Let's talk a little about getting out of debt. These days so many people have gotten in deeper than they can swim and are drowning in debt. It seems like jobs are paying less and prices just keep rising. Credit cards are far too easy to obtain and the fees associated with them are simply insane.
I don't pretend to be any kind of expert on any of this. I'm not going to advise you what credit cards to get or what loan rates are fair. Why? Because I don't know. What does this chick know then and why am I reading this? Well you are reading this, I assume, because you are one of the many people who is drowning in debt. Maybe you were one of those people who was doing financially well and thought it was time to begin building your credit. Maybe already had credit and got some new cards to do balance transfers. Whatever the case may be, now you are neck deep in debt and still going under.
What I'm going to tell you here is how to find out for free where to look to see what your debts are and what your credit report says about you. Then I will give you a couple of possible solutions in beginning to get that debt paid off. Again I am no expert but I have been through this once and am working my way through the process again.
First, you need to go to http://www.annualcreditreport.com and follow the instructions to getting your credit report. This is an online site where you type in your information and they give you access online to your credit report free once a year. If you want to see your credit score that actually will cost you but the credit report is free with no strings attached.
Now, once you are on your credit report, you need to write down what you see or print out the report. Every item on the report should have a name and address of who you owe. Some will even have phone numbers to contact. Occasionally you will find something on your report that you don't recognize. Don't jump to conclusions because if your debt was sold or a company changed hands sometimes that explains it. Call the contact number and ask who they are and why you owe them money. Find out everything you can about this particular debt. If you STILL don't recognize tell them. Most companies will have some process for you to prove that this debt is not yours.
Sometimes you will find an item on your credit report that you have already paid off showing as unpaid. If this happens, again call the company. Tell them that you have paid the item. Make them track down the payment. Usually this will clear it up and if it does you need to request for them to clear it up with the credit reporting agencies. If, however, they still claim never to have gotten that final payment you may have to do the legwork of finding a reciept or a cancelled check as proof. Again, once proven you need to request for the company to clear this off your credit. This usually takes between 30 and 60 days.
Now on to those things that you know that you owe. This can be anything from old unpaid bills to credit card debt. First you need to find out if any of them are still charging fees each month. If the account is still listed as open then it is likely that it is. If it is closed then it is possible that it is not but they do have the right to do so which means your debt is still growing.
Everybody's situation is going to be different from here but let's just make some general assumptions or examples. Lets assume that your list looks something like the one below. (I'm just going to include the bill names and amounts but your actual list should include phone numbers and/or addresses)
Old Electric Bill (unpaid) ............................... 250
Old Cable bill (unpaid) ...................................150
Credit card 1 ...................................................250
credit card 2 ..................................................1500
credit card 3 (closed) ...................................2500
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total ................................................................4650
You list may include more or less but this is just an example. It's kind of scary to look at it all written out. Often we don't realize what our total debt is because we are simply looking at each bill individually and the minimum payments. And while we are on the subject of minimum payments, DON'T! Make more than your minimum whenever possible because just making the minimum payment will keep you in debt forever. Ok well forever might be a bit much but for a very very long time.
