CreditLawGroup.com

New Breed Of Debt Collectors & What You Can Do To Protect Yourself

2008-09-04T13:18:24.973-04:00

With our economy in the state it’s currently in many people are falling into debt and many bottom of the barrel debt collectors are coming out of the wood work harassing good people. In addition with the amount of errors reporting on peoples credit reports many consumers are being falsely accused of owing debts they really don’t owe. Some of the worst debt collectors will illegally threaten consumers with wage garnishment, arrest, lawsuits, and generally unprofessionally harassing innocent consumers. Some will call you many times at your home, job, call family members and neighbors to get a hold of you(This is intended to embarrass you to the extent that you pay the debt in order to make them go away) Many people pay debts they don’t really owe in fear of the collectors pursuing their (most often empty) threats. Generally the worst kind of debt collectors purchase old debts that are far beyond the statue of limitations for pennies on the dollar and aggressively pursue Americans to pay the debt so that they can make a profit. Usually these debt collectors don’t have any supporting documentation that you even owe the debt! They rely on their sleazy tactics to get you to pay debts you either don’t owe or are past the laws statute of limitations.

Know your rights! Get Familiar with The Fair Debt Collection Practices Act!

There are many laws currently in affect to protect consumers against debt collectors, but unfortunately many people aren’t aware of them. For instance if you send a “cease & desist” letter to a credit collector asking them not to call you anymore and direct any future correspondence through mail, they are required by law to stop otherwise the consumer is entitled to a $1000 from the collector each time thereafter they receive a phone call from the collector. It’s important to send letters through certified mail so you have proof the collection agency received your letter. The website budhibbs.com is an excellent resource for victims of debt collector harassment. Their site has many resources to help innocent consumers deal with debt collectors and even allows you to share your stories with other victims of collection agencies. In addition on this site you can view and add to a list of collection agencies that are guilty of illegally harassing people. It’s basically one of the few resources on the web that allows consumers to have their voices heard and expose these scams artists!
Some Things To Remember:

- Never trust anything a debt collector promises until you receive it in writing!
- Never give a debt collector your checking account # it’s dangerous and you risk having your bank account emptied.
- Always ask a debt collector for written verification of your debt, before agreeing to anything.

In conclusion I would like to stress that not all collection agencies and debt collectors are bad, most are professional and abide by the law, however the small group of bad agencies & collectors unfortunately are giving a bad name to the whole industry. It’s Important to check your credit reports frequently to determine if errors such as false accounts are appearing on your credit report. This is an important step to avoid dealing with this recent epidemic. Contact Credit Law Group to get help disputing any misleading, inaccurate, or unverifiable information on your credit report.

What Is A Reloadable Credit Card? What Are The Benefits?

2008-08-25T14:17:16.77-04:00

What is a reloadable credit card?

A reloadable credit card is a prepaid card consumers can use just like any other credit based card with a Visa® or MasterCard® logo. The great thing about them is there is no risk of getting yourself into financial trouble by getting into debt because you can only spend how much you loaded onto the card. These are popular with many teens and people who have trouble managing their spending. Some cards offer a credit builder option where the company reports your use to credit bureaus improving your credit score. They offer very little fees compared to some sub-prime credit cards (Usually around $10) and are a great alternative to carrying cash or even having a bank account. Many companies are now offering various services on their cards such as direct deposit of your paycheck, online bill pay, and allow you to reload your card at thousands of major retailers such as 711®’s and grocery stores.

With Lenders becoming more strict about approving consumers for credit cards many people are turning to reloadable credit cards to build their credit score. This is a great option for anyone who finds it difficult to responsibly use credit cards, yet want to have most of the benefits credit cards offer. You can use them anywhere traditional credit cards are accepted and provide consumers with a safer alternative to carrying cash or even a debit card. They are great for parents who can provide their children with money while their away at college or just for allowance. The best service to benefit people who have bad credit is various companies credit builder service, for a monthly fee (usually about $6) the company will report your monthly payment to the major credit bureaus which looks excellent on your credit report. It actually will look much better than most people realize because to creditors they see that you have a spotless payment history on a credit card even though in reality your only paying less than $10 a month.

As you can see Reloadable credit cards or prepaid cards are great alternatives to credit cards or secured credit cards with high annual fees and interest rates. They are great for people looking to build their credit or just have a card for the convenience of shopping online or other things. It’s important to remember that in today’s society you pretty much need a some type of card. To rent a car or book a hotel room most often than not a credit card is required. So for consumers that cannot get or simply don’t want a line of credit, reloadable cards are a great alternative.

When attempting to repair your credit combining the efforts of adding positive tradelines to your credit report and deleting negative tradelines is very effective in boosting your credit score. This will eventually save most consumers thousands of dollars in high interest fees over the years. If your serious about improving your credit score Contact Credit law Group at (800) 508-0041 our competent legal representation can help protect your rights and remove inaccurate, outdated, unverifiable, incorrect and other erroneous items from your credit report.

What Is A Charge Off?

