It can happen fast. Bills and loans can accrue rapidly. A steady income is irrelevant if living expenses exceed the limits. Opening new credit cards and seeking approval for new loans is not the solution if the surplus exceeds the supply. What are the credit warning signs of potential debt? Take the following quiz.

Choose TRUE or FALSE for the answer if the statement describes your financial situation:

1. I have more than six credit cards.
2. I’m unsure how much I owe in credit card bills and loans.
3. Over 85 percent of the time, I try to make the minimum payment due.
4. Usually, I am a few days late with my payments.
5. In the last 4 months, I have been denied credit.
6. Sometimes, I do not have enough money to make a minimum payment.
7. My loans and credit cards are almost at the maximum limit.
8. Occasionally, collection agencies contact me.
9. My bills exceed my income.
10. Sometimes, I apply for new accounts so I can have more purchasing power.

If you answered TRUE to more than six of the above statements, you are experiencing the signs of credit rating danger. You may consider debt consolidation or devising a budget. Late payments and several maximized bills will affect your credit rating, negatively.

Explore Your Debt Solutions

Bankruptcy
It seems like the magical solution to make your debt disappear, In essence, if you choose bankruptcy, plan to kiss your credit goodbye for a period of time.

A Personal Loan
Essentially, if you qualify, for an unsecured loan, to pay unsecured debt; then, you are simply transferring debt from one place to another. It is like committing financial suicide.

Debt Consolidation
An exceptional choice, debt consolidation achieves two purposes. Mainly, it assures that your debts are paid. Secondly, it can improve and maintain your credit rating by showing a positive payment history. Moreover, if you have a high debt to income ratio, paying off your debts quickly will enhance your credit rating.

Other Alternatives
Most importantly, contact your creditors and explain your current situation. Ask for help in the way of a new payment schedule. Pay more than the monthly minimum of your bills. The best way to avoid credit issues is to set up a budget plan. Finally, cease overextending your monthly income.