Money Matters Now

The average credit score across the U.S. is 723. Approximately 58% of Americans have healthy credit scores ranging from 700 to 850. This percentage constitutes 13% having scores from 800 and above, 27% with scores 750 to 799 and 18% with scores from 700 to 749.

But what about the remaining 42% of us? Well, there are those of us who don’t even know what our credit score is and we’re afraid to find out. We’re the people that need credit repair. There are many reasons for taking action to improve your credit. The obvious reason for credit repair is to improve your credit score so you can afford big-ticket items such as a car, furniture, that vacation to Tahiti you’ve been dreaming of or the purchase of a new home. But, what happens when unexpected events occur such as the illness of a loved one, loss of a job, sudden economic downturns, such as the recent stock market crash or loss of employment? In these cases, having immediate access to funds is crucial and if you have little or no savings, where can you turn? You can turn to your available credit. But what if you have bad credit? Then what?

Most of us who need credit repair have obviously lived beyond our means. We have bit off more than we can chew. We’ve spent more than we make and now we owe money to one or more creditors. It’s nothing to be ashamed of. We don’t need to stick our head in the sand and do nothing to repair our credit problems. When we ignore the problem, hoping it will go away, all the while, our payments are being attacked by higher interest rates every month and doubling our balances, making our situation worse. It’s never too late to repair your credit and the worst thing you can do when you are in debt is to pretend it doesn’t exist.

There are several ways to begin repairing your credit. One way is to contact your creditors and negotiate a payment plan that will be mutually agreeable to both parties. If you can’t come to a settlement with your creditor then consider seeking assistance from a credit counseling agency. These agencies can help you assess your debt and help you to create a budget that will allow you to begin making payments against your debt that is more affordable to you.

However, be aware that there are many fraudulent companies out there claiming they can remove bankruptcies and other bad information from your credit report. These companies charge fees upfront and also charge hidden fees that can cause you to fall deeper into debt. Do your research. Even if the agency says they are non-profit, don’t immediately trust anyone. Get online and search for reputable credit repair services or ask your friends and family to refer you to a good source of credit counseling. Once you find a service you think is trustworthy, check them against the Better Business Bureau, the FTC (Federal Trade Commission) and your District Attorney’s office.

Also, when re-building your credit, remember that the most important factor to focus on is the ratio of your account balances to your credit limits. A good policy when utilizing credit is to use only 30% of your available credit and if you need more credit, apply for another credit card, maintaining the same rule. This way you won’t max out one card, which causes you to get in too deep. The second most important factor is making your payments on time, proving to the credit companies that you are a trustworthy borrower who can pay off their debts.

For more information concerning credit repair, visit the following websites: myfico.com and ftc.gov. They have a plethora of information on credit and will be a good starting place on your journey to credit repair. Begin today to repair your credit. Fixing your credit doesn’t happen overnight. It takes time to repair it. But, if you stay vigilant in your quest for repair, you credit report may come up smelling like roses.

By: Jill Mohler

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Today more then ever there is a growing number of people over burdened by debt they cannot pay down. A side effect to this problem is that many consumers now have very low credit scores, this makes getting a more affordable loan to consolidate the debt they do have next to impossible.It just seems like a vicious circle to many people caught up in it.

Although there are companies that can help you increase your credit score the average cash strapped person just cannot afford to pay for this type of service. All hope is not lost because there are self credit repair kits available that can help the consumer fix their own credit report for a lot less money then a paid service charges. The decision to purchase a self credit repair kit that includes a good credit repair letter template for you to use is a critical first step towards better credit and getting a good debt consolidation loan.

The importance of a good credit repair letter template cannot be over emphasized. Without the proper formatting and all the required information listed, your dispute letter may not be properly recognized by the credit reporting agencies. An improper letter will cause many delays and prolong your credit repair process. A properly formatted letter will increase your chances at having derogatory accounts removed from your credit report.