2008-08-22T13:06:06.026-04:00

A charge off is when a consumer is very late on a payment (usually 120 days or more) that the credit company claims the debt as a loss. Usually these accounts come from credit card accounts, medical bills, utility bills, loans, or any type of account that is not paid on time. Many consumers believe that they no longer have to pay a debt once it is charged off, however this is not true. Even if the lenders receive their payments after the charge-off appears on your credit it can stay on your report and affect your credit.. Your account may be closed and the lender may opt to use their own collection agency or sell your debt to a third party company that will attempt to collect from you.

How does a charge off affect my credit and credit score?

A charge-off will stay on your credit report for seven years and does not look favorable for you by any means. To a typical lender, if you have one or more charge offs on your credit report there is a good chance they consider you to be an unacceptable risk and not approve you for any type of credit. They do not want to see this because it shows that you never paid the debt, and you may do the same thing with the money you borrow from them.

How can I avoid a charge off in the future?

This is why it is so important to check your credit report to gain knowledge about what is contained in the report. Stats show that 79% of Americans have negative information listed on their credit reports.. Even if you do have an accurately reported charge off on your credit report, if you pay it off or start to pay off the monthly balance you can sometimes work out a deal with the creditors so they will change the status on the report or list an explanation that will look better for you. The smartest thing to do is to pay your balance before it goes to a late payment.

How can I improve my credit and credit score after a charge off?

If you have one charge off, or multiple charge offs on your credit report, it is your legal right to dispute the information if it is being reported inaccurately. If the account goes into collections but you have paid the balance, then you should dispute this with the credit reporting bureaus. Credit Law Group is here to help; we make it simple and easy to dispute any misleading, inaccurate, or unverifiable information on your credit report. Our low cost services are easy to use, and you can log in online and view your process right from home.

Information On Credit Repair Scams & Solutions To Find The Best Company For You

2008-08-21T12:29:20.584-04:00

In a world where credit is everything and the information contained in your credit report is carefully analyzed, many people are seeking ways to repair their credit. In this current era credit repair companies are getting a lot of negative feedback and are being labeled as scams. It is defiantly true that some credit repair companies do seek to scam consumers but isn’t this true with any industry? No matter what the service is there will be people looking to take advantage of consumers to make a quick buck. It is important when making the decision to hire any service to do research on them. A very good website to do this is the better business bureau (www.bbb.org). Here consumers can see how long a business has been around for and various complaints made against them.

Some Key things that will help determine if a company is looking to scam you:

- Companies that guarantee to remove negative information from your credit report and increase your credit score- Nobody can gaurantee you they can remove accurate negative tradelines from your credit report.

- Companies that ask you to create an employee ID # for a new credit identity- This is called File Segregation and is illegal and the innocent consumer can be held responsiblie for committing a felony.

- Companies that charge you fees prior to providing any services- By law a credit repair company cannot charge consumers until they have performed the service

- Companies that do not advise you of your legal rights under the Fair Credit Reporting Act-A company should advise you that anyone can dispute tradelines on thier credit report themselves.

The strongest argument against credit repair companies is that they charge you for something you can do yourself. Yes this is true but once again this is true for many other types of services. For instance many people pay to have their lawn mowed or have their house cleaned. Can they do this themselves? Of course! We pay for the convenience and in most cases since these companies provide these services regularly and have built experience, they usually perform the service more effective and efficient than the average person could.

Having an established law firm represent you can achieve you results with better success rates than many other companies. The advantage of sending dispute letters to the credit bureaus with a law firms letterhead is the bureaus tend to take your request more seriously when they receive correspondence from an attorney, This will generally give consumers a faster response time. This is something consumers cannot do themselves unless of course they are in fact an attorney. This is basically why enlisting the services of a law firm proves to be much more beneficial to consumers than doing it themselves or hiring a credit repair company that’s not run by attorneys. There are many reputable credit repair companies out there with good intentions, however only a handful can actually get consumers the same results as a law firm.

If you are serious about improving your credit score and deleting incorrect or unverifiable items on your credit report contact Credit Law Group today for a free consultation! (800)-508-0041. We provide cost effective legal representation and can help protect your rights and remove inaccurate, outdated, unverifiable, incorrect and other erroneous items from your credit report. Here is link to our company’s Better Business Bureau record: https://www.bbb.org/online/consumer/cks.aspx?ID=1080131152330410

Reasons Why Lenders Are Becoming More strict About Lending

2008-08-14T13:11:45.636-04:00

Many Consumers starting to educate themselves on the in and outs of credit reports and scores. In these rather turbulent times for the economy lenders are tightened up there standards of lending money. You now need a higher credit score to be approved for credit and an excellent score to receive prime interest rates. This new trend has affected all aspects of the lending industry including: Mortgages, Loans (student, personal, business, etc.), credit cards, and housing.

