Debt management plan (DMP) is a special program introduced by most credit counseling agencies to help the serious debtors work their way out of debt. But not all debts can be included in a debt management plan. Although you have chosen to enroll into a debt management plan, you must do your own debt management for other debts that are not included in the DMP. Here are 6 debt management tips for you to work toward debt relief:
Tip #1: Keep record of your other bills.
A debt management plan typical will include only unsecured debts such as credit card and personal loans. If you have taken secured loan such as mortgage or car loan, be aware that those loans normally will not be handled by a debt management plan. Make you understand which debts are being paid by your monthly payment to the DMP. For those debts which are not covered in DMP, make sure you keep a record on the bills.
Tip #2: Make sure your payment reach your creditors on time
Although you make a single payment to DMP, it is your responsible to ensure the money is reached to your creditors on time, else if your payments late, you may incur additional late charges. Find out when your DMP will disburse payment to creditors and make sure the disbursement is matched with your billing cycle; if not, you must do an adjustment either with the DMP agency or notified your creditors and get their approval to reset the billing cycle to inline with DMP.
Tip #3: Check your credit card and loan statement
Have your credit card and loan statements reflect the terms of DMP agreement such as lower interest rates, waived fees or other concessions from your creditors? If it's does not show the figures as agreed in DMP, you must quickly call up both DMP agency and your creditors to investigate the mismatch.
Tip #4: Check your credit report once a year
In U.S, you can request your credit report for free once a year. Be sure you do that and check all the information reported to make sure it is up to date. And, if you continue to pay your monthly payment on time, you should see an improvement of your credit rating reflected in your credit report.
Tip #5: Don't add more debt with new loans
The rule of thumb to be debt free is: don't add more debts to your existing debts. In fact, some of your creditors will back of the DMP if they found out you are applying for a new loan while still with DMP. If you really need to get a mortgage or car loan, seek for professional advices from counselor from counseling service offered by the DMP agency.
Tip #6: Love your money
If you want the money to love you, you must love the money. Develop a healthy relationship with the money. Learn how to manage your money with a budget plan and know where your money goes. Reduce or cut off unnecessary expenses so that you have more money to put toward your debt. Take advantage of credit counseling offered through your DMP agency. Attend the education session about personal budgeting organized by credit counseling and learn more from their education materials.
Summary
If becoming a debt free is your goal, then debt management is your responsibility. Besides enrolling into Debt management program offered by credit counseling, you need to have your own debt management plan to cover all your debts if you want to achieve a total debt relief.
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