How to Calculate Your Overall Debt Balance

Knowing how much money you have is the first step toward debt relief. You may find this out by pulling up your credit report, going through your old letters, and calling your creditors.

What you can’t see, you can’t battle. So, if you’re on a debt-slaying quest, you must first determine how much you owe.

However, finding your debts might seem like a scavenger hunt. You’ll have to search in many locations since there isn’t a centralized portal (at least not yet) where you can check every single balance associated with your name. This post will provide you with some tools and advice to help you board that life raft, grab a paddle, and start straightening out your financial life.

How to Calculate Your Total Debt Balance

The good news is that calculating your overall debt amount is fairly straightforward. You’ll just need to follow five simple steps:

  • provides a free copy of your credit report.
  • Make a list of all of your credit report’s active accounts.
  • To discover your current balance, call your creditors or log in to your online accounts.
  • Add up the total amount owed on each loan. Every 1000 credit card for bad credit, if you have any, must be counted.
  • Examine previous statements for any debts that were not disclosed to credit reporting agencies.

Going through this procedure is critical because understanding precisely what your financial commitments are provided you the greatest opportunity of developing a strategy to pay off what you owe and become debt free.

Examine Your Credit Reports

The first step in discovering how much debt you have is to get credit reports from the three main credit bureaus: Experian, TransUnion, and Equifax.

Creditors often report debt accounts to one or more credit bureaus, which subsequently include them in the credit report they keep. Credit cards, personal loans, mortgages, and other account types may be seen on your credit reports. Your credit report shows the amount owing on each account, as well as the account’s status and payment history, as well as the contact information for the creditor managing the debt.

You may acquire one free copy of your credit report every 12 months under federal law by visiting You may also get a free Experian credit report at any time. The three agencies are providing free weekly credit reports to all U.S. customers at through April 20, 2022.

Some Debts Could Not Appear on Your Credit Report

Although most large lenders report account activity to credit agencies, they are not obligated to do so. As a result, a creditor may refuse to disclose your account information with credit bureaus.

Depending on how old the debt is, it may not appear on your credit record. Accounts canceled in good standing are erased from your credit reports after 10 years, even if they initially appeared on your records. Accounts that have been canceled due to late payments are erased after seven days.

There are however exceptions to the sorts of debt that you may anticipate seeing on your credit report. Medical debt, for example, is normally not displayed on credit reports unless it is extremely delinquent and reported as a collection account. Retailer payment arrangements are also not often reported to credit bureaus.

In certain situations, the account will show on your credit report only if the creditor transfers it to a debt collection agency. The original creditor is usually stated with the collection account.

If you don’t find a debt on your credit report, you may go through previous invoices or call creditors to figure out what you owe.

According to statistics, US homeowners owe about $15.31 trillion as of 2021. This equates to an average personal debt amount of $92,727. So don’t blame yourself if you’re not sure how much debt you have.

Make a List of All of Your Credit Report’s Active Accounts

Accounts that have been charged off, dismissed, or paid in full are likewise included in your credit report. When calculating your overall debt amount, you should concentrate on open accounts where creditors may attempt to collect from you.

If a debt is charged off, the creditor who owed you the money has given up attempting to collect it; nonetheless, a collection agency may try to collect the money from you and may pursue claims against you until the statute of limitations for collecting on a debt has run. If, on the other hand, the debt has been discharged in bankruptcy, it is no longer recoverable, and you do not need to worry about adding the account to your overall loan sum.

Keep in mind that your credit report is just a snapshot in time since creditors normally report on your account balance and payment history once a month. Though you have an open credit card account, even if the amount listed on your credit report is $0, you should put it on your list of debts since you may have changed money on that account since the previous time the creditor updated the reporting agency.

How to Deal with Debt

Now that you know how to locate your obligations and their corresponding amounts, it’s time to devise a strategy to grab the “debt bull” by the horns. Choose the best debt repayment strategy for you.

The snowball strategy

The snowball strategy is investing whatever additional money you have toward paying off your debt with the lowest amount first. Once that’s paid off, you’ll take the money you were paying toward it and apply it to the next obligation on your list with the lowest amount, and so on.

This strategy is very popular among individuals who have a lot of credit card debt with comparable interest rates.

Avalanche strategy

The avalanche strategy, on the other hand, prioritizes paying off loans with the highest interest rates first, regardless of balance. This debt repayment approach is very beneficial for individuals who have a jumble of bills (student loans, credit card debt, personal loans, auto loans, etc.).

This strategy is the most “mathematically accurate,” since it will save you a significant amount of money on interest, but it will take some time to see returns, particularly if your highest interest obligations have large amounts.

Whether you’re on team snowball or team avalanche, Griffin believes the most essential thing is to find a payout method that works for you and keeps you motivated to reach your objectives.


Life might change when you’re paying off debt, which may need rearranging your accounts if your income fluctuates, your family develops, or you pay off bills. Review your strategy on a regular basis – once a year, for example – to monitor your progress and make improvements as needed.

Now that you’ve gathered all of your bills, the following step is to decide on a debt-reduction plan. Organizing your debt allows you to evaluate tactics and choose the one that will be most beneficial for your budget and debt repayment goal.

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