Since more people have foreclosed on mortgages than ever before lenders are suffering great losses and to seek some type of relief are (for the most part) only lending to qualified buyers with a good credit rating. They no longer are as willing to take chances are borrowers who are in the “sub prime” category. Foreclosure will seriously damage your credit and sadly more and more homeowners are having their homes foreclosed. Another item on your credit report that can be extremely damaging is bankruptcy. Bankruptcy is one of the worst tradelines on a credit report and should be the last option for any consumer! In addition more consumers are defaulting on loans and credit cards, because after of all this the creditors are taking a noticeable financial hit. As a result they are no longer accepting credit applications as generous as in the past. This is why it’s so vital to obtain a copy of your credit report to see what negative tradelines are being listed and used against you. There is a good chance that incorrect information may be listed on your credit report that can significantly lower your credit score. This will increase your interest rates if your even approved at all! Once you have obtained your credit report the next plan of action would be to determine a strategy for paying down your debt and removing negative or unverifiable tradelines. Credit law group can help If you are serious about disputing inaccurate, unverifiable, or misleading information on your credit report, contact CreditLawGroup today at 1-800-508-7762.We provide low cost legal representation in disputing inaccuracies on your credit report as well as excellent customer service.

Information on Credit Cards & How They Affect Your Credit Score

2008-08-14T11:00:09.094-04:00

More and more consumers are beginning to realize just how important Creditworthiness is to almost every aspect of your life. It affects employment, Finances, and where you can live. In this current turbulent market more and more people falling victim to well designed credit traps by creditors. Some put into their lengthy and difficult to read contracts clauses where if your late on a payment your interest rate will skyrocket. It’s true that everything a creditor can do to you is written right there in the contract and consumers should carefully read over the terms and conditions, but the penalties seem too harsh and almost always end up occurring to a customer. Credit card companies make most of their profits from extra fees incurred by the consumer for late payments and such.

The best and most obvious way to combat these practices is to research the best type credit cards and to not be late on your payments. In addition do not pay the minimum fees this is what the credit cards want you to do. In reality most of your payment is going to interest fees and not paying down your debt.

The best way to responsibly use credit cards is to only use them for emergency purposes. Using a credit card for everyday purchases such as gas and food can get consumers in trouble. Even worse is using them to pay bills or purchasing high ticket items that you don’t really need. Just because a person has a credit card with a $10,000 limit doesn’t mean that you actually have $10,000 to spend. This is where many consumers start to get themselves into debt. Before they know it their card is maxed out, their credit score goes down, and they no longer have the emergency money they once had. Instead they have an additional monthly payment that most likely wasn’t necessary.

The way to responsibly use a credit card would be to never allow yourself to go past 30% of its limit. This is a good idea for two reasons: the first is having 70% of your available credit left looks great on your credit report(Boosting your credit score) and the second reason is that it becomes much easier to pay down the debt since the amount will be less.

In conclusion credit cards can be great if used responsibly. In many cases your credit score can actually suffer without having a revolving account on your report. Unfortunately it is becoming al to common nowadays for consumers to get themselves in to serious debt and trouble with credit cards. Keep your debt minimal, don’t use credit cards for everyday purchases and bills, and be responsible. Now that you know how delinquent credit card accounts can affect your credit score its important to monitor your credit report to see if anything is being reported inaccurately. If you feel that you need the assistance of a professional organization with experience in credit repair contact Credit law group for a free consultation with a credit analyst to determine what is the best for you.

Facts About Credit Cards

2008-08-07T13:17:51.525-04:00

- Unsigned cards are not valid and Merchants Can and will refuse them

As soon as your card comes in the mail you should sign the back with your name. Writing see I.D. will not work. Merchants have the right to refuse to allow you to make the purchase with your card if your signature is not on it.

- The maximum liability for unauthorized use of a credit card is $50 according to federal law

- Merchants cannot require you to present ID, unless your card is unsigned

By contract merchants cannot ask you for ID and you don’t have to present it to them.

- Merchants cannot require a minimum transaction amount

Those signs consumers are seeing more and more often setting a minimum purchase for credit cards is not allowed by the credit card issuer. Any business that does this can be reported to the credit card companies. Although it is not illegal by law it breaches the credit card contract between the merchant and the credit card company

- Merchants cannot charge a surcharge for using a credit card; however, they can offer a "cash discount"

Merchants are not allowed to charge you a higher price if you pay with a credit card. Ways they get around is by giving “discounts” to customers who pay in cash.

- Merchants are not allowed to make you give up your right to a chargeback

- Merchants are not allowed to place a hold for the estimated tip of bill.

- If merchants suspect you of fraud they are supposed to call with a "code 10"

If a merchant suspects a consumer is using someone else’s credit card they are supposed to delay the transaction and call the credit company with a code 10 to verify if the credit card is stolen and other information.

- If merchants break these rules you can report them to the credit card company

When merchants break rules according to their contracts consumers have the right to report them. This is why it is important to get familiar with the different rules so a merchant does not take advantage of you.

- 71% of young adults do not pay off the full balance every month1

- Low & middle income families have an average of $8,650 in credit card debt2.

1Consumers Union

2“The plastic safety net: The reality behind debt in America.”

How Is Your Credit Evaluated By Lenders?

