It’s time to call in some backup and talk with a credit counselor. Not one of those credit repair scams you’ve probably seen or heard ads for — I’m talking about a reputable, nonprofit debt management agency.
After an initial call or visit, a credit counselor can assist you in disputing negative items on your report or help you manage your debt through a payoff plan. A legitimate debt management plan shouldn’t charge more than $50 per month.
The most nerve-wracking part is making the first appointment. I did this a few years ago when I was feeling crushed by my credit card, student loan and small-business debt.
My counselor asked me a ton of questions about my debt. Balances, interest rates, minimum payments. She asked about my checking and savings account balances, and what I was paying in estimated taxes each quarter because I was self-employed. She asked about my rent costs. My utilities. If I hadn’t signed up for this, I would have thought it was invasive.
She crunched some numbers and sighed a little. “You just need to keep going,” she said, explaining that my credit was good, my payment history was solid and my interest rates were fairly low. The best course of action would be to stay the course and keep making whatever payments I could.
This might be the same news you’ll get if you call a credit counselor. But you’ve likely been looking at this debt so much that you need an impartial third party to review your situation.
It was hard to accept that a debt management plan couldn’t help me then. Like you, I wanted a plan. An answer. Any answer.
The reality was that I had to form a plan on my own. I tackled small balances first to clear them away, and then moved on to debt that had higher interest rates. But the real key was to stay motivated. It’s going to be a long road out from under this debt, whether you work with a credit counselor or on your own. As you rebuild your payment history, your score will go up. The zero interest transfer offers will return. You can keep transferring the balance and throwing money at your debt for as long as you have to.
And for the next few years, that’s going to have to be OK. Because even if it takes years, there will be an end to that journey. If you can stay motivated, you’ll be well on your way to freedom from debt.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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