A good credit clean up guide should have everything you need to accomplish your credit goals. However the credit repair letter template is the most important tool that you will need in your efforts so be sure that the kit or Ebook you purchase contains this very important piece of information.

By: Darin Sewell

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Did you know that credit repair could be accomplished without outside help? Your local library may contain the books you would need to help you rebuild or repair your credit score.

To get started, you need to learn what your credit report says about you. You can gain this information by writing to each of the credit bureaus and asking for a copy of your own credit report. You can do this online by visiting http://www.annualcreditreport.com or by writing to one of the three major credit bureaus.

Credit Report Bureaus to Contact

The following are credit bureaus. They hold on to reports of your credit history. Write to each for information on how to get your credit report.

Equifax Credit Information Services, Inc.

P.O. Box 740241

Atlanta, GA. 30374

Call Equifax at 1-(800) 685-1111 to order a credit report by phone. To place a fraud alert on your credit report with Equifax, call 1(888) 766-0008

Website address is http://www.Equifax.com

Trans Union LLC

Consumer Disclosure Center

P.O. Box 1000

Chester, PA 19022

Website address is http://www.Transunion.com

Call Transunion at 1 (800) 888-4213 to only order free credit reports

Experian

National Consumer Assistance Center

P.O. Box 949

Allen, TX 75013

Call 1 (888) EXPERIAN to order credit reports or place a fraud alert on your credit report.

Website address is http://www.Experian.com

How To Review Your Credit Report

Be sure to read up on the directions for correcting your report. For example, if you find information that does not fit your true history, you simply need to write and contact the credit bureaus. Each of them has prepared instructions for reporting errors. If you find information that is not entirely correct, you can report this as directed and explain how it is incorrect.

If there is something that you are not familiar with, ask the credit bureau to give you the name, address and number of the institution that may be giving a false report. You may be able to sort it out and fix your credit further.

After all this information has been corrected, submit it to the designated credit bureaus. Be sure to keep a copy of this information for yourself as well for your own records. If anything should get lost in the mail, you’ll be able to make a quick copy and submit it.

You Don’t Have To Repair Your Credit Alone

That’s how easy it is to actually repair your credit report, though even this process may be overwhelming. If you find that you are nervous about going through the process of credit repair alone, you may ask for assistance. Credit repair companies are available and for a small fee they can assist you with your credit repair.

If you choose to try a credit repair company, do be sure to check out the company before forwarding any money. Check to see if your credit repair company is registered and bonded as a credit service organization. You can check with the secretary of state’s office to be sure. Always check that a credit service is registered before getting involved with or paying any company.

No one should have to suffer with a poor credit score, when it is simple to get back on track with a few easy repairs. You don’t even have to go at it alone. There is always help available when you need it.

By: Lee Harrison

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By simply reading this article, you have taken the first step to sorting out your debt. This is vital as so many people find it much easier to just ignore their spiralling debt, pretending it isn’t a problem. In reality however, it’s only getting worse.

The next step is to talk to the organisations you owe money to and let them know that you are having problems, the sooner this is done the better. With any luck, they should be able to set up some sort of specialised payment plan, such as lowering interest rates, or monthly payments; making the repayments more manageable.

If you have more than one debt, then you need to figure out which of your debts are ‘priority debts’. Such debts take priority because not paying them will have serious consequences such as losing your goods and/or home, disconnecting power supplies and finally being sent to prison.

Probably the most important of these are any Mortgages or Secured Loans that you may have, which failing to pay would result in losing your home.

Further methods that can be taken to help reduce your debt include:
Transferring Credit Card Debt to a card with a low or 0% introductory rate Check Credit Reference if you have been refused credit and you know there is no reason for it, it may turn out that there is an error on your credit record Use Any Savings to pay off debt as the interest paid upon savings is generally far less than what is charged on borrowing, it makes sense to use any savings to clear debt

Although the journey out of debt can seem hopeless at best, it isn’t impossible, no matter how far in debt you may be. An excellent example of this is the ongoing effort that one blogger is making to become financially independent.

