Debt Relief Help – Tips To Improve Your Credit Score And Eliminate Debt

There are many financial advisors out there tell you that you should reduce your debt

. This is good advice for anyone with debt but how to go about it varies between these advisors. Some people advise you to pay off the debt according to the type of debt, others advise you to pay off the debt according to the amount of interest rate your being charged. Finally, there are some advisors that suggest you use bonus money or inheritance money to pay off the debt.

Since most Americans have some form of debt there is a good chance that you should be paying off that debt, not only for your credit score but generally for your financial well-being. There are basically three types of credit, Good Credit, Bad Credit and some form of credit that falls in between.

Some Financial Advisors will tell you that there is no such thing as "Good" debt. I personally feel that there is some good credit out there because in the long run it can benefit you. This type of debt can be described as Home Mortgage Loans that will allow you to benefit from the money you are paying on that debt. If you home increases in equity and you are making your payments in full and on time, then you are getting the benefit of those payments. If you have gone to school and have student loans that you are paying on, you generally have got a better job because of this education. If you have got this loan on a low interest and reasonable payment, then this can be considered a Good Debt. Good Debt is basically debt that either is going to help you financially or produce money in the long run.

Bad Debt generally is credit card debt, personal loans at a higher interest rate, and any other "loan" that is costing you a lot of money that gives you no benefit. If you have a student loan but never finished school, or it was a personal loan and is charging you a fairly high interest rate, then this type of student loan is a Bad Debt.

Debts that fall in-between good and bad types of credit generally are loans that really don't benefit you but they don't really hurt you either. An automobile loan could fall in this category if you are not paying a high interest rate on the loan. It is important for you to determine your debts and technically which category they fall into.

Bad debts are your biggest concern and you should make every effort to get them paid off first. Do you pay them off by amount or by interest is completely up to you. Financial advisors don't agree on which way you should pay them off and you could determine the best way for you.

The most important part is keeping you motivated in getting out of debt. Good credit is important and getting your debt paid down will help you get your credit score up.

Debt Relief Help Tips To Improve Your Credit Score And Eliminate Debt

By: ketty archer

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