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4 Tips to Tackle Your Midyear Debt

"The summer months are a great time for you to reevaluate your financial resolutions from January and recommit to practicing smart financial habits that can lead to living with less debt," says Julie Springer, a consumer education director at TransUnion. "Giving your credit health a midyear checkup can identify areas to work on -- and also allow you to celebrate the progress you have made during the first half of 2013."

To lower your personal debt levels, here's what TransUnion advises:

Know your score. Start with your current credit score. You can get a free credit report (but only once annually) at AnnualCreditReport.com.

Break out your calculator. TransUnion advises calculating how much you usually spend paying each debt and how much interest that debt collects per month. "If you have available cash after paying all your monthly minimums, determine which debts need to be paid down first," the firm says. "For example, pay down credit card debt and any other high-interest rate loans or high annual fees first."

Plan to negotiate -- then actually negotiate. To further reduce your debt payments, reach out to your creditors and talk up a reduction in interest rates tied to your credit cards and auto loans. Creditors are amenable to that dialogue, especially if you throw in some good-faith, upfront money -- or in the case of credit card debt, threaten to take your business elsewhere.

Look to refinance your larger loans. Interest rates for things such as mortgages and auto loans are rising, so it's a great time to try and lock in a lower rate, especially since most economists expect interest rates to keep rising.

TransUnion also advises drilling down deep into your personal finances and crafting a monthly budget that actually works. "See exactly how much you can afford to pay each month by subtracting your expenses from your monthly income," the firm says. "Divide the remaining amount between the accounts, paying the most to the debts with the shortest terms and highest interest rates. Create a payment calendar with the due dates and the payment amounts you just calculated for each bill. Sign up for automatic bill payment through your bank or register for online payments."

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