| Avoiding Loan Delinquency It If you have a loan and are struggling to make the payments, you could end up falling into loan delinquency. Delinquency can be a big problem, although if you take some steps to get yourself back on track, you won’t fall further behind. If you want to know more about how to avoid or get out of loan delinquency, then here are some useful tips to help you do just that. |
Checking Your Financial Health
Most creditors use credit scoring to evaluate your credit record. This involves using your credit application and report to get information about you, such as your annual income, outstanding debt, bill-paying history, and the number and types of accounts you have and how long you have had them. Potential lenders use your credit score to help them predict whether you are a good risk to repay a loan and make payments on time.
How Do You Manage Your Money?
Answer the following questions according to your present financial practices:
1. I pay the rent/mortgage payment and utility bills on time. |
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Always |
Sometimes |
Never |
2. I save 10 percent of my net income. |
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Always |
Sometimes |
Never |
3. I keep three-six months of my net income in reserve for emergencies. |
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Always |
Sometimes |
Never |
4. I plan ahead for large expenses, such as taxes and insurance. |
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Always |
Sometimes |
Never
|
5. I set goals and have a spending plan for my net income. |
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Always |
Sometimes |
Never |
6. I spend no more than 15% of my net income for credit & loan payments(exclude Mortage). |
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Always |
Sometimes |
Never |
7. I comparison shop for the purchase of most items. |
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Always |
Sometimes |
Never |
8. I keep track of my daily expenses. |
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Always |
Sometimes |
Never |
9. I balance my check book every month. |
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Always |
Sometimes |
Never |
10. I check my credit report once a year. |
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Always |
Sometimes |
Never |
SCORING |
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Give yourself 2 points for each ALWAYS; 1 point for each SOMETIMES; and 0 points for NEVER. |
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20 -15 Points : You are practicing goog money management skills. |
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15 - 10 Points : You are making an effort to improve your skills. |
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| 10 - 0 Points : You need to improve your money management skills. | ||
"Do You Need Help With Debt Problems?
Do you worry about how much you owe?
Are you spending more money each month to pay off bills?
Are you near or at the limit of your lines of credit?
Can you only make the minimum payments on your credit cards?
Are you late in paying your bills?
Have you had your phone, electric, or gas service shut off?
Have you postponed medical or dental appointments because you can't afford them?
Do you sometimes run out of money to pay for food, prescriptions or other medical needs?
Are you receiving calls from creditors about overdue bills?
Do you argue with your spouse about money?
If you answered YES to any of the above questions, you could be in financial difficulty and should take steps to re-examine your spending habits so that your income will cover your debts.