At the start of this year, a 25 year old single mother from central Florida decided to take the first steps to taking hold of her finances. She set herself realistic financial goals, namely; to have her credit card paid off by the end of the year and to buy her first home early next year.

With this in mind she has set up a personal finance blog, where she has detailed amongst other things, all her spending habits and outgoings since the beginning of the year.

She has made numerous pro-active changes to her everyday life, some of which include; moving to a lower rent apartment; cutting utility usage; and contacting her loan company to switch to a lower APR. Such change will result in a saving of $3180, which will either be used to pay off her credit card debt of go towards savings.

Her on-going methods and use of on/off line tools are helping her meet these goals.

By: Liam Gerken

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An Overview of Re-Aging

Credit card issuers have the ability to bring your account current and wipe out your entire record of late payments using a procedure called “re-aging”. Re-aging, if managed properly, can be a fantastic credit repair tool. The re-aging guidelines were set by the Federal Financial Institutions Examination Council (FFIEC) in June of 2000 for the purpose of helping “borrowers overcome temporary financial difficulties, such as loss of job, medical emergency, or change in family circumstances like loss of a family member”.

The Policy Background

The FFIEC is a formal interagency body empowered by the Board of Governors of the Federal Reserve System, The Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and others, to prescribe principles and standards in the supervision of financial institutions. The re-aging guidelines are observed by all credit card issuers with the understanding that they can take a more “conservative” stance at their discretion. Credit Unions did not opt to adopt this policy, but if you have a credit card with a credit union it does not hurt to ask if they have a re-aging policy.

Some Plain English

It sounds great so far! But how does it work? Re-aging is defined as “returning a delinquent, open-end account to current status without collecting the total amount of principle, interest, and fees that are contractually due”. And it means what it says. If you meet certain, very reasonable, guidelines your credit card issuer will wipe out your bad credit. What are those guidelines?

Nuts and Bolts

There are a few basic rules. The account has to have existed for at least 9 months, you have to offer to make three on-time payments or an equivalent lump sum payment before the re-aging will be finalized, you cannot re-age an account more than one time in any 12 month period and no more than 2 times in any 5 year period. Working on credit repair? Please note that there is no limit on the number of accounts that you can re-age. But I suggest you complete one effort first to get comfortable.

Your Part of the Deal

Just so you understand, this process is designed for cardholders that have a renewed willingness and ability to make payments in a timely manner. Like any credit repair effort there is no point if you fall behind again. It is also designed for cardholders that have experienced a financial hardship. Remember the list of hardships that constitute acceptable causes of past financial problems: loss of job, medical emergency, and change in family circumstances like loss of a family member. There may be other equally acceptable events. But since the re-aging process is taken seriously you should not expect that your request be honored if you say that you just didn’t want to pay your bills!

Getting Started

Are you ready to get started? Call the credit card issuer and ask them to explain their re-aging policy. Some issuers use the term, “curing”. If the person on the phone does not know what you are talking about you should ask for a supervisor. You will want to organize your thoughts in advance. Remember that you need to communicate the reasons for your past delinquency and your renewed willingness and ability to pay on time from now on.

The Deal

Re-aging deals can differ from one issuer to the next. You will want to make sure that all derogatory information will be deleted from your account. It is also a good idea to get the details in writing. Anyone who has made a credit repair effort knows that verbal agreements with creditors have a pretty poor record of success. If they won’t put it in writing, at least take careful notes including the name and direct phone number of the person that you are speaking with.

