Credit Scores Are Dropping

At a time when credit scores are dropping at a record pace, there are steps you can take to maintain yours. If you feel you are living check to check, you are not alone. Americans carry over $18 trillion in debt between credit cards, car loans, personal loans, mortgages, and student loans. Nearly 4.4% of that debt is delinquent. You can prevent your credit score from dropping by Planning, Prioritizing, and Communicating. 

Even if you are underemployed and drowning in debt, formulating a plan to reduce debt is your first step to maintaining a healthy credit score. Print and fill out the debt worksheet we provide on our website. Then print and fill out the budget worksheet. Once you have a clear picture of how much money you owe, how much you need to live on, and how much you’ve been spending you’ll be able to find ways to cut back. 

Prioritize necessary expenses. Focus on reducing what is unnecessary like Starbucks coffees and dining out. Then put what you save towards the debts you owe. Always pay your credit cards by hand monthly. Even if you pay using an app, don’t set up an automatic payment. When you pay by hand, you’ll know when you can pay more than the minimum payment required and when you can’t. This will help you reduce high-interest debt faster. 

Communicate with your credit card companies and lenders. Inform them of your situation. Let them know that you are feeling overwhelmed and tell them you are working hard to remain in good standing. Ask for their advice and recommendations. By communicating to your lenders and creditors that you are trying, and by making on-time payments, you will avoid increased interest and other fees.

This part is crucial. Until your finances are under control you should avoid opening new lines of credit and avoid charging anything that isn’t necessary. Only use your credit cards to charge monthly living expenses that you know will be paid off in full immediately. If you need help creating a spending plan, contact Alloy Wealth! 800-689-3935