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Warning: Low Credit Score May Cause Wrinkles!

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When you are having financial difficulties and can’t seem to make your bill payments on time, your credit score will suffer. There are a number of reasons why your financial obligations have become a struggle.  If you are not making enough money at your job or if you are not controlling your spending and live without a budget, you may find times getting tougher every day. The cost of living in general is continually on the rise and as a result, consumers need to start changing their money habits or face the consequences.

The Face of Bad Credit
When you make late bill payments or miss bill deadlines altogether, it has a serious impact on your credit score and your overall health. Rates of depression, stress, and anxiety are just as much on the rise as gas prices and they lead to a multitude of serious aftereffects. Being constantly worried about how to make ends meet with no plan in sight tends to cause deterioration to your physical, mental, and emotional health that no expensive skin care routine can correct.

Many people say they feel 10 years older when battling overwhelming debt and financial issues but most often look 10 years older too. Stress lines and worry creases tend to take hold and people under duress tend to eat poorly. This physical toll can not only age you, it can also cause you to incur medical bills on top of the existing debt.

End the Vicious Cycle for Better Health
With low credit scores you not only get denied loan applications and financing requests, you also end up paying more money for things you need in your daily life. Auto insurance rates will increase when your credit score goes down and you may find it difficult to get a cell phone or utility services without first putting down a hefty deposit. You may also incur a higher rate on your credit card’s interest if you keep making late payments. Those penalty fees will certainly add up quickly, forcing a bad situation into a worse-case scenario.

The only way to get out from under the stress and the mess of debt and bad credit is to make a commitment to getting back on track. Here are a few tips you can do now to start back on a better financial road:

Know Where You Are
Obtain a copy of your credit reports and see exactly where you stand financially. It will cost you a small fee to obtain your credit score but it’s worth it to start your journey with the right information. You can also get a free credit scores online. Other services offer it for free as well but they’ll also tie you into some form of a free trial which later on becomes a paid subscription. Review all details of your credit report for accuracy and dispute the data that is incorrect with the individual credit bureaus.

Get Serious
Gather all of your bills and monthly income statements. Sit down and list all of your debts, balances due, and monthly payment information on a sheet of paper. Add up your monthly expenses and deduct your monthly income. If the number you get is negative, it is time to start cutting back on your spending. Start canceling your extended cable packages and luxury cell phone plans. Stick with only the basics until you can get over this financially difficult time. You may even need to take a second job to earn more money towards debt relief and credit repair. Make a commitment to budgeting your income and saving better.

Define Your Wants and Needs It is important to identify how you spend money. If you are prone to impulse buys in the shoe department or at the makeup counter, it is time to put a stop to your financially destructive money habits. Decide on the items you absolutely need to have to live and identify those things you just want to have. You can spend money on your needs but commit to saving up for those wanted items rather than put them on your credit card when you don’t have the cash. This method can go a long way to helping you get back in good financial graces. 

Automate Your Bill Paying
Once you have budgeted your cash, you should be able to always ensure you have enough money in your account to set up automated payments. Busy people tend to forget their bills and end up paying late fees and penalties that also lower their credit score. By automating payments, you are guaranteed to pay all of your bills on time, each and every month. This will mean a great deal to your credit score over time. Your payment history is a big factor in your overall credit score.

Check Back In With Your Credit
Once you have started on a better money journey, you need to check back in with your credit score. Give yourself 3-6 months of consistent bill paying and better spending habits before ordering another copy of your credit score. See what a difference your change in money management habits has made and keep moving forward.

Getting out of debt and back to a good credit standing won’t happen overnight and won’thappen without a lot of hard work. Every consumer has the power to fix their finances without the help of a high-priced ‘credit fix-it’ company and has an obligation to creating a stable financial future for themselves and for their families. If you have been headed down a path of stress and worry that is causing you to lose your beauty sleep, it is time to make the changes necessary to a better money life.

This is a guest post written by Eliza Collins, a professional writer specialized in the personal finance space. Eliza’s experience includes working for financial institutions, private debt relief companies as well as years of balancing the family budget. You can read more of her articles at the debt settlement blog.


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