How To Improve A Consumer’s Financial Status

In the U.S., a consumer’s financial status establishes if investments are possible. According to lending statistics, a consumer’s income to debt ratio determines if traditional loan approvals are possible. Strategies to lower debts and improve the consumer’s financial status increase their chances for approval.

View the Big Picture

Consumers in denial will never improve their financial status. Debt management consultants advise the consumers to view the big picture. A high volume of debt reduces the consumer’s creditworthiness. It also plays a role in denying access to new lines of credit and even approval for a rental contract.

Accept Lower Interest Loans

A debt management specialist possesses negotiation skills that achieve lower interest rates for consumers. An assessment of the consumer’s current financial status establishes eligibility for a new loan. If eligible, consumers apply for a new loan and consolidate their current debts. The action decreases their total debt and gives them a more affordable interest rate.

Choose Which Debts to Settle First

High-interest accounts are addressed first in most debt management plans. However, the consumer’s earnings determine if an early payoff is possible right now. Lower income levels restrict the consumer’s ability to pay off larger debts. Debt management consultants recommend settlement for smaller debts first if the consumer has a lower income. The small debts are often eligible for settlement offers if the account has been sold to a collection agency.

Select New Lines of Credit Wisely

Debt management specialists don’t recommend a new line of credit for consumers who are in debt. Alternatively, any new line of credit that is eligible for balance transfers is a viable choice. By opening the account, consumers transfer outstanding debts and pay them off all at once. Select credit card accounts offer zero-interest for one year in addition to balance transfers.

In the U.S., financial status affects the lives of consumers. High volume debt closes the door to new investments and stops consumers from opening new lines of credit. It also affects their credit scores. Bad credit ratings don’t just affect the consumer’s ability to get a new loan. The scores increase costs such as insurance premiums. Consumers who want to learn more are encouraged to contact a debt management consultant now.