Good financial planning is a must for everyone. Let’s help you find out if you’re heading for trouble when it comes to your finances. Here are the signs you should look out for.
Let’s help you find out if you’re heading for trouble with debt. Here are the signs you should look out for.
- Stretching those payment deadlines
If you find that you are unable to keep up with the deadlines and due dates for the payment of your Credit Card bills and loan EMIs, you’re heading into dangerous territory. Why is it important, you wonder? Not honouring payment due dates can hurt your Credit Score.
Don’t know what your Credit Score is? Click here to check it for free.
- Making minimum payments a mammoth task?
If you’re finding it difficult to make the minimum payments on your Credit Card, then it means your financial status is in the red. Using a Credit Card for your expenses is great because you have time to pay your bill and it’s interest-free plus you get reward points and cashback! However, to avoid getting into debt and paying interest on your Credit Card, make it a point to pay your bills on time and in full.
If you’re looking for a rewards or cashback Credit Card, you can click here to check your eligibility.
- Your request for credit was declined?
When you apply for a financial product such as a Home Loan or a Personal Loan, lenders will review your Credit Score to find out if you can be a reliable customer when it comes to repayment. In case your credit report is littered with remarks about missed or delayed payments, you’ve got to watch out. Can you see the red flag yet?
Additional Reading: When NOT to Use A Credit Card
- Your income is much less than your expenditure
Take a moment to compare your spending with the amount of money you earn. You are going to be drowning in debt if your expenditure is more than your income. Check your debt-income ratio. How you ask? Just divide your fixed monthly debts by your income. In case you get a percentage result anywhere above 40% you have a financial crisis looming on the horizon.
- Maxed-out Credit Cards?
If you reach or exhaust the credit limit on your Credit Card, your Credit Score will dip and your eligibility for any further credit could become questionable. Don’t be surprised if you face a rejection or two.
- Is paying late payment fees becoming a habit?
If you are repeatedly paying a late fee on your bills, you are either making a huge mistake with managing your money or you’re being lazy about meeting payment deadlines.
Did you know just one late payment on your Credit Card could lower your Credit Score by as much as 50 points? That may not seem like much, but it could make all the difference between having a good Credit Score and a poor Credit Score.
Let’s find out if you’re headed for trouble, shall we?
We’ll help you figure it out. If you notice only one of these financial red flags, you might not be that badly off. But we say better none than even one.
But wait, in case you notice three or more of these red flags, it means you need to seriously reconsider your financial planning strategies and get back on track.
Get smart about your money.