Nov 10, 2020
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It’s always annoying when a stranger slides into your DMs, and next year may bring even more unwelcome visitors: debt collectors.
The laws that govern how debt collectors can contact you have gone largely unchanged since 1977. However, the Consumer Financial Protection Bureau recently issued a landmark update, clarifying that they can reach you through email, text and even social media.
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There’s no limit to the number of times they can bug you on Facebook, Twitter or Instagram, though they’re supposed to buzz off if you demand it. And they’re also prohibited from exposing your debt to all your friends and followers.
The new rules take effect on Oct. 30, 2021, so there’s still time to take care of your existing debt before the hourly messages telling you to “pay up” start rolling in. Here are a few tips.
Get some free credit help
First things first: Knowing your credit score and getting your credit under control will put you in the best position to pull yourself out of debt.
That’s because a better score will better your chances of qualifying for low-interest loans and financial solutions that will save you money each month.
You can check your credit score for free through a number of online services. Credit Sesame, for example, will give you unlimited access to your score plus a number of helpful perks.
If your score isn’t great, Credit Sesame will provide you with personalized advice to bump it up. It’ll also inform you anytime your score changes, so you can easily track your progress and make adjustments to your debt-management strategy, if need be.
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Trade in your current debt
Once your credit score is in decent shape, it’s worth looking into whether you can consolidate your debt with a personal loan.
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A debt consolidation loan will allow you to bundle all of your non-mortgage debts together into a single monthly payment with a better interest rate.
You won’t have to keep track of multiple bills with different dates and different minimum payments. And the money you save with a lower interest rate can shave months (or even years) off the time it will take you to become debt-free.
The quote comparison site Credible will show you all of the debt consolidation options you currently qualify for, making it easy to find the one with the best terms.
Using Credible won’t affect your credit score, and it’s 100% free. In just a few minutes, you could find a loan that will help conquer your debt before the collectors come calling.
Refinance your mortgage
If you’re a homeowner, refinancing into one of today’s record-low mortgage rates could save you hundreds of dollars a month — money that could go a long way toward clearing your debt.
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Again, you’ll need to have a solid credit score if you want to qualify for the best refi rates. And refinancing comes with a number of upfront fees, so you’ll need to make sure your new loan is going to save you enough on interest to make the switch worth it.
To find the best rate on a refi, you’ll want to shop around for quotes from multiple lenders and compare your options. That might seem like a chore, but with the tool below you can compare refinancing options in just minutes.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Cut down your monthly spending
Now that you’ve reduced the amount of money you’re losing in interest, every dollar you put toward your debt has a bigger impact. Take a look at your monthly spending and try to identify areas where you can cut costs to free up more funds.
A good place to start is your phone and cable accounts. When’s the last time you called the cable company to ask for a discount? If your answer was never, you should try it out. Many telecom companies will give you a break if they think you might cancel.
Next, check to make sure you’re not paying for subscription services that you no longer use. The free app Rocket Money can immediately identify and cancel any subscriptions that you don’t want.
You might also be able to save some serious money by shopping around for a better rate on your car insurance. (Some experts recommend shopping around every six months.) According to the site SmartFinancial, which helps people compare quotes for free, you may be able to reduce the amount you spend by as much as $1,100 a year.
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Shane is a reporter for MoneyWise. He holds a bachelor’s degree in English Language & Literature from Western University and is a graduate of the Algonquin College Scriptwriting program.
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