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101 Powerful Tips for
Legally
Improving Your Credit Score
Dealing with Debt
Page 2 of 2
In fact,
several states are investigating payday loans for possible
illegal activity stemming from usury laws. If you cannot afford
your bills one month, you are much better off trying to arrange
an alternate schedule of payment with the companies you owe
money to rather than risking your credit rating through payday
loans. Payday loans may be fine in a true emergency, but the
payday loans cycle gets very unaffordable very fast and can ruin
your credit rating.
Tip #93: Do
not use one debt to repay another
This results in
accumulating interest and so increasingly unpayable bills. If
you use one credit card to pay off another, for example, you are
paying interest on interest, and paying off the new credit card
bill will be more difficult.
This method
will also mean that you will always be looking for new credit
and new debt to pay off your increasing debts. It makes more
sense to get a second job or arrange for a new payment
schedule.
Paying off your debts with another
debt may help you in the short run - you will not have a late
payment on your credit record - but in the long run the larger
debt load will make maintaining good credit more and more
difficult. The only exception to this rule is debt
consolidation, in which all your bills are paid by one lender,
who then becomes the only creditor you owe money to.
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