As we enter adulting, keeping track of our credit health should be requisite. Now that we’re able to apply and qualify for credit products, we should also learn to maintain an optimal credit score. With a good credit rating, we can enjoy many benefits like higher credit limits, access to more credits, job opportunities, and more negotiating power, among many others.

However, many individuals have lost track of their credit health for many reasons. One reason is not knowing the signs that your credit health needs attention. To avoid this to happen, we will discuss seven signs that you must closely look at your credit health. 

You Spend More Than You Earn

If you have a credit card, this sign should be something you should be wary about. Credit cards are financial tools you can use to purchase things and worry about repaying that later. However, you should make sure you pay your monthly bills on time so you can avoid late fees.

More than that, it’s really easy to get loans these days, as there are reliable apps that loan without job requirements like CreditNinja. But, it’s really important to keep your credit purchases lower than your earnings. If you spend more than you earn, you’ll be going deep into your debt every month. That’s how it ends in many cases.

You should only get a credit card if you’ve built a habit on spending less than you earn. That way, you can pay your bill in full every month and avoid unwarranted interests in your purchases. 

You Have No Idea How Much You Owe

Many borrowers tend to ignore their debts when things get too overwhelming. However, to face your finances, you should know how much you owe. You can only do that by pulling your most recent account statements and making a list of your debts. This way, you can make a plan on how to deal with it. 

You Can’t Pay Your Bills on Time

When you have multiple types of debts, it will be much challenging to manage them. It will become more complicated with the addition of credit cards. As already emphasized, that’s because credit cards charge late fees when you’re paying behind due dates.

Besides that, your card issuer can also report the late payment in your credit file if your bill is 30 days late. This will result in lower credit scores. In some cases,there will be a 100-point deduction just from a single late payment. 

There are some methods you can try to avoid later or missed payments. You can automate your payments through your mobile banking app. You may also use your phone’s calendar and add monthly payment reminders. 

You Hide Purchases/Statements from Your Loved Ones

The main reason why many borrowers don’t want their loved ones to know about their purchases and statements is that they know their family or partner will not approve. When you feel like you can’t be honest to your loved ones about your debts, we can assume you have too much of it. The last thing you know, you find yourself in the same place of a worse year later. 

You Feel Stressed About Money

Your debt has gone out of control when you struggle to sleep at night. Stress related to debts are serious problems that may lead to other medical conditions. Chances are you keep on thinking about your due dates and if you’re still able to pay it. 

There’s a way to slowly eliminate the stress and that is to face your debts, make a plan on how to repay them, and consult a trusted financial professional to help you find a solution.

You Buy Something to Make Yourself Feel Better

We often feel better after buying something for ourselves. This is true to all as making purchases actually boosts the production of dopamine and endorphins, making us feel better. However, if you make a habit, it will eventually lead to overspending. Some people even develop shopping addictions, where they spend on things they don’t even need. 

Buying something for yourself as a compensation for your hard work is fine. But, making purchases just because you like how it feels isn’t justifiable. Always take time to evaluate if you really need to spend money on something. This way, you can avoid rush purchases and keep your budget on track.

You Avoid Debt Collectors’ Call

When you always put your phone on silent to avoid debt collectors’ calls, it’s a sign you can no longer afford to pay your debts. Sure, you can temporarily avoid these phone calls but creditors can sue you for the delinquency. If they win the lawsuit, they can freeze your bank accounts or get the court permission to seize your wages. 

Takeaway

If you’ve come to the point where you’re asking yourself if you have too much debt, that’s probably the best sign that your credit health needs attention. There might be many factors that contributed to your situation right now, but recognizing the problem is the first step towards resolving it. So, if you have more debt than you can handle, it might be time to evaluate by looking at the seven signs we have covered here and seeking debt help afterwards.