2008-07-28T13:32:26.297-04:00

Credit Lenders are looking for reliable borrowers that will pay their bills on time and in full on a regular basis. They determine this by what is listed on your credit report, a record that is kept over a long period of time based on financial accounts in your name. Many people do not know their standards, but now I am going to tell you exactly what they are looking for.

The standards for obtaining credit can differ from lender to lender. Some are based on income, and some are based solely on credit record alone. Certain lenders require a perfect credit record and a high credit score, but some are more lenient and will allow a few late payments here and there on your record. The best way to be sure you will receive a loan or any other type of credit in the future is to always pay bills on time.

There are many different ways to be approved for credit whether it is by walk-in, committee, computer analysis, or credit scoring. This can also be determined by your income, which shows if you have the money to pay back the money you are borrowing.

The easiest way to be approved is by walk-in because you give them your information and sign a contract and receive the loan. It is based solely on trust that you will repay the loan, but it is old-fashioned and hardly used anymore. Next, a committee can approve your loan which is somewhat harder to be approved, because they review your credentials and decide whether or not they want to give you the loan or not. It is more professional and still easier to receive credit than some other ways used because they do not have all of your information.

The two newest ways used to approve loans are computer analysis and credit scoring. Computer analysis is when they input all of your information and use that complex program to evaluate if you are a good candidate or not. The next way, credit scoring is the absolute hardest way to receive credit, unless you have a perfect credit history. What they do is pull your complete credit history from credit reporting bureaus – companies who are paid to report everything about you. Some of the information may not even be completely accurate! This information is generated into a point value score that tells lenders what kind of borrower you are, and they can then choose to give you the loan or not. As you can see, it is a very complex process and the best way to receive credit is to regularly monitor your credit and make sure that it is always in a positive place. This will save you time and money on interest rates as well as many other debt problems in the future!

Free Credit Report Websites VS Annualcreditreport.com

2008-07-22T13:50:38.764-04:00

Free Credit Report Websites VS Annualcreditreport.com
Equifax®. Experian®. Transunion®.

In today’s world you are constantly bombarded with ads promising things, such as free this or free that, but you must remember that barely anything in life is free. Such things include free credit scores or free credit analysis. Do not fall for false advertising. There are many companies out there that will promise you free credit monitoring or free credit scores and you think “Great! Sign me up now!” However, this isn’t the case. For example, while watching a TV commercial, an ad for “free credit scores” came on. As I listened, they explained that they offered a completely free credit rating, whenever you requested as well as free credit monitoring.

The next morning, as I did my research, I went to the website and began the sign up process. As I got to the last step, they asked me for my credit card information. Strange, since they advertised everything was FREE. Located in the banner to the right of the sign up information they asked for a dollar which was completely “refunded” later (they didn’t say when) and was used as a “set up fee”. Next, I noticed the fine print, which read that the dollar WAS refunded, but after seven days you would be charged a monthly fee between $19.95 to $39.99, but you can cancel within seven days to not be charged.

The point of this article is that no matter what you sign up for, read the fine print and do your research. I decided to look up this company with the BBB (Better Business Bureau) and in their report they include a paragraph that explains that the ONLY company federally authorized to offer a free credit report was Annualcreditreport.com which gives you all three credit reports for FREE once a year. It’s federal law that you are permitted to receive a copy of your credit report once a year completely free of charge. However, freetriplescore.com is not the place to receive this offer.

Annualcreditreport.com was created by the three main credit reporting companies: Equifax, Experian and Transunion. It provides consumers to obtain a free credit report once every twelve months from each reporting company in accordance with the Fair and Accurate Credit Transactions Act (FACT Act). This service is not only very convenient, it’s fast… you can obtain each credit report securely on the internet, by telephone or by mail. Each of the companies has always encouraged customers to view their credit reports on a regular basis.

Information About Your Credit Score & Factors That Can Effect It.

2008-07-22T13:44:22.218-04:00

Your credit score is an indication of how likely you are to default on a loan. Lenders use this number to base their decisions on approval and interest rates. The higher your score, the lower the risk you are to a potential lender. In turn you are provided better rates. Lenders do not decide approval rates based solely on your score. There are many strategies different lenders use to evaluate you as a borrower. This comes down to the information on your credit report, and how they interpret this information negatively or positively.

Your credit score can also affect monthly payments for insurance, car loans, mortgage loans and ultimately the final price you pay on interest. Based on your credit score, lenders decide whether or not to approve you for loans and what interest rate you’re approved for. The difference between a few percentage points on an interest rate can mean thousands of additional dollars you must pay for different loans. For example, the difference between a 6% and 8% interest rate on a $25,000 car loan over 60 months can cost you an additional $1500 in interest alone!

Many people do not know this, but correcting their credit report is very important. Not only can it save them money, but it can also raise their credit score. Removing one inaccurate credit item on your credit report has the possibility of increasing your credit score by 100 points.

Trade lines remain on your credit report for many years. Accounts where you filled your obligation and paid as agreed stay on your credit report for 10 years. Accounts where you failed to pay as agreed can stay on your credit report for 7 years.

