What About Debt Consolidation?

How to attempt debt consolidation correctly can be a little tricky. People who want to free themselves from the stranglehold of debt collectors jump into consolidation without thinking twice. In many cases, this quick action makes worthwhile options disappear so people cannot make the best possible decision for their situations.

By being aware of potential mistakes when consolidating, you can know how credible your debt counselor is and whether or not debt consolidation is a good idea.

Most problems stem from monthly budgets. Before consolidating, you should analyze your ability to make payments. You do not have to match your income to your expenses perfectly, but you do have to be realistic. While these problems are not of concern to everyone, they do seem to the main reason people have financial problems. Before consolidating, you need to know where your financial problems lie. You should be familiar with your credit reports from all three of the major consumer credit reporting agencies.

If your married and your partner has problems with spending that are unlikely to change or improve, a financially mismatched couple needs to see a credit counselor before they end up seeing a lawyer!

Save all receipts and use your credit report. It is possible that some of your debts have not yet been reported to the credit agencies, and it's easy to forget about a debt or two when under stress. Be sure to open all those bills when considering it Some already are at low interest rates, and while consolidating them into a slightly higher interest payment plan may seem convenient, you will end up paying more than you need to. Contact your creditors to see where you stand, and remember that you are at a much lower risk for creditor harassment once you have begun the credit counseling process.

Remember there are a lot of debt counselors and consolidation companies out there. They charge fees for the service you receive - do not let them come as a surprise. Many people simply assume their credit counselors will come up with the best solution to their financial situations. Sometimes your credit rating will get worse before it gets better. Be aware of this. If there are terms and conditions that you do not understand, ask! Your consolidator should encourage your understanding. Contracts should be stated clearly and without small print. Finally, listen to your instincts. You do not want to have to say, "I should have done this....", or "I knew it would end up this way...".

If your looking for a way to quickly pay-off debt and supercharge your retirement account visit my website at: www.financialadvantages.com and get my free report!