Once I learned how to find out all my debts (even though I was scared) it gave me the power I needed to take charge of my finances. Learn how you can do it, too.
When you play peek-a-boo with a baby, he thinks you’ve disappeared because your hands are over your face. He’s totally surprised when you reappear by taking your hands away.
Are you playing peek a boo, too? Covering your ears and yelling “I can’t hear you!” whenever someone uses the “d” word (debt, that is) is a ton of fun, but it’s not a game you can win.
After all, you know your debts are hiding behind your hands. But instead of a kind face waiting for you, it’s more like a clown in a haunted house.
Sorry for the visual.
But I know, because I’ve been there. I hid behind my hands for years before life woke me up with a good slap. Don’t do what I did. Living this way means that debt is running your life.
Instead, make a plan to get out of debt. Once I came to my senses, the first thing I did was learn how to find out all my debts so I didn’t miss anything. Don’t worry, I’ll show you how. We’ll rip off this band-aid together.
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How to Find Out All My Debts And Start Getting Rid of Them
Gather your courage before you begin. It won’t do for you to find a long list of debts and put your head back in the sand. Feel empowered! This is the first step towards taking control over your finances.
If you’re already feeling discouraged, read this letter to the person who feels like giving up.
Ready? Let’s begin.
How Do You Find Out Who You Owe Money To?
There are actually a couple of ways to do this.
The first way is to go to each of the big three credit bureaus (Experian, Equifax, and TransUnion) and pull your credit. You are allowed to do this once every 12 months for free. You’ll want to check each of them, because often one will report something that the others don’t have a record of. And all of them can ding you if you don’t know about them.
Luckily, there’s a better way and it’s totally free.
CREDIT SESAME will pull your credit without affecting your score. (Sometimes when people run your credit, it can cause your score to lower. You’ll want to be careful with applying for too many loans at once, for instance. But checking on it yourself through Credit Sesame won’t cause this problem.)
I gave Credit Sesame a try myself to find out all my debts. First, no credit card is required! (Don’t you love it when they hold on to your credit card number “just in case” you want to buy something later? ugh) That’s a major plus.
You also won’t have to give them your entire social security number. (That always makes me feel squeamish.)
Right away, you’ll get your credit score, with information that tells you what your number means. You’ll also see information on all the debts you owe.
They’ll offer you cards and loans that you might qualify for. Before you apply for any new loans, make sure you’re confident that paying off debt will drive every decision you make for the next year. If that isn’t your mindset, you’ll only rack up more debt.
I absolutely love that they gave me a target emergency fund number! They even suggested bank accounts with good interest rates.
Things To Be Aware Of
Credit Sesame will only pull your report from TransUnion. So you still will want to check Equifax and Experian.
There’s another option, too. Though I haven’t tried Credit Karma yet, they pull from both TransUnion and Equifax. Credit Karma is also completely free, and there’s no reason you can’t use both Credit Karma and Credit Sesame for a clearer picture of your money situation.
Once You Have Your Credit Report…
Look it over carefully.
When you see your total debt number, remember not to freak out. There are tons of stories of regular people paying off 6 figure debts. You can do it, too. (It won’t be fast. But you’ll get there.)
Keeping an eye on your report is a good way to monitor your credit and find out if your ID has been stolen. Because you can only pull reports from the credit unions only once every 12 months (unless you pay them), Credit Sesame is actually a better way to keep a regular eye on what’s being reported on your credit.
How Do You Find Out If You Have Something in Collections?
Most collections agencies are rabid about tracking down people who owe them money. But if you aren’t sure, look through the list of debts you got from the credit agencies or from Credit Sesame or Credit Karma.
If any of these debts are so old you had forgotten about them, your best bet is to contact the company directly. They’ll be able to tell you if they still have the debt or if they’ve sold it to a collections agency.
But there’s a difference between forgetting and not being responsible for the debt. If something looks fishy, investigate it before you pay a dime. With new security breaches coming out all the time, it’s possible that someone else ran up debt in your name.
Sometimes, you’ll even find that you weren’t credited for debts you know you’ve paid in full. In either case, here’s info on what to do next.
Always be very careful when dealing with collections agencies. They are rife with fraud, whether it’s a Nigerian prince pretending to work with a company or a legitimate agency using illegal methods to force you to pay money to them. If this is a struggle for you, learn more here.
How Do You Find Out Why Your Credit Is Bad?
Let’s say you pulled your credit and you can see the list of everything you owe. But you just aren’t happy with your credit score. Why is your score so low?
Usually it’s due to one of these circumstances:
- Owing too much money compared to your income (Called debt to income ratio)
- Missing payments
- Old debts you haven’t paid in years
- Debts you might not even really owe (this is why checking your credit is so important!)
- Little or no debt history
Paying off legitimate debt is a quick way to improve your score. Every time you prove that you are trustworthy, people will be more likely to loan you money in the future.Anyone who is trustworthy in little things is trustworthy in great; anyone who is dishonest in little things is dishonest in great.Click To Tweet
When you pay off debt that has entered collections, be aware that this will not improve your credit score (no matter what the person on the other end of the line promises). HOWEVER, this ding can only live on your report for up to seven years.
Meaning the sooner you get rid of it, the quicker you’ll start the clock ticking. Assuming you change your payment habits, you’ll eventually raise your score. Every day you put off payments takes you another 7 years plus a day away from improving your score.
If you don’t have enough credit history, the unfortunate truth is that getting into debt is the way to raise your score. Dave Ramsey hates credit scores for this reason. But most of us live in a world where we need to establish good credit.
My advice? Open a credit card with the bank you use the most. When you go online to make your bill payments, you’ll see the balance for your credit card listed every time. This will remind you to pay the card in full.
So if you use a credit card at the gas pump, for instance (for earning points on a credit card while you protect your checking account from card skimmers!), be sure to pay off the card when you get home. This will establish that you as a good credit risk, improving your score.
For this purpose, we use the Chase Freedom card. The points we earn can be used directly on Amazon. But please do not open a new credit card if you already have high debt!
Learning how to find all my debts changed my life.
It’s the first step you’ll take towards taking control over your finances. Don’t let calls and letters from people dictate what you do with your money. Make a plan for yourself.
How do you control your emotions when you feel overwhelmed?