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Debt has become an unfortunate standard in American households. In fact, the average American household has over $10,000 in credit card debt and the average interest rate runs in the high teens. Most Americans are worried about debt reduction but do not know how to start the process. One thing to keep in mind is that there is good and bad debt. Good debt is the debt that you take on for a home or college as long as you are borrowing at a rate that you can afford to pay back. Unfortunately, the mortgage meltdown has taught us that Americans were not borrowing at a rate they could not afford to pay back and many investors believe that student loan debt may be the next crisis. Bad debt consists of credit card debt for things that you consume quickly. If you cannot afford to pay your bill in a month or two you should not be charging this debt to your credit card. Instead, you should be saving money for these items such as vacations, eating out, etc.

Before you can make any progress on your debt you must get your spending under control. For one-month record everything you spend and cut back on the things that you do not need, this will help you start saving money quickly. To begin to get out of debt you will need to pay off your high interest card first while paying only the minimum on the other cards until one is paid off. When you have the one paid off take all of the money and put it towards the next card. Only pay the minimum while you are actively working on another card. If you continue to pay the minimum, it will take you years to pay off a card.

Do not take the easy way out of debt and borrow more money against your home loan or 401k. These loans can be dangerous and do not change your spending habits. In fact, most people who take these loans find themselves back into credit card debit quickly. Start building an emergency fund as soon as possible to avoid falling into the trap of having a major expense with no savings. If you have more debt than you can handle you need to get help from a debt relief company before it is too late. Nothing will break your back faster than uncontrolled debt so start today by getting a handle on your debt.

I recently read a CNN article about the New normals that we will need to get used to with the expectation of a new dip in the economy. Not to mentioned that credit is really tough to obtain, even with good credit. So as the economy growth slows with bad reports in real estate, unemployment, low credit approval , and slowing down on personal and commercial lending, including bad credit loans. We may need to get used to paying things with cash. What?

Well, here are the new normals of the economy: Long term unemployment, with “finding a job” being the daytime occupation. The article further indicates, that with employment close to 10% and little or no hiring from the private sector, this could be the new normal. Another aspects are Renting vs Owning, as experts claim that real estate is no longer the great investment that they a few years ago claim to be, and more expected declines on property prices, people may expect to rent rather than buy a house. More Savings as people opt to save money due to the uncertainty of the economy, and Higher taxes for the rich.

When was the last time you saw a copy of your credit report? Do you know your credit score? Do you even know if it’s good or bad?

If you can’t answer these questions, you have some homework to do — especially if you’re planning to apply for a mortgage loan in the near future.

Here are some step-by-step instructions to help you obtain your credit reports, review them for accuracy, and correct any errors you come across.

Step 1 – Understand how your credit affects you.
When you apply for a home mortgage loan (or some other major purchase), you can be sure your credit will go under the microscope. Mortgage lenders will analyze your credit to find out what risk category you fall into.

When your credit score is high, your risk factor is low. In this scenario, Read more of this >>

Perhaps it’s happened to you – a period of mounting medical bills, loss of wages, natural disaster and even identity theft. Any one of these things can cause a person’s credit score to plummet. Today, more than ever before, a decent credit score can be a positive force in every aspect of your life.

We all want to have enough money to pay our bills and have enough money left over to live. To accomplish this, we’re expected to manage our money and our credit wisely. Our credit score is a picture of how well we handle our debts. What are the typical purchases and decisions that are affected by a person’s credit score?

• Applying for a job
• Buying a car
• Purchasing a home
• Renting an apartment
• Applying for insurance
• Requesting a credit card
• Opening a bank account

This is only a short list of products and actions that involve a credit score. So, what is this mystery called Credit Scoring? It all starts with your “credit report”.

The three national credit reporting agencies are Equifax, Experian and TransUnion (with smaller ones including ChexSystems). Read more of this >>