Military members who protect our country have plenty of things to worry about – debt shouldn’t be one of them. While many members of the military do not have excessive amounts of debt, a 2010 survey found that one in four had more than $10,000 in credit card debt, and 10% of survey respondents had more than $20,000 in debt.
If you are in the military and have problems controlling your debt, consider these tips to help you get your debt under control – and eventually eliminate it.
Make a budget
You’ve probably heard this before, but it’s worth repeating: Make a budget, and stick to it. Begin by looking at how you spend your money and assessing your fixed costs. Take a look back over the past few months to figure out where you stand now. Once you have that figured out, determine where you’re spending too much money, and then make your budget.
It needs to be realistic so you can stick to it, but looking at your spending habits in black and white can be sobering. Although this might not be fun, it’s an important first step.
Begin by paying off smaller debts
Eliminating your debt can be daunting. Instead of thinking about eliminating all of it at once, set smaller goals for yourself. Consider eliminating your smallest and/or highest interest debts first, while making minimum payments on your other debts. Knock one debt out at a time until you have worked your way through all of them.
Even if this process takes a number of years, having a plan and realistic debt-payment goals will help you get there.
Learn about the SCRA
The Servicemembers Civil Relief Act (SCRA) is a program that provides protections from civil actions against service members who are called to Active Duty. If you are an active duty service member, the SCRA can protect you in a number of ways, ranging from capping credit card and mortgage loans at a 6% interest per year while you are on active duty, to preventing credit card lenders from denying or revoking credit.
You can learn more about it on the SCRA website. There are more details in the bill, so make sure you read through the website to learn all of its protections.
If you’re trying to get out of debt, you’ll also want to start to rebuild your credit score. When working on eliminating and reducing debt, it is important to attack your problem from all sides. Your score may be lower than it should be because of false records entered by the credit reporting agencies. Our knowledgeable analysts can help you detect and eliminate these incorrect records that may be keeping your score down and preventing you from getting better interest rates on loans.
To learn more about how Ovation can help build your credit score, check out these frequently asked questions and contact us today.