How your credit score is calculated:

Payment history = 35% of your score.

It is based on mainly 3 items:

1. The severity of your delinquency.

2. The amount of late payments.

3. How recent the delinquency is.

The amount you owe = 30%.

How large your debt is.

The ratio of the balance to your credit limits.

Length of credit history = 15%.

New credit = 10%.

Based on how much new debt you are acquiring.

Types of credit you have = 10%

Based on the different combinations of credit you have. (Credit cards, mortgage, department store, utilities, etc.)

Ways you can improve your credit score:

- Pay your bills on time.

- Pay down your debt instead of just moving it around.

- Don’t open new credit card accounts.

- If you have missed payments, pay the balance off and stay current with them. This will also eventually improve your credit score.

How Your Spouses Credit Score Can Affect You

2008-07-18T13:58:21.884-04:00

Although bad credit isn’t contagious married couples will sooner or later feel the affects of a spouses less then perfect credit score. The problem with this is that if one person has a good credit score and the other has a low score, all credit based financial decisions will lie on the person with higher credit score. Many couples are choosing to put all credit based applications on the person with the highest credit score simply because they will be approved with better interest rates. This has proved to be a strain on relationships after your spouse becomes tired off having all of the financial responsibilities in their name. In addition the loan amounts given can be lower if you solely apply for credit since they are only considering your income.

Some ways couples choose to deal with this issue is by jointly applying for credit. This often leads to higher interest rates the couple has to pay or not being approved at all. However at the same time this may help build the spouses credit score, given they pay their bills on time. The best resolution to this problem would be to repair your spouses credit. This is sure to be the most worthwhile solution to this common problem. Once your spouses credit score is corrected it would work out much better in jointly applying for credit. For example Mortgages would be more assessable because both your incomes would be considered for the loan and would allow the couple to receive a larger loan.

Many couples overlook the quality of their partners credit before getting married, but they soon they realize how much this will impact the couple in future purchases. Its important for couples to compare each others credit reports and repair them if necessary prior to committing to large purchases. This will ensure optimum Interest rates. Saving the couple a lot of money in the process.

Ways To Save Money In An Expensive Country.

2008-07-08T14:10:34.148-04:00

Rising gas prices and credit debt are two of the most popular news stories in America. Wouldn’t it be nice to save some money rather than constantly spend it? Well you can, but there are things in your life that may need some changing and adjusting in order to do so. The more money you save the more fun you can have right?

1.) Pay your credit card automatically on the due date. Look into enrolling into an online bill pay system. You will never pay interest this way, and save more money. If for some reason you are charged a fee, you must call the bank and have them remove it because some people will just pay the fee without asking questions – this is where they make a lot of their money.

2.) Only use your credit card when you are prepared to pay cash for something, otherwise it will end in debt if not paid. This costs you even more money because of the added damage that results from the lowered credit score.

3.) If there is a surcharge on your credit card purchase, just pay cash. The charges add up over time and can easily be avoided.

4.) Cash in on frequent flyer miles you earn from your credit cards. You earned them, they are free, and they save you money!

5.) If you can walk or bike somewhere, you should. Not only is it good for your health but gas is way too expensive.

6.) Bring lunch to work and eat leftovers whenever possible. Instead of buying a coffee from Dunkin Donuts or Starbucks, buy a personalized mug and bring your own to work everyday. Eating out is expensive and should be done sparingly to save money.

7.) Use an online movie rental service (such as Blockbuster or Netflix) rather than going to the movies. Not only does this save money on gas, ticket prices, and concession items, but you get more quality time with loved ones. At the movie theater it is public, whereas at home you can socialize and actually spend time together. It’s a win-win situation.

8.) Pay more than the minimum on your credit cards, auto loans, mortgages, or any other bill. This will avoid high interest rates that will devour your money and end up costing you up to twice as much as the original amount!

9.) Always use coupons and memberships to grocery stores, they may seem not to help but they can end up saving you hundreds of dollars per grocery bill, do not overlook them.

10.) Establish long-term and short term savings goals, and break them down into goals that can be achieved in order to stay motivated. Also, establish general long-term and short-term goals for your life, and always remember to follow them!

Choosing the Right Reloadable Credit Card

2008-07-01T10:50:48.563-04:00

Choosing The Right Reloadable Credit Card

For those of us in today’s society who are unable to get a valid bank account or credit card, for whatever reason it may be, do I have the solution

for you. The answer to your credit problems, well, at least the beginning answer, is a reloadable credit card.

There are many choices out there today. You will find cards that are hidden fee friendly and unless you read the fine print, the company who is

issuing the card will make out in the long run, kind of like some of those financial institutes that love to hit you with fees but we will not mention

any names to keep this clean.

Anyway, the best choice that I have found after doing my research is apply for any reloadable credit card that offers Credit Builder. What is credit

builder you ask? Well, just as simple as it is to say it, it is that easy to explain it. Credit Builder is a tool that not all reloadable credit

cards offer. This wonderful tool is used to help rebuild your credit while you are using their services. Thanks to a national credit reporting

agency called PRBC-Payment Reporting Builds Credit, when you start to make payments on a regular basis with your new reloadable credit card, the

company that you chosen and that offers the credit builder, will begin to report to the three main credit bureaus (Equifax, Experian and Trans Union).

