How to know how much debt you owe

You can’t fight what you don’t see. So if you’re on a mission pay the debt offfirst, you must know how much you Indeed be to.

But keeping track of your debts can be like a scavenger hunt. You will have to search in several places as there is no centralized platform (or at least not yet), where you can check every balance that is under your name.

Get a copy of your credit report

When it comes to determining your total debt balance, there is no better place to start than yours. credit report…

Rod Griffin, Senior Director of the Department of Public Education and the Bar Experian, is talking:

“If you get a copy of your credit report, it will list all of your debts reported to the credit bureau, which is essentially the majority of them.”

When you open your credit report, you will see the following:

• Credit card balance (s)
• Student loan debt.
• Mortgage.
• Car loans.
• Loans for RV.
• Personal loans.

You will also be able to see the current balance of each account and their good reputation. Plus, your credit report will show you who your creditors are as well as their contact information so you can contact them if you have any questions.

Read more: How credit works: understanding the credit reporting system

How to request is free a copy of your credit report

If you didn’t know, you are entitled to a free copy of your credit report from all three major credit agencies (Experian, TransUnion, and Equifax) every 12 months.

To get your free copy, just go to AnnualCreditReport.com., and fill out the form. On this form, you will be asked to provide your full legal name, current and previous residential address, and social security number, among other things, to verify your identity.

After you submit the form, you will be able to view your reports almost instantly and also print them for your financial reports.

But keep your eyes open …

While this is quite rare, there may be mistakes in your credit report. V recent research by Consumer Reports, 34% of participants found at least one error after viewing their reports.

Some of the most common mistakes you may find are closed accounts, listed as open accounts, incorrect debt balances, or incorrect credit limits – all of which can worsen your credit score as well as interfere with your debt repayment strategy.

If you notice any errors, you can challenge them by contacting the credit bureaus and providing them with any supporting evidence.

Likewise, Griffin said it’s important to get a report from all three bureaus, not just one, as some debts may not appear on all reports.

Sort through your old mail to find debts that don’t appear on your credit report.

While your credit report is the most comprehensive debt tracking document, it is also possible that it doesn’t show you the big picture.

Why?

Because there are certain debts that are not reported to the credit bureau, unless they are past due (also called super past due) and have been sent to a debt collection agency.

Debts that not will appear on your credit report

• Medical bills.
• Tax debt.
• Rent payments.
• Utility bills.
• Civil judgments.

To find out how much you owe on any of these debts, Griffin says the best thing you can do is review your old mail to see if you received any notifications… If so, you will have to go straight to that source to find out your current balance and minimum payment amount.

While it can take a long time to reach out to each lender or organization, it is always best to give them a call. before the transfer of debt to a collection agency and everything gets more serious.

Registration with your creditors

This is probably the part where you say, “No, you can’t do that,” but trust me, you need do it.

I understand that contacting your lenders is not very interesting, especially since most of us borrowers are afraid that by contacting them we are opening a bank of worms.

But if you want to be sure that the balances you see on your credit report are 100% accurate, then contacting your lender (or lenders) is definitely the right decision.

“If you call your lender, they can tell you things like the amount to pay off the loan and the like,” says Griffin, which is critical to developing a good repayment strategy.

So where can you find your creditors’ contact information?

As I mentioned earlier, your credit report contains not only information about your debts and balances, but also who your creditors are and their phone numbers.… So this is a good place to start.

You can also do a quick Google search to find this information as well as find it in any old statements you may have. If you are trying to contact a credit card lender, you can also check the number on the back of your card (if you still have it, of course).

However, if you don’t feel like calling, there is another option you can look into: your lender’s website.

There, you can sign up or log in if you still have an account and see all the details of your account, including how much you need to pay each month to pay off your balance faster and save money on interest. …

Dealing With Your Debts

Now that you know how to find your debts and matching balances, it’s time to come up with a plan to take the debt bull by the horns.

Make a list all your debts

The first step is to sit down and grab a notebook or spreadsheet (I prefer the latter, but you pick whichever works best for you) along with your credit report and other debts you may have found during your scavenger hunt and make a list … all your debts.

Each item on the list should include:

• Current balance and the date it was received (you know, since interest keeps on charging).
• Current interest rate…
• Minimum payment to pay…

This will allow you to see the bigger picture so that you can prioritize your debt, either by balance sheet or by interest rate.

Choose the best way for you to pay off your debt

When I spoke to Griffin, he told me:

“The math says that you should always pay off the loans or credit cards with the highest interest rate first, because that will save you the most money in the long run. But I always tell people that although math doesn’t lie, it doesn’t always tell the whole truth. Because mathematics doesn’t always take into account other things in life. “

There are two very popular methods of paying off debt: snowball and avalanche…

Snowball method

The snowball method is to take whatever extra money you have and use it to pay off the debt with the smallest balance. Once it is paid off, you take the money you put into it and use it to pay off the next debt with the lowest balance on your list, and so on.

This method is especially used by those with a lot of credit card debt with similar interest rates.

Avalanche method

On the other hand, the avalanche method is focused on paying off primarily debts with the highest interest rates, regardless of their balance. This repayment strategy is especially good for those with a potpourri of debt (student loans, credit card debts, personal loans, car loans, etc.).

This method is the most “mathematically correct” method as it will save you significant interest savings, but it will take some time to see results, especially if your highest interest debt has significant balances.

Whether you are a team snowball or a team avalanche, Griffin says the most important thing is to choose a reward strategy that works for you and keeps you motivated to achieve your goals.

Read more: Snowball vs. Avalanche: Which Debt Payment Method Is Better?

Reassess your budget

After choosing a debt repayment strategy, the next step is to create a budget that exactly matches your financial goals.

You can do this by adding all of your monthly expenses, not just debts, and then subtracting that number from your monthly income. This will allow you to see how much you are getting on a monthly basis, as well as the additional amount you can set aside to pay off your debts.

If you need help with budgeting, you can download our free budgeting spreadsheet, or check out some budget apps here…

Once you’ve figured it out, try to stick with it for as long as possible.

Read more: How to budget: our step-by-step money management guide

What if some accounts are already in collections?

If, after looking at your credit report, you see that you have accounts in your collections, don’t be discouraged, but don’t ignore them either.

Collection accounts can be extremely detrimental to your credit, so you should take care of them first before taking on any other debts.

When dealing with these types of accounts, the first step is to contact the collector for all the details. If, after talking to them, the amount you have to pay exceeds what you can pay at the moment, you can always try to negotiate a new repayment plan.

If that doesn’t work, try contacting a non-profit credit advisory agency like National Fund for Credit Counselingas they have trained specialists who can help you in such a situation for a nominal fee.

You can also talk to a lawyer – although this should only be done in extreme situations where a collection agency threatens to sue you – to evaluate you.

But whatever you do try to avoid paying off debt as much as possibleas this will be reflected in your report, which could potentially affect your chances of getting a future loan with favorable terms or interest rates approved.

Summary

Debt tracking is not fun for most people. In fact, it can be a stressful experience.

But when you find out how much duty you haveyou can take the first steps to take control of your finances, increase your cash flow and improve credit check – all of these can improve your quality of life and give you peace of mind.

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