It is far easier to correct a problem before it has become full blown. This simple truth is particularly applicable to a person’s financial life. Nipping fiscal problems in the bud can prevent many negative long term consequences, such as ruined credit. However, in order to take corrective measures an individual must first be aware that a problem exists.

With this in mind, let’s examine some financial warning signs that an individual’s credit may be in jeopardy.

• Minimum payments are being made on credit cards each month.
• Credit cards are being used to pay other cards. This is a clear indicator that credit has been stretched too thin.
• Checks are being floated on a regular basis. This entails writing a check with the hope that money will be deposited into the account before it is cashed.
• Pay day loans are being utilized. These loans have outrageously high rates and are rarely used except in instances where a person’s expenses have overtaken their income.
• Credit cards are maxed out. This indicates a person’s over reliance on credit, and points to the fact that they have been unable to pay down the debt.
• Receiving calls from creditors. Creditors typically call in response to missing payments.
  Purchases (or bills) are being hid from family members. If there is no problem then there should be nothing to hide.
• The total amount of debt is unknown.
• Levels of savings are at zero. This provides no financial cushion should an emergency situation arise.
• Credit card cash advances are being used to pay bills. Due to the extremely high rates of interest, these advances should rarely (if ever) be used.

Each of these instances should act as red flags to warn individuals that a potential problem exists. Typically these signs indicate that people are spending money above their means. If this behavior goes unchecked it generally reaches a point where payments begin to be missed. When this happens it is only a matter of time before credit ratings are severely damaged. However, if these warnings are acted upon promptly then damages can be kept to a minimum. In fact, if action is taken quickly enough, the credit might be completely preserved. A person who finds themselves in this situation might want to begin by creating a personal budget. Information on budgeting can be found in your local library, the internet, or with the help a certified financial advisor.