When most Connecticut residents think about insurmountable debt, they often envision an individual who has embraced indiscriminate spending and other questionable actions. In reality, however, many people find themselves in serious need of debt relief, even those who have carefully managed their money throughout their adult lives. According to a recent survey, 38 percent of Americans who have a credit score at or above 660 are currently struggling with high credit card debt.
It is important to understand that a number of factors go into determining an individual’s credit score. It is possible to rack up considerable debt while maintaining a very high score. Unfortunately, if an unexpected event causes a severe financial crunch, it is easy to enter a debt tailspin. That can happen even in cases where individuals or families have been very cautious in their spending and saving habits over the years.
A big part of the problem is the comfort with which many Americans carry a monthly balance on their credit card accounts. Paying the minimum balance is never a solid financial approach. It does little to pay down the principal debt, and allows interest to continue to mount.
Individuals who have high credit scores but carry high balances and multiple accounts are at an increased risk of financial turmoil if a sudden change of circumstances should occur. An unexpected illness, sudden job loss or family situation requiring an influx of cash can all leave an individual struggling to meet his or her monthly obligations. In those instances, Connecticut residents may find themselves in need of aggressive debt relief.
Source: madison.com, “Even Americans With Good Credit Are Struggling With Debt“, Maurie Backman, Sept. 20, 2017