Halloween is right around the corner, but many Americans aren’t afraid of the dead. It’s debt they’re worried about.
Disquieting debt can loom over you like a black cloud, ready to rain down at any moment, with no sign of a kindly ray of sunshine. It makes strong people tremble with fear. There’s no doubt about it — debt is a scary!
In a recent survey, 30% of Americans say that they are constantly stressed out about money. 85% say they are sometimes stressed out about money. And 61% say that they live paycheck to paycheck (CNBC).
Throughout the day and night, Americans are haunted by debt demons. One event, such as a car crash, job loss, or medical emergency could throw you into financial chaos.
And what if you die? What happens to your debt? Your financial fears could end up haunting your loved ones.
How Debt Haunts Your Credit Score
The decisions you make today may haunt you tomorrow. That $300 pair of sunglasses you put on your credit card? It could stay with you for a long time.
Your credit score is a number from 300 to 850 that represents a person’s creditworthiness. It is based on many factors, but over half of your score is based on whether you’ve paid your bills on time and how much debt you have.
The longer you have outstanding debt, the worse your credit score gets. Your credit score takes all of your debts into account and how many different accounts you have.
According to the Fair Isaac Corporation (FICO), the amount of debt you have accounts for 30% of your credit score. 35% of your credit score is based on payment history. Long after you pay off your debt, the ghosts of debt past will continue to haunt your credit score.
The Horrors of Debt Collection
There are thousands of debt collectors in the United States and they can be terrifying and stress inducing. While there are laws that help prevent harassment, debt collectors may not follow all of the rules. It’s not uncommon for debt collection agencies to haunt consumers every day with constant phone calls. Additionally, debt collection accounts can really harm your credit score. That’s a double haunting!
If you don’t want to live in fear of every phone call, speak with the professionals at National Debt Reduction Services to chase away those ghastly deb collection agencies.
And don’t fall for fake debt collectors that may try to get you to pay for “phantom debts” that you don’t owe. They may try to scare you with threats of lawsuits, imprisonment, or having your bank account closed. Ask for all of their information, including name, company, address, and telephone number. If they can’t provide that information, they are most likely a fake. Don’t give them any information and don’t pay them anything! They could be attempting to commit identity theft, which could haunt you for the rest of your life. Contact NDRS if you are being hounded by debt collection agencies.
Debt After Death
What happens to your debt when you die? This may be the scariest aspect of debt. You want to leave your family with dignity and support, not a mountain of debt that will weigh them down for years after your passing. While there are many laws concerning debt fter death, sometimes the debt ends up transferring over to co-signers, spouses, children, and family members.
Protect Yourself From Debt Demons
If you don’t want debt haunting you, protect yourself with these financial forewarnings:
Don’t cosign a loan
While it may be tempting, never take on someone else’s debt by cosigning a loan for them. You are promising to pay off their debt if they are unable to. And if they need a cosigner, they are considered a high-risk applicant — someone the lender doesn’t trust to pay back the loan on their own.
Cosigning a loan is a huge risk for you and the lender may end up suing you first if payments are not made. Not only are you risking your money, but you’re also risking your time, credit score, and relationship. Cosigning a loan has ruined more friendships and families than you can imagine. And we’ve personally seen many people file for bankruptcy due to cosigning a loan. Just don’t do it.
Never add someone else’s debt to your credit card
Again, don’t let good intentions ruin your financial life. It’s never a good idea to add someone else’s debt to your credit card, even if you have a lower APR and just want to help. Their debt immediately becomes your debt and you’ll have to answer for it. Not only that, your credit score will be negatively affected as well.
Don’t lend money to financially irresponsible people
We’ve all lent money to someone, but make sure you test the waters first by loaning a small amount and seeing if they pay you back. A written statement saying how and when they plan on paying you back should accompany the loan. Generally speaking though, it’s not a good idea to lend money to friends or family. It’s one of the most common ways that relationships sour.
For many people, however, debt is already a source of fear and terror. If debt is haunting you, it’s time to take action.
Release the Debt Ghosts of the Past
We’ve emphasized how scary debt can be — it’s Halloween season after all — but things aren’t as bad as they may seem. At least not when you have a team of debt specialists on your side.
You’re not alone. Don’t let debt haunt you for the rest of your life and then follow you to the grave. The best way to make sure you outlive your debt is by speaking with the certified debt specialists at National Debt Reduction Services.
Learn more about your options for getting out of debt. By making better decisions today, you can help ensure your survival tomorrow.
Contact NDRS today to slay those debt demons that continue to haunt you and your family. Call us at (888) 987-1325 for your free debt relief consultation.