How to Get Out of Debt Without Hurting Your Credit

How to Get Out of Debt Without Hurting Your Credit

There are major differences between debt management, debt consolidation and debt settlement. Debt management is organizing your personal finances in such a way that you pay your way out of debt. Debt consolidation is when you take out a loan and use it to pay off other debts like credit cards.

Debt settlement is when you, or an organization on your behalf, arrange with your creditors to settle your debts for less than what you owe and it does have a negative impact on your credit. With the first two options, you can pay off your debts and not hurt your credit scores.

Get a budget. Add up all your expenses in one column and your income in another. Hopefully, you have more income than you do expenses.

Start cutting out expenses you can live without. Maybe you can go down to one vehicle instead of two or you can cut back on your cable services. The goal is to lower your expenses in order to be able to pay more on your debts every month.

If you can’t reduce your expenses, bring in more income . Take on a part-time job or start a side business. Take any extra income you earn and apply it towards paying off your debts.

Find a conscredit cardistent number that works within your budget and pay that amount every month no matter what. You can’t fudge things month-to-month.


Pay off your highest interest balances first or pay off small debts that you can eliminate quickly. These are two approaches that experts recommend to paying off credit cards. With both ways, paying down your credit cards will have a “snowball” effect.

The more you lower your balances, the quicker the process of getting out of debt will go. Leave the accounts open, unless you have a good reason to close them, but don’t use them.

As you lower your debts, keep paying the same amount every month. If you pay a debt off, then take the money you were giving company A and send it to company B. That is the only way to speed up the process.

Don’t be so focused on paying off debt that you neglect your savings. If an emergency happens and you have to go deeper into debt to pay for it, then all your hard work and sacrifices will be for nothing. Read More

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