The mistakes that influence our debt or healthy financial habits come from habit more than particularly thinking about it and taking an informed decision; some come from superficial understanding, while some others come from plain misjudgments of reality. The knowledge and capacity to avoid such pitfalls, is the a type of "debt consolidation" you can get and this type of debt consolidation will not influence negatively your credit rating.
Mistake no 1
Many people use their credit cards as an extension of their income rather than convenience payment within their income. While initially it must be looking great to have the capacity to jump above the limits imposed on you by your income, very soon the bills of your credit will eat into that income marginalizing it further then you are on the road to search for debt consolidation a few years down the lane.
Mistake no 2
Going on wild shopping sprees when there is no regular income to cover the bills; 95 percent of the debts among Americans start from this point. The temptation of buying beyond ones means is great indeed, but look down the lane and see yourself cornered by debt this picture should be sufficient to sober you up for a long time.
Mistake no 3
Defaulting on your unsecured loans this is a great chance to take because it literally destroys your life and no amount of cash really is worth that. You will damage your credit rating, you will damage your capacity to buy insurance and you will to have your salary attached and go through many other possible harassments that you can very well do without; this is one loan where if you default you literally loose your peace of mind. Do not do it.
Mistake no 4
Ignoring or not paying attention to the deadlines of the credit card payments. Every time you go over the deadline, you will be charged late fee which is a certain percentage of your total outstanding. This is a terrible way to incur losses they already charge you interest on the amount you owe them than they will charge you interest upon that interest. Be careful about the deadlines for payment and pay on time or before so as to avoid the penalty or fine attached to late payment.
Mistake no 5
Not knowing how much you are worth in debts this is probably the most common and most disastrous mistake of all. The fact that you do not know how much you owe will blind you to the fact that actually owe something. Hence, your spending habits remaining the same, instead of controlling the debt, or trying to reduce it, you tend to ignore it and by doing so increase it steadily.
Mistake no 6
Borrowing from your future saving plans (such as retirement plans) this type of borrowing is slowly gathering ground but it is extremely dangerous because you are yourself blowing up your egg-nest and in the future when you will be down and incapable of getting a job you will really be in trouble. Do not touch these investment/ saving plans until and unless it is a life-and-death situation.
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