This is a great tool for those who are trying to regain their credit independence.

So, before you run out there and start loading up any prepaid credit card you see, make sure you do your homework and get the card that will benefit

you and your credit positively. It will be worth it in the end.

FICO Scores & Your Intrest Rate

2008-06-23T14:24:30.22-04:00

Your credit score affects many different things that are a part of everyday life such as applying for a credit card, refinancing your house, applying for loans in college, and even your mortgage. Each of the 3 bureaus, Equifax, Experian, and Transunion have their own individual scoring methods. Most mortgage lenders determine your credit risk by using the FICO score. A FICO score is a third party credit scoring system used by lenders to predict the risk they would take by issuing a loan. FICO scores range from 300-850, making the median FICO score in the 700s, but if you want to get the best rates you want a score of at least 760. The highest FICO score possible is 850, but not many people have scores higher than 800. The higher your FICO score, the more money you can save each year. People who have a FICO score of 760 and above qualify for lower interest rate on their fixed-rate mortgages. However, people with lower FICO scores are paying a lot more in interest. Your score also affects the rate you pay for private mortgage insurance, the amount of documentation your lender requires when you apply for a loan, the amount of your down payment , the type of loan you receive and how big or small that loan is going to be. The lower your score, the less money you are able to borrow from the bank. Being late on bills or maxing out credit cards are just a few ways to mess up and lower your FICO score. Low credit scores are an indication of being high risk to the creditors and financial lending institutions.

Your FICO score is calculated based on your payment history, outstanding balances on credit cards, length of credit history, any new credit you have, types of credit you have used, and your credit report. When calculating your credit score each area of your credit is weighed and used differently, and that is vital to getting a high FICO score. Make sure to be on time when paying your bills and managing your existing credit because even a few late payments can negatively affect your score.

Foreclosure and Your Credit Score: A Deadly Pair

2008-06-20T15:02:21.403-04:00

Foreclosure and your credit score are two major topics in today’s news. Let’s just say it’s not good news. Not being able to pay the mortgage on your home is a serious issue and can affect the rest of your life. Many people think that their mortgage is worth more than their house, but it is bad advice and can ruin their credit for the rest of their life. The best way to handle your mortgage is to work with your bank and figure the situation out correctly.

Your credit score is one of the most important records that you could have and having a foreclosure listed on it can damage you by not allowing you purchase a home, car, furniture or any other types of credit card purchases. Your chances of being granted a loan will be greatly diminished, as your credit history will not indicate reliability on paying the loan back. So, in actuality, the importance of paying your mortgage is very important as it shows not only your reliability as a lender, but greatly increases your credit score.

Also, not paying your credit card, car, cell phone, loans, or any other bill will also lower your credit score. The best way to keep your credit score at an excellent level is to pay bills on time and always keep track of your credit score! If you have a bad credit score and there are negative or misleading things that you may want to have removed from your credit report, the best thing to do is to have cost effective legal representation. You can get more information at www.creditlawgroup.com, or call 1-800-508-0041 to speak with one of our paralegals today.

Ways to Maintain an Ideal Card Balance

2008-05-28T15:25:34.309-04:00

Ways to Maintain an Ideal Card Balance

In American today many people struggle with credit card debt and are paying it off for years. Here are some ways to avoid the headache of stress and debt by maintaining an ideal card balance.

1. Become an Educated Consumer

Important things to know when getting a credit card is knowing your credit limit, avoid maxing out your card, and understand how to maintain an ideal credit card balance.

2. Managing the Balance

Many people have a hard time maintaining a proper card balance. One of the best ways to prevent credit card debt from getting out of control is to establish a manageable budget before using the card. Also, make sure to track your spending, it will help when the credit card bill comes as well. Stick to the budget that you have established for yourself, therefore you will not go over the limit.

3. Manage Your Expenses

As soon as you use your card to buy a service or product the success of credit card management begins. When managing your expenses make sure your statements are accurate and always thoroughly review your monthly bill when it arrives. If there is anything that is wrong on the bill be sure to report it to your credit card company immediately.

4. Pay Your Dues

Never skip monthly payments. If you are able to afford the total minimum balance due, then you should pay that immediately upon receiving your statement. If possible, make another small payment on your card before the due date on the bill. Making small payments should not affect your cash flow too negatively. Try to avoid paying the monthly minimum payment all the time, if possible pay the full amount due more often.

5. Monitor Your Credit Limit

The “Available Credit” on your statement is the amount of credit you have left. This is computed by reducing your total credit limit by the outstanding balance still on the card. Do not exceed the credit limit on the card and never max out your card. Going beyond your credit limit and maxing out your card can and will have severe effects on your credit rating. Be sure to keep at least 20% of your account’s “Available Credit” as a cushion for emergencies. Ideally you should try not to utilize more then 35-40% of your available credit limit at any time.

