Getting into debt is often inevitable, especially in today’s day and age where the cost of living is constantly on the rise, but wages are not following suit. Although certain amounts of debt can be easily manageable depending on the type of income that you are receiving and your other monthly expenses, getting into too much debt can have a lot of adverse effects on your life. Although there are ways to regain control over your debt, this can often be difficult.

Your Credit Rating

Debt can affect your credit rating both negatively and positively. When you have a manageable amount of debt that you are repaying each month without being late with your payment or underpaying the minimum, you will build up your credit rating and therefore will be seen as less risk by lenders in the future, who will be more inclined to accept you for more lines of credit. However, when you are in too much debt and are struggling to make repayments, your credit rating will be adversely affected, something which could label you as a risk and make it difficult for you to get more credit in the future. If you’re struggling with paying back multiple lines of credit each month, you may want to look into a consolidation loan – click here for more information.

credit rating

Your Finances

Being in too much debt can affect your personal finances in a number of different ways. When you are paying out a lot of money in order to repay credit cards, loans, or other lines of credit, you will be left with less money to cover your other expenses, such as paying your rent or mortgage, transport expenses, food, and your utility bills. Although many lenders will be able to work with you if requested in order to come to an agreement regarding a minimum payment amount which works well for you and allows you to have enough money to cover your basic expenses, this can affect your credit rating and you may still not have much money spare once you have met all your financial commitments.


Piles of English one pound coins arranged to represent a graph.


Stress and Mental Health

Being in a substantial amount of debt doesn’t just make it more difficult for you financially, it can also take its toll on your mental health and cause your stress levels to rise. In the worst case scenario, being in debt can lead to anxiety disorders due to constantly worrying about paying the money back or worrying about debt collectors knocking on your door. Or, you could end up suffering from depression with all of the stress and worry that being in debt brings and the feeling that you have failed yourself when it comes to your finances. If you are in debt and are feeling like this, it’s important to get help from a doctor or other health professional who can offer guidance and advice.

Pretty woman with cloud of words about stress

Although a small amount of debt can actually improve your credit rating and make your life easier financially, it’s important to avoid getting into too much debt as this can have many negative impacts on your life.



Via #MoneyMatters

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