A Caution

Removing derogatory information from your credit is a great thing. It is the goal of every credit repair effort. But it is important to keep your FICO score in mind as well. If the issuer resets the opening date on your account when they remove your derogatory information you may lose points, depending on the number and age of other accounts on your report. Ask the issuers specifically if they will reset the open date. Some do and some don’t. If they will, you’ll want to consider the impact on your scores. FICO loves old accounts. If you have plenty of accounts with many years of history there is no problem. But if your credit is young and limited resetting an older account could be a set back, at least temporarily.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.

By: Jim Kemish

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If you are like millions of other Americans, you are probably sick and tired of the bills that keep piling up in your mailbox every month. Do not despair because you’re not the only person with this particular financial problem.

Let’s say you are already several payments behind and have no idea of how to pay for everything you owe. It’s probably high time to consider consulting with financial experts.

There are plenty of money experts in the country that can teach you all about consolidation loan, debt reduction, and other procedures that can help you get on the path to financial freedom. However, you do have to be careful in selecting a reliable company because there are several unscrupulous people out there who like taking advantage of people’s financial problems in order to make money for themselves.

A legitimate company that offers you a consolidation loan, debt reduction service, or financial assistance in any form will not charge you for an initial consultation. They will first assess your financial status and will state up front whether they can actually help you or not. You must stay away from so-called non-profit lending institutions that ask for donations or contributions outside of your loan payments.

Before you consider taking out a consolidation loan, debt reduction loan, or any other service that would help take you out of your financial rut, you need to understand all the possible consequences in case you are not able to complete the payments in time.

When you apply for a consolidation loan, debt reduction companies will require that you put up your home or other owned property as collateral that would sufficiently cover the amount of debt that you owe. If you fail to repay your consolidation loan, debt reduction institutions would immediately take over the ownership of your properties.

The primary benefit that you can get from consolidation loans is that you will be able to pay your debts at a much lower interest rate. We all know that many credit cards and student loans come with sky-high interest rates and this is one of the main reasons why millions of people end up bankrupt.

When you get a consolidation loan, debt reduction companies will still require you to pay an interest, but at a considerably lower rate.

An added advantage of taking out a consolidation loan is that you no longer need to write checks to several different companies. You just have to send the payment to the lending institution once or twice a month.

Once you have been granted a consolidation loan, debt reduction is certain – but it is still not the end of your problems. You will have to learn how to spend wisely and manage your finances much more efficiently in order to attain complete financial freedom.

By: David Faulkner

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One of the most common problems in almost every American household today is credit card debt. Paying with plastic is convenient, but if used unwisely; it can be a burden. Unless you have real money to burn, credit card bills can easily stack at the end of the month. Interest rates are a different thing, especially when you find yourself spending beyond your means.

Credit cards are most common cause of debt. People are being controlled by their money instead of the other way around. Others end up living off of credit cards and struggle with the bills.

Making ends meet is a tough job. More and more people everyday rely on credit cards to get by. Others find themselves in too deep and find the nearest quick fix. Instead of solving their problems they get more in return which started in a single phone call.

There are ways to reduce debt. Although debt reduction cannot be done overnight, it can be done to chip away your big problem. There are practical guides that can help you to reduce debt. Although some of them are common sense, we tend to forget using it.

Things that you need to know to get started on debt reduction

Stop being lazy

First and foremost, the most efficient tool is you. You are the only one who can manage your money. Anybody can give you an advice, but unless you pay attention it’s useless. There is no easy way in reducing your debt to more manageable amounts. You need hard work and restraint.

Quick fixes don’t exist

No matter how appealing a commercial maybe, there is no guaranteed way for a quick fix to put you out of debt. Companies who promise you that they can lower your interest rates can easily be con artists. Approach a credit counselor instead.

Outline your expenses

Besides fixed monthly bills, we don’t exactly know how much we spend. Spending money on a whim for a simple item can affect your budget. I’m not saying you should restrict yourself. The thing is you should be aware of what you spend. Make a list of every item you spend in a month. This will give an idea on the things you need to pay and variable items that you can do without.