6. Know Your Payment Obligations

Always pay attention to the payment due dates stipulated in your statements. It is best to settle your payments at least a week before they are actually due because you could be charged a since you could be charged a late fee payment. Know your obligations such as an address change and due dates. If your address changes and you don’t receive your statements it is still your responsibility to settle your debt.

7. Budget Your Monthly Bills

At least 10% of your monthly income should cover your credit card bills, lines of credit, and/or personal loans. You should never be paying more then what you are making; if you are you need to re-evaluate your monthly expenses. If you choose to do so, start a spreadsheet with all your purchases and expenses.

Credit cards can be a great convenience if you use them properly. Taking the steps necessary to maintain ideal credit card balances will make you life a whole lot easier and will make you have better credit.

Phishing

2008-05-28T15:24:48.013-04:00

BE AWARE!
Don’t be fooled when it comes to fraudulent emails and phone calls.
Many people aren’t aware of the credit scams that online users create to take peoples identity and use it to run up credit card debt as well as other harmful debts. However, it’s out there and it’s very real. Phishing is a type of scam that is created to take peoples identity online. Forms of identity taken include (but not limited to): Drivers license numbers, Social Security numbers as well as credit card numbers and bank account information.

A new form of phishing has begun. Recently, there has been a scam that sends out fraudulent emails and telephone calls that are apparently from the NCUA. The emails ask the client to confirm or approve their financial information in the system such as account numbers and credit card information. The email could also include a survey, that if the customer fills out, they will receive a check in the amount of eighty dollars.

All people need to know that the NCUA does not ask credit union members for personal information through email. Other companies that also do no ask for personal information through email include AOL; an internet supplier. The only place you should enter information is in a secure website which will have a stamp on the page that guarantees the website is secure.

If you feel that you are a victim of this scam or any other scams like it make sure you contact your credit card companies immediately and change you pin numbers or any other information that could have been stolen. NUCA is asking all of those affected by this email to forward it to: phishing@nuca.gov.

How to Control Your Debt

2008-05-28T15:23:50.248-04:00

There are many ways that you can control your debt and not find yourself in a credit situation that is unruly. The average household has at least $9,000 in credit card debt and the average interest rate is very high. Some debt is good to have while other debt is just the opposite. However, you can get a handle on your spending by just doing a few simple things.

The first thing that you can do is decide whether the debt is bad or good. You may want to borrow money for your house or a student loan. These are examples of good debt, and can help you as long as you pay what you owe. On the other hand, credit cards can be very dangerous when it comes to debt. Do not use credit cards for things on the go such as food or a vacation. Charging for these things will just add up into a large sum that is difficult to pay off, leaving you with a bad credit score. Put aside cash to pay for these things or make sure you have enough in your checking account to pay off the bill on time.

Control your spending! Keep track of all your purchases, avoid buying things you don’t need and save the leftover money for bills that accumulate in the future. You never know when something unexpected may come up which would also benefit that saved cash.

Always pay your highest debt first, as this is the one that will cause you the most trouble. Interest rates from high debts can end up costing more than the original balance. Also, pay in large chunks as to get rid of the balance as soon as possible. The minimum balance will just not suffice on large debts, but end up costing you much more in the end.

Be careful where you choose to acquire funds. That retirement fund is there for a reason – retiring. If you are constantly taking out of it, eventually you will be left with little to no retirement and you do not want that. Say you lose your home; it would be nice to have that retirement fund as a back up right?

Mortgages are not the most important thing on your credit agenda. They have low interest rates and are often deductible on taxes. So pay off your credit card first – that is the one that will damage you the most. However, do not avoid paying your mortgage as that could cause you to lose your home.

Emergency funds are always a good thing to have, so set up that fund for up to six months of living expenses. If there is a terrible accident, you lose your job, or something else unexpected comes up, you will be very glad to have this large sum of money to use.

If you find yourself in debt, get help whenever you need it and quickly. If debt is controlling you, get someone to help because it will be worth it in the end. There are credit repair companies waiting to help you with your credit problems. Interested? Visit www.creditlawgroup.com, a credit repair law firm, and receive legal representation at a low cost to you.

The Negative Side of Credit Counseling

2008-05-28T15:21:29.03-04:00

Credit counseling in 2008 is a huge business. With the percentages of people who are in credit “HELL” at this point in time, many businesses are trying to capitalize on America’s debt situation. If you are thinking of signing up for credit counseling, consider these facts before you sign on the dotted line.

We might as well call people who sign up for credit counseling “credit counseling drop outs” because 60% of people who sign up, drop out before the program is over. The reasoning behind these astonishing numbers are because the debt holders, when told by these credit counseling companies that they are going to lower their monthly payments and make payments for them, usually do not. Because people do not check on the company before they sign up, they learn that most of these companies turn out to be a scam.

