By: blog manager | May 12, 2013

In the last article, we introduced the idea of debt consolidation as a way of getting gradually out of debt. We talked about some of the measures available to people, namely taking out a low-interest or fixed-interest loan or consolidating debt into a mortgage. To close this two-part series of what you should know about debt consolidation, we introduce in this article the importance of managing a good credit file, prioritising your debts, and getting in touch with a company specialising in debt consolidation.


Before you apply for debt consolidation, make sure that you know how your credit file is doing. If you're not aware of its condition, some financial institutions offer an online credit report for free. All you have to do is fill in some information and submit it to them. If your credit file is in pretty good shape, then you can proceed onto consolidating your debt. But if you're aware of some spots on your record,there are a few ways you can fix up the situation. One of them is to clear your file of any unjust defaults or judgements. Another is to check for any false statements listed on your credit file (some companies overlook these, and you do have the right to dispute them). One other way is to pay future repayments on time and pay off the credit that you use every month to accumulate more good records than bad.


Once you've consolidated your debts into a loan, take the time to prioritise them accordingly. In general,it's better to pay off secured creditors first over unsecured ones because they have more ability to seize your property to make up for your debts. When it comes down to the specifics, the most usurious are on top of priority (for example: home related debts). So, you need to take care of any mortgage payments first before anything else. Next one in the list of debts is a car loan or lease. Don't skip on this payment if a car is essential to your family or work needs. This one you need not worry about if you don't have kids. Paying off child support is important because penalties can be leveraged against you for failure to do so. At the bottom of the list but still important are income tax debts.


Though it may be easy to read about, prioritising debts and managing a good credit file can still feel like overwhelming tasks. Having a loan manager specialising in debt consolidation can help you through these steps. Being professionals in their industry, can assist you with debt consolidation. We will utilise our knowledge to get you back on track. The best thing getting our help is that we are able to assess your situation and make payment plans best suited to your financial capabilities. Contact The Finance Group of Parramatta today!


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