I am a 53 year old male with a secure job at a hospital that earns me close to $50,000 per year. i am recently divorced and have a history of late payments on credit cards. I need help with fixing my finances and my credit.
The most important factor in establishing credit is paying on time. The next is to keep all balances under 30% of the credit limit.
The first step in debt reduction is to establish a budget. Visit YouthSmartEdu.com/forms. Once you’ve determined how much you can apply toward the bills, you can strategically eliminate the debt. This can be accomplished though PowerPay.org. I hope that this helps! For a more comprehensive answer, feel free to reach out.
There are many factors that go into your credit score.
Making your payment on time makes up 35% of your score. 30% is made up of outstanding debt or the amounts you owe. Have you been charging more?
Credit utilization, one of the most important factors considers the amount you owe compared to how much credit you have available. If this has increased, it would lower your score.
Length of Credit history makes up approximately 15% of your FICO score. Did you close an account that had been open for a long time?
Have you been applying for more credit? 10% of your score is based on this information, so opening new lines could negatively impact your score.
The final 10% of the FICO is determined by the types of credit you have. You want to have a variety of debts.
As for fixing your finances, to start with, make a budget. Total up all your monthly take home pay.
Next, start to subtract all of your expenses. You will want to subtract your housing, car, gas, food, entertainment, clothing, insurance just to name a few.
If you aren’t sure where your money went, go to your checking account online or in your register. Take a 30 day period and start to categorize your spending. If it’s groceries, put the dollar amount under the heading groceries. Do the same for eating out, snacks and drinks, entertainment, clothes, or any other category you discover.
Add up the columns so you have an idea of what you spend on each one for a month. Put those figures into the budget. Once you’ve completed that task, subtract the total spending from the total income. Hopefully you have a positive number. If not, you need to go through each category and decide where you can cut back until you do have a positive number.
Doing this will allow you to free up extra money to put towards your debt, and will also keep you from going further into debt because you are running out of money each month.
If your struggling with your credit card payments a debt management plan may be your best option. A debt management plan can reduce your interest and monthly payments to your credit card companies. You can speak with a Credit Counselor about a debt management plan by contacting the National Foundation of Credit Counseling at www.nfcc.org. They will direct you to a non-profit credit counseling agency in your area.
Certified Credit Counselor.
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