Good and bad debt

Not all debt is bad debt. It's important to know whether you have good or bad debt before seeking credit help. If you have a lot of debt because you purchased an expensive car or house, you may not need credit help. If you can't afford your car payment or mortgage, consider selling your home or car for a less expensive one. Good debt is debt that pays for items that have a value and enrich your life.

If you can't pay the minimum

If you can't pay the minimum amount owed on a credit card then you know you are over your head. It can literally take decades to pay off a credit card if you only pay the minimum balance because of accrued interest. If you want to get out of debt, you have to pay as much as you can toward your credit card with the highest interest rate first, and then work your way through the rest. If you are unable to buy groceries at the end of a pay period, then you know you need credit help. You should never have to use your credit card to pay for fast food, groceries or entertainment because you are broke.

Low credit score

If you have a low credit score, it can hurt you in several ways. First, you may be given a higher interest rate when you try to buy a car or get a credit card. Also, you may not qualify for loans you need. To reverse the problem, make sure you don't have a balance on a credit card that is more than half of your credit limit. In other words, if you are allowed 10,000 on the card, don't run up a bill that is more than $5,000. Also, never have a late payment. You don't typically need more than two credit cards to establish good credit so know when to say, "No."

Relationships falling apart

You know you need credit help when your relationships are falling apart all around you and you are always arguing about money with a spouse or roommate. Money problems are one of the leading reasons people get divorced. If you find yourself spending money and hiding it from a spouse, you have a problem. You should be able to be open and honest about the money you spend and the money you save.

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