Signs of Credit Problems

DebtNo one borrows money to intentionally build up debt to an unmanageable level. Like the proverbial frog that realizes too late that the cool water has warmed to the boiling point, credit troubles often begin inconspicuously and seem to come without warning, but that’s never really the case. There are signs all along the way that point to trouble ahead. Being alert to these warnings will allow you to make the changes that are necessary to prevent a future of instability and financial worries. While it’s true that young people and new credit users are more vulnerable, credit problems affect consumers of every age, income level and social status.


Young Adults and New Users

Congress was so concerned about the debt troubles college students and Americans were experiencing, that they enacted legislation that limited their ability to get a credit card. While the rules were helpful in limiting the amount of debt young people could incur up to the age of 21, troubles typically cropped up when they struck out to live independent lives.


College graduates are particularly vulnerable to credit woes, as they no longer have access to student loans and may work full time jobs at beginners’ wages. Young adults, with high expectations of living out the American dream, may be disappointed with the reality, setting the stage for early credit problems. Everyday expenses, previously taken for granted, are now a necessary burden on a limited budget. With the realization that reality falls short of the dream, they may fill their lives with ‘stuff’ to compensate and live without a care for their financial future. But the signs cannot be denied.


Established Credit Users

The slippery slope that leads to credit problems is just as threatening to people who have a lengthy credit history and large incomes. For some it’s a simple matter of frivolous spending that needs to be controlled; while others are mishandling their credit accounts. It may be due to a single tragedy or from consistent mismanagement of their finances.


When the stress of trying to make ends meet becomes too much many people resort to borrowing, which isn’t a bad thing when used for the right reasons. Credit cards and bank loans are vital to establishing a credit history and serve as a bridge to better things. Many of the signs of early credit problems may be obvious to conscientious consumers, but life can sometimes become so hectic that the signs of credit trouble may be pushed aside to be dealt with later. Only later never comes.

  • Never follow a budget
  • Denied a loan application
  • Making late payments regularly
  • Using payday loans as a necessity
  • Buying essentials like food on credit
  • Account APRs have risen to extraordinary levels
  • Can’t afford more than the minimum required payments
  • Insufficient savings to cover expense, in the case of emergency

The sooner you admit that you’re headed or in the middle of credit trouble, the sooner you’ll be able to fix the problem. You will need to be conscientious about making changes, even to the point of altering your lifestyle. Neglect the issue and you may end up with accounts in collections, having purchases repossessed, eviction and bankruptcy.


  1. Establish a lifestyle that maintains financial integrity without undermining your happiness.
  2. Every purchase needs to be examined and justified against actual needs.
  3. Limit your credit purchases to emergencies and use cash for the majority of your purchases.
  4. Make a commitment to save a percentage of your income for emergencies.
  5. Construct a workable budget and commit to following it


Discipline is the key to prevent and keeping out of credit trouble. Prioritize the areas where you’re vulnerable, while focusing on paying more on your debt. Satisfaction may be the surprising outcome of living more economically. If you’re in too deep and fearful of making the necessary changes, you may need the assistance of a debt counselor. Rather than focusing on your losses, put your attention on what you have instead of what you don’t.


A healthy attitude will shape a future where all your needs will be met without the pitfalls that many experience when living for the moment. With perseverance and debt relief assistance from the right places, you can learn to manage and avoid debt and get back on financial track.


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