Tally all the expenses. Compare the sum of your list with your monthly income. Jot down how much you have left after paying your monthly bills and taxes. Make a list of all your debt obligations including the interest for each.

Simple and effective management

Cut down on the variables items you spend. Set up your priorities and determine expenses that you can do without. Move the extra money to pay off your debts. When you find out the maximum amount you can pay every month, start chipping away your debt. You can do this by paying the debt with the highest interest rate. Then you can make minimum monthly payment on other bills.

Go from one debt with the highest rate to the next. This way you will able to cut down your total debt efficiently. If your credit card has a low rate that will shoot up after a specific period of time, pay that first.

Think of other alternatives

Consider or find ways to get more from your income. If you’re getting a hefty sum on your tax-refund that means a lot is withheld from your check. Make some modifications on your W-4 at work to change the withholding amount on your income.

You can also try to find ways to reduce your fixed bills. This includes your household bills and your mortgage. You can try refinancing to get a lower interest rate.

Move your credit balance with high interest rates to a card with a much lower interest rate. But you have to be vigilant about transfer offers. Some of them are only temporary.

Necessary evil

Last but not the least, make a budget. It can be constraining but it’s the only way to curb your spending. After you’ve known how much you are spending set goals and objectives. Leave 10% out of your income and don’t spend beyond your limits. Be firm on your budget, track and evaluate if you are following your guidelines.

By: Nathalie Fiset

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Debt reduction settlement and the debt negotiation, one way or another is the same thing and used to achieve the same task, a debt reduction settlement for a debtor from his or her creditor, to pay a reduced amount than the actual amount taken. Where it is a very viable exercise for the debtor at certain stage of his debt, it is very much relaxing and either tempting for the creditor who is hopeless to get his amount back and have become so desperate to file a bankruptcy.

Averagely the whole process takes twenty months with an average advantage of debt reduction settlement in 40%-60% and as you are confronting your creditor with a counselor, you have to pay the party 10%-15% of the deal amount so, accumulating all the odds, you end up with a 40%-45% savings anyhow.

Here it is important to keep in mind that these types of negotiations do not involve debts which are secured or backed by some certain security, pledged property, vehicle or insurance policy and only involved credit card installments and the debts which do not acquire any security, thus unsecured and creditor does not have anything to claim in and sell to get back his or her dues or even the full payment.

One of the major reasons why it is feasible for unsecured debt and why creditors are accepting and availing this option for their debtors rather than filing a bankruptcy is the element of loss. The loss of the original amount, as there is no security involved and they can not possibly sell anything to get their actual or to get a partial payment amount, forces them to agree on this settlement. so whenever they find their debtor is not paying the amount of the installment they without doubt go for a personal note, run agents behind you to locate if there is any problem so that they successfully get things done in their favor.

By: Jerry Cole

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Debt reduction is quickly becoming a top priority for many Americans. With today’s volatile economy, people are losing money in investments and losing their homes to foreclosure. Many people are beginning to realize that debt is their worst enemy and are looking for options to unlock the ball and chain holding them back from achieving their financial goals.

While debt reduction might seem like an overwhelming task, there are several ways to relieve the heavy burden. The first step of any debt reduction plan requires a thorough review of your finances. Once you obtain a good look at where you stand, it will be easier to determine which type of debt elimination plan best suits your needs.
 
Popular debt reduction programs include credit counseling, debt consolidation, debt settlement, debt management, budgeting and bankruptcy. Each requires dedication to comply with the principals of the chosen program. Most require an upfront fee along with monthly payments while subscribed to the service. Although hiring a financial consultant or debt management company to handle your finances might sound tempting, careful consideration should be given before embarking on this path.
 
Unless you are sinking in debts, there is no reason to spend additional money to reduce debt. Good old fashioned budgeting is one of the best ways to regain control of your finances. All that is required is to examine your financial situation and create a plan to get out of debt. Numerous free resources are available online to guide you through the process of creating a household budget. The library is another great resource for obtaining information on personal money management.
 
