How to Fix Your Credit Report Part 8

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How to Fix Your Credit8

 

Part 7 of the series, How to Fix Your Credit – Personal Finance Series, was about my favorite trick of eliminating debts fast – 0% balance transfer offers. Now let’s touch on something that you should be able to do fairly easy, using nonrecurring/unexpected income towards your debt.

Put All Nonrecurring Income Towards Your Debts

So now that we have established that you can pay more than your minimum payment, the question is – how. Well, for starters put all nonrecurring income towards your debts. Do not wait and try to apply it on the next billing cycle due date.

If you just made a payment, you may need to wait 1-2 business days, but then go ahead and submit it. The more you reduce your principle balance by, the less interest is charged on it.

Examples of non-recurring income would be:

  • Income tax return
  • Accident settlement
  • Freelance income
  • Selling items from your home
  • Commission bonus

Usually, when you receive these types of one-off payments, you see this as an opportunity to go on a shopping spree. You must break this mindset if you want to easily pay down your debts.

Now, once you know this money is coming in, I advise you to transfer it to an account you are not going to look at! Once that money has dropped, schedule a payment immediately so it can transfer out. Otherwise, if it lands into your main checking or savings account, you just keep looking at it as though it’s burning a hole in your virtual wallet!

Stay tuned next week for a few final options of eliminating these debts.
Be sure to keep up with the series. Below, you can check out the series on Pinterest and pin them for later.
Follow I-S-Diva’s board How to Fix Your Credit: An ISDiva Personal Finance Series on Pinterest.

~ Independent, Smart, Diva! Like this post? Please share with your friends!

Comments

  1. says

    Thats a great point if you can avoid the urge to splurge when you get those one time payments you will save yourself thousands of dollars down the line. I hold a yard sale every spring and all the money I earn no matter how much it is goes towards paying off debt. Over the past couple of years I have earned around $2,700 just from holding yard sales! Now we are one credit card paid off closer to being debt free!
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