and how much is owed. If you know the debt is yours, and you can afford it, feel free to go ahead and pay it off. This will get you out of debt and stop collection harassment. If you think the debt is not yours, is a wrong amount, or simply cannot pay it, then you will want to start with a cease and desist letter.

Cease and Desist Letter

After talking to the collection company and telling them you cannot/will not pay this debt, they will continue to contact you whether it be by phone, mail, email, you name it. Your first step to get this burden off of you is to write them a cease and desist letter. When collectors receive a cease and desist letter, they must stop contacting you for the debt. Send the letter certified mail with a return receipt. This will give you the documentation needed to show the collector had received your letter.

Now the collector may only contact you to acknowledge that your letter had been received, or to inform you that they will be suing you for the debt. The phone calls and excess mail will stop now. Do you feel that? that’s the stress starting to lift already (but it’s not over yet!) Just because you are not longer falling victim to collection harassment, does not mean the debts are gone.

If you need a Cease and Desist letter format, download one from us for free here!

What if I don’t owe any money?

IF you feel that the debt is not yours, or that the amount is incorrect, send the collection company a letter stating so. These letters must be sent 30 days after you receive the validation notice. If the collector responds with a verification of debt (like a copy of the bill) they may begin to contact you again. If this happens it will not stop collection harassment, and you may have to send them a cease and desist letter (See Above)

What happens if I don’t pay the debt?

Aside from this account sitting on and destroying your credit, if the debt remains unpaid the collector can file a lawsuit against you. This can results in a judgment being entered against you by the court. After you get hit with a judgment, your wages may potentially be garnished either from your bank or your paycheck.This ordeal is court ordered and will continue to happen until the account has been paid off.

Judgments are serious! If you receive a summons, make sure you respond to it either through your attorney or personally.

Better Qualified legal help

Instead of going through the hassle to get an attorney, Better Qualified has a legal team to work with your collections as soon as you enroll to stop collection harassment. Our attorneys will send out validation of debt letters and look for violations in the collection accounts. If violations are found, the collector accounts will be removed, erased from your credit report, and you may be subject to a cash settlement. It’s all included in your service with Better Qualified!

New Years Resolution: Get Out of Credit Card Debt

Posted on January 16, 2015September 28, 2018 by

images

It’s a new year and that means everyone is off to an inspiring start on their new years resolutions. You may already have your plan in effect to lose weight, get fit, and aim for that new promotion, but what are you doing about the pile of debt you racked up over the holidays? It’s well worth noting that only 8% of the population will be successful in their new years resolutions (according to the trivia flip calendar on my desk.)

While you pay the minimum balance on your credit card accounts, that debt is going to continue accruing interest and take you years to pay off. Wouldn’t it be nice if you started to take control of it today before it controls you? (And if it already does, I can help.) Here are a few tips to live by to get your mountain of debt in order.

Find out what is on your credit report

You would be surprised at the amount of people who have not a clue as to what is reporting on their credit report. Most people aren’t even sure how much debt they are actually in. They may say its one number when it’s actually much more. Your first step towards paying off your debt is to find out how much of it you have. You’re going to need to get a credit report. You can obtain one by visiting www.annualcreditreport.com. They will give you one free FICO credit report every calendar year. You may also go with free online sites like Credit Karma or Credit Sesame. However, the free online sites only pull from one bureau and their scores are not FICO. (For more on FICO vs FAKO, read our past blog here.)

Once you get your credit report make note of all of your debt. Write it down and add it up so that you know just exactly how much debt you are in. For some of you this may be devastating, but don’t worry, look at it more like a goal to obtain and keep you mind focused on the end result.

Make a budget

Now that you can see how much debt you are in and how many bills you have to pay, it’s time to make a budget. Study your past bills and bank statements and write down all your necessary living expenses. This includes: Rent or mortgage, utility and credit card bills, car payments, ect. Make sure you’re paying everything on your credit report on time so that your accounts don’t fall into the negative.

Be realistic with yourself and cut out any unneeded expenses. Goodbyes are never easy, you may have to start making some sacrifices. Cook meals at home and bring lunch to work instead or dining or ordering out. It may be a good time to cut Netflix, HBO, or any of those other premium channels out of your life (you’ve already watched everything good on there anyway.) Once you get rid of all your unused subscriptions and services, you may find yourself with much more money than expected. Those $8/month subscriptions really add up when you have a bunch of them.

Try for better rates

Most of the population today takes whatever is given to them without asking any questions. I’ve found that you can actually go far and get more out of life by simply calling and asking for it. If you get denied, you’re in the same position you were in before. Some of your credit cards may be impossible to pay off simply because their rates are too damn high! If you can get a better rate on the card, then why pay more money if you don’t have to? Try calling up each of your credit card accounts and asking them to lower your rates. Just make sure you prep yourself and do your research. You may want to find out what the prime rates are for that card. If you’re unsure of how to ask, try doing what Sally from creditcards.com did here

Apply for 0% balance transfer cards.

As stated before, the interest rates may be too close to the minimum payment on your card. This will take forever to pay the account off if only making minimum payments. Most large credit card companies will offer 0% balance transfer cards, interest rates worst enemy. 0% balance transfer cards are the secret play in your playbook to get out of credit card debt. These cards will allow you to transfer your balance to a new card with 0% interest for a period of time. Making it perfect people who are trying to pay off debt! Your balance will drop surprisingly faster if you are not paying interest. Transfer your debt to a 0% balance transfer card and make it your goal to pay off the balance before the interest rate kicks in.

It is vital to note you should NOT CHARGE THE CARD as you will only make your debt situation worse. These cards should only be used to pay off the debt, not add to it. You will need to get approved for the card as they may only issue them to people with good credit. Shop around, and choose the right card for you.

Pay off the large accounts first

So now you’re ready to start paying off your accounts, but which ones do I take care of first? The best method would be to flood your extra cash into the largest accounts with the highest interest rates, while making minimum payments on all others. This will ensure that you are paying less in the long run. The higher the interest rates, the more money you will have to spend paying off the account. Once you finish with your biggest baddest account, flood your extra cash into the next biggest baddest account until that one is paid off. Continue this process and you’ll be out of debt much sooner than you think.

Some people may suggest the opposite. Take care of the smaller accounts and work your way up to the big ones. While this is still not a bad idea, in the long run you will be paying more due to the accruing interest on the big accounts.

Don’t use your credit cards

The whole point of this process is to pay off your debt. If you continue to use your cards while attempting to get out of debt you’re going to get nowhere. Do not close your credit card accounts as doing so will drop your credit score. Start paying for items in cash rather than credit. You’ll find cash is a much cheaper and safer means of currency.

Don’t apply for new lines of credit

This one should be a no-brainer. Applying for any new lines of credit such as new credit cards or loans will only hurt your process towards a debt free life. New lines of credit means new debt and a new bill for you. Hold off on applying for any new credit until your debt is gone.

If you start utilizing these methods, you’ll find getting out of debt isn’t as hard as you may have thought. It can be a timely process but the end result is very rewarding. Living a debt free life will take a heavy burden off your back and will result in a happier less stressed you! Once you are out of debt, remember to always pay your bills on time, and don’t rack up your credit cards as you once did before.