Credit counseling is a relatively inexpensive way to reduce debt. While most credit counselors charge a fee, non-profit organizations use a sliding scale to accommodate consumers who are struggling financially. The U.S. Trustee Program provides a comprehensive list of nationwide credit counseling agencies, along with a list of debt education providers.
 
The U.S. Trustee Program is managed by the Department of Justice. When debtors file for bankruptcy protection, they must undergo counseling through an approved agency. Debtors who are contemplating filing bankruptcy should consider using one of the U.S. Trustee approved agencies. If you do end up filing for bankruptcy protection, you will have met the credit counseling provisions outlined in the new bankruptcy laws.
 
There are many organizations offering debt reduction services. Unfortunately, many of these companies charge outlandish fees or participate in predatory lending practices. Should you decide to use debt reduction companies, it is imperative to conduct research to ensure they are reputable. A good place to verify credentials is through the Better Business Bureau at www.bbb.org.
 
Debt reduction can place you on the path to financial freedom. However, it is important to realize that it took time to create a mountain of debt and it will take time to overcome it. With patience and persistence, you can chip away at debt and break free of the financial chains that bind you.
 
Take time to educate yourself about the various debt reduction options. Determine which is best for you. Create a plan and put it into action. Then enjoy the rewards of your efforts as you watch your debts disappear!

By: Simon Volkov

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If you’ve ever applied for a home loan with less than stellar credit, you know how much extra you have to pay. Even though it can take some time, credit repair is definitely worth pursuing.

Credit Scores

When considering your application for a home loan, a financial institution looks at your credit and assigns it a score. In the industry, these scores are loosely referred to as a type of paper. The best scores equate to “A” paper, while lower scores are graded just like in school, to wit, “B”, “C”, “D” and “Oh, my god” paper. If you have “A” paper, you can expect to get the best deal, while lower grades are known as sub-prime borrowers.

Credit Repair

Credit repair is important because even small movements in your credit score can move you from one score to the next. If you move from B paper to A paper, you will save thousands of dollars in lower interest rates. A credit score of roughly 680 is considered to be A paper. If you have a score of 670, credit repair can bump you to 685 and save tens of thousands of dollars. In short, you want to make the effort to repair your credit whenever possible. Don’t just sit and suffer with sub-prime loans.

To repair credit, there are simple and not so simple steps that can be taken. Let’s take a look at some.

Credit Card Debt Ratios

Believe it or not, you can improve your credit scores by simply moving credit card balances around. A credit card with no balance actually doesn’t help you much if you have another card that is maxed out. If you shift the debt evenly among all credit cards, you credit score should increase. This has to do with something called your ratio of debt to available credit. It is a loophole of sorts, so take advantage of it.

Closing Accounts

Don’t! Many people will close credit card or other borrowing accounts when they are done with them. This is a huge mistake. First, it hurts you because you’ve reduced the available credit portion of your debt to available credit ratio. Second, you lose a record of your long-term credit payment history for the account. Lenders like to see these, so **** it up and keep the account open.

Inquiries

As strange as it sounds, inquiries on your credit report hurt you. Try to eliminate these by challenging them through the Fair Credit Reporting Act and limiting the credit applications you pursue. You can challenge inquiries by ordering copies of your credit reports and following the instructions on the report. Make sure to do this for all three credit reporting agencies – Equifax, Experian and Transunion.

Check Your Report

The big three credit agencies must report to Congress each year. Each year they report an astonishing number of problems with their systems. This can affect you since accounts will appear that are not yours. If these accounts have problems, your credit score goes down. Make sure you check your report before applying for a loan. You want to deal with these issues before you are in escrow.

Borrowing large sums of money for a home loan can be intimidating. Avoid acting like a dear in the headlights. Deal with your credit issues and save yourself thousands in payments.

By: Sergio Haros

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