Settling Debts Before They Become Credit Score Deaths

A debt is money or value owed by one entity to another as a result of financial transactions in which payment was not made fully or at all. For new debtors, the experience can be a galling one. Nothing can fully prepare one for the sensation of panic and fear when a call from the financial institutions comes through. Some people even go through denial even though it’s very clear that the debt is theirs. Nobody wants to be a debtor, but very occasionally, falling on that side of finance is more common than one might think. People are encouraged by advertisements from organizations of different types to spend their money without having a care in the world. Obliging is easy — materialism is a philosophy the 21st century seems to take very seriously — and people never really know when the credit on their card finally runs out. The message from the banks seems to be the wake-up call most of the time.

Navigating the world of being a debtor is easy, as long as one has grit, a willingness to pay off the debt no matter how insurmountable it seems, a willingness to be truthful with the firms being owed, and a willingness to cut costs where one can to make sure the debt is paid. Shirking in any one of these can lead to a permanent stain on one’s credit score, so caution should be undertaken, and the matter should be handled with grace.

Things to do before paying back a debt

The message from debt collectors does things to the psyche, that much cannot be argued. One might go through phases of panic, fear, confusion, anxiety, and even denial. Many questions run through the mind and usually, one suddenly become a prudent mathematician, calculating expenses spent within a month and wondering where exactly the credit disappeared to. Some people go the length of ignoring the messages and calls of the banks and organizations until these institutions reciprocate by going the length to hire debt collection agencies. Needless to say, ignoring the calls and messages is a bad strategy, and one is better off facing the challenge head-on. These are things to do before paying debts

  • Ensure that panic is far

This seems like a small thing but it definitely is the first thing one should do. People take gormless decisions that benefit no one in the long run when they panic. Therefore one should face the challenge with a clear head and a willingness to do what is right. To clarify, the right thing to do is confront the debt and pay it, rather than running away or stirring up a storm by denying the debt.

  • Make extra sure the debt is yours

Yes. Banks sometime make mistakes when sending out invoices and alerts to supposed debts. A good financial record system helps one to keep track of things that were spent within the time period of the debt. If the debt turns out not to belong to you, a simple notification to the institution would earn an apology and the debt dissipates

  • If the debt is yours, make arrangements to pay back

If the debt turns out to be yours, it would be wise to make an appointment with your banker. Here, terms for repayment can be drawn up and concessions can be made until payments are paid.

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