Are you only able to make the minimum payment on your credit card? How much debt do you have compared to your income? How many credit cards do you have? These are some of the questions that will help you understand your financial situation so that you can take action and manage your credit.

 

Review your current situation
Before you make a plan to get out of debt, understand your financial picture. Review all of your outstanding debt including mortgage, car payments, credit cards, and other loans. This will help you determine your priorities and what debt has become the most difficult to manage.

Make a budget. Write down all your sources of income and your expenses. Then, determine how you can cut back on what you're spending. Start yours today by using our online Home Budget calculator.

Know your Credit Score
You can get one free credit report from each of the three major credit agencies once a year. Your free credit reports can be ordered through www.annualcreditreport.com.

You are also entitled to a free report:

  • Within 60 days of being denied credit, insurance, or employment
  • Once a year if you're unemployed and plan to look for a job within 60 days
  • If you're on welfare
  • If your report is inaccurate because of fraud, including identity theft

 

Take Action and Make a Plan

Consider the following options:

Consolidate your debt. Rolling all of your debt into a single loan may reduce your monthly payments, and having just one bill will make tracking and payments easier. If you're a homeowner, you have the additional option of consolidating debt through home equity financing or refinancing. This may allow you to save even more with possible tax-deductions1.Try our Debt Consolidation Calculator. Click here for more information on home equity.

1Please consult your tax advisor regarding tax deductibility.


Refinance your mortgage
. If interest rates have dropped since you took out your mortgage, consider refinancing to lower your monthly payments. Consult a Sandy Spring Bank Mortgage Banker for current rates and refinancing options and try our Refinance Calculator.

Pay off your debt with the highest-interest first. First pay off the balances of loans, lines of credit, and credit cards with the highest interest rates. Continue to pay at least the minimum due on your other accounts.

Call your creditors. If you are unable to pay your bills or need to make a partial payment, you may be able to work out payment plans you can afford.

See a credit counselor. To help identify additional options and plans to improve your financial status and repair credit, seek the advice of a reputable credit counseling agency.