What options do I have to reduce my debt quickly without hurting my credit rating?
What options do I have to reduce my debt quickly without hurting my credit rating? I am not past due, but feel overwhelmed. How do I reduce my debts?
There are many forms of debt relief and ways to answer your question "How Do I Reduce My Debts?" including:
In your case, the only solution that will not impair your credit profile is a debt consolidation loan.
Debt consolidation can benefit you in many ways:
- Monthly cash flow
- Total savings
- Interest deductibility
- Your credit rating
However, not all forms of debt consolidation are the same. You need to consider your specific situation, including if you own or rent your home, your monthly debt to income ratio, and your credit rating. A program like a debt consolidation loan may lower your monthly payment, get you a lower rate than most credit cards, and the interest is tax deductible.
Alternatively, a program like negotiated debt settlement may lower your monthly payment, get you debt free fast, save half of what you owe, but it could negatively impact your credit rating.
These are a few of the considerations. See the Bills.com article How to Reduce Debt Quickly & Effectively if speed is what you need. If you want more in-depth information about your options, read the Debt Solutions: Bills.com White Paper on Debt Solutions.
I hope this information helps you Find. Learn. Save.
Struggling with debt?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Auto loan debt was $1.50 trillion and credit card was $0.89 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Utah, 19% have any kind of debt in collections and the median debt in collections is $1943. Medical debt is common and 12% have that in collections. The median medical debt in collections is $980.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.