Co-Written by Kendra Targac

For many people, reducing debt and raising your credit score is a lifelong challenge. We here at Katy Christian Ministries recognize this hurdle and want to do our part in helping our community face this challenge.

Recently, we sat down with Kendra Targac, Vice President of Commercial Lending at BancorpSouth. Targac passed along some critical knowledge that we believe can be of value to members of the KCM clientele.

Consumers are always looking for a quick fix to increase their credit score.  There are simple things they can do to increase their credit score and pay down debt. 

  1. One of the main items is to protect yourself from fraud. When consumers lock their credit, it blocks 90% of fraud.  When fraud occurs, it takes at least six months to correct your credit report.  By simply locking your credit you can prevent being a victim of fraud. Consumers do not realize that their personal information can be bought on the darkweb for as low as four dollars.  The best way to lock your credit is to visit all three credit bureau sites (Experian, Equifax and TransUnion).  
  2. If you have credit cards, keep the utilization rate to 30% or less of the available credit limit.  When you follow this rule it will maintain and improve your score over time.  If your credit cards are maxed out or over the utilization rate it will drop your credit score significantly. 
  3. If you have debt, make sure all creditors are paid on time.  One 30 day late payment will have an adverse effect on your credit score. 

According to Experian’s 2019 consumer debt study, total consumer debt in the U.S is at $14.1 trillion, with Americans carrying an average personal debt of $90,460.  Many consumers are unaware of how to get out of debt.  Below are a couple simple steps to help you restructure your debt. 

  1. The debt snowball method is a debt reduction strategy where consumers pay off debt in order of smallest to largest, gaining momentum as they knock out each balance.  When the smallest debt is paid in full, they roll the money they were paying on that debt into the next smallest balance and so on.  
  2. Debt consolidation loan.  Consumers can apply for a debt consolidation loan which is recommended to do at a local community bank or credit union as they offer the lowest rates.  This type of loan will be the total of all credit cards, auto loans or personal loans a consumer may have and consolidate into one loan with fixed monthly payment.  Consumers need to have discipline and not use their credit cards that are now paid off.  

Above all, do not go to a title loan to help pay off debt or cover bills.  Title loans have outrageous interest rates and many consumers are unable to pay back the high-interest loan.  Always visit with a local community banker so they can help guide you on the right steps to get a proper debt solution.   

Becoming financially educated is a critical step on the road to becoming independent. To help educate our clients who are wishing to become more financially independent, KCM is offering classes through our Family Independence through Resiliency and Self-Sufficiency Tools Program, or FIRST for short. Get started today to learn how to manage your debt, improve your credit score and grow your emergency savings!

Katy Christian Ministries

Author Katy Christian Ministries

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