Most of the time when you sign up with these so called credit counseling companies, they forget to tell people that not all creditors may participate in the process or they will raise the interest rate for signing up with a counseling company. Creditors want to get paid. A lot of the time, these credit counseling companies are not paying the creditor’s knowing that the percentage of you dropping out is high. They say they are paying, but are really keeping the money for themselves, eventually putting the debt holder in a worse position than when they signed up. Creditor’s know this, hence the reason why they are reacting negatively if you sign up with a counseling company.

So the lesson to learn from all of this is to do your research or handle your debt with your creditors yourself. It may end up costing you less in the long run.

Lenders Seek Help to Fund Student Loans

2008-05-22T14:38:23.712-04:00

Each year, millions of students seek financial help to fund their college education. Recently it’s becoming more and more difficult to get the help needed. Student loan companies have begun closing due to the lack of funding available. Sallie Mae, the leader of student loans is seeking help if they want to continue to offer loans to students.

Lawmakers cut billions in subsides to lenders to pay for the increase in student aid last year. The cut has made it expensive for lenders to get the capital they need to offer money to students. Because of this cut, it’s making student loans almost impossible to get and students are spending months trying to get the money they need to fund their education.

Congress passed a new law that is aimed to help ensure the loan program continues. Currently, this issue has become a critical problem that needs to be resolved quickly. Students are scrambling to get the money they need to start the fall semester that is only a few months away.

Many lenders have shut down and can no longer afford to continue to offer these loans to the students. They are asking the government to make the capital available at a rate that is lower and affordable. The cuts made last year were way too severe and is harming the lending company greatly.

Federal Government Tightens Leash on Credit Card Companies

2008-05-22T14:36:02.368-04:00

It is expressed that credit card debt averages about $850 billion dollars in the United States. This number has significantly increased since the 90’s. It is said that the average debt for over half of card-holding households that do not pay their balance in full every month is about $17,000. This is a ridiculously high number and has caused the government to step in and take control of the situation.

Lately, credit card companies have been deceptive and unlawful with their interest rates and payment requests. However, the Federal Government has decided to end these practices and make it easier on consumers by mandating rules for the companies. The plan behind these rules is to establish guidelines in which the company must follow in order to create fair and predictable outcomes for credit card users. Also, these rules will make it more difficult to raise interest rates and allow more time to pay back credit card and other debt.

Millions struggle with credit card debt and the government feels that these rules will allow people to gain more control with their financial situation. After receiving criticism for not stepping in sooner, the Federal Government decided that something must be done about the subprime mortgage crisis. These mandates on credit card companies allow more freedom and options with debt, as well as a solution to unfair practices.

Many think that this new mandate is a relief for credit card users; however some feel that it may not be enough. Also, the banking industry is against these rules because they predict higher interest rates as a result.

Some of the rules are as follows:

1.) No deceptive offerings of credit.

2.) No raising interest rates on a balance that is pre-existing.

3.) No assigning payments among balances that have different interest rates.

4.) A ban on quick repayment dates. Borrowers must be given enough time to repay the debt.

5.) No fees that exceed the credit limit because of holds on the account.

6.) No “double-cycle billing” which causes unfair computer balances.

7.) No added fees or security deposits for offering credit.

These rules are expected to be in place by January 1 of next year, and should cause a significant decrease in the amount of debt throughout America.

Controlling Debt

2008-05-22T11:48:51.532-04:00

If you find yourself in debt, get help whenever you need it and quickly. If debt is controlling you, get someone to help because it will be worth it in the end. There are credit repair companies waiting to help you with your credit problems. Interested? Visit www.creditlawgroup.com now and receive legal representation at a low cost to you.

Who Checks Your Credit Report?

2008-05-21T14:40:07.852-04:00

In order to have good credit, you need to build good credit. Depending on what your credit score is, your interest rates could either soar or be very low; therefore, having good credit affects how much you’ll be paying in your bills. Some people believe that the only people to check your credit score are lenders. However, they’re wrong; many other businesses check your credit score to determine your financial status.

THE HOUSING RENTAL COMPANIES –
In big cities where landlords can pick and choose their tenants, many run credit checks on their prospective tenants. Why? The answer: Because it’s not worth the risk of having someone financially irresponsible living on their property. Having no credit score is just as bad as having bad credit.

PROSPECTIVE EMPLOYERS
In a report from the Society of Human Resource Management, a study showed that over 95 percent of employers do a background check on their prospective employees. Included in this report is your credit history and could make the difference on whether or not you get hired in the company. A human resource manager named Johnny Taylor of IAC/Interactive Corp states that bad credit often eliminates an applicant from hiring consideration.

INSURERS
Like lenders, insurers do routine credit checks to check credit history. The person’s credit history is usually the base on their premium rates for that individual. From car insurance to health insurance, they believe that credit is the best predictor on if the person will file a claim in the future. Now, having a good credit score will make your rates lower than having a good driving record. About eighty percent of insurers use credit when determining to accept or deny someone’s application.

CELLPHONE AND UTILITY COMPANIES
Some cell phone providers also use credit reports to determine to accept your business or not. Even the most basic services such as gas and electric as well as cell phone companies look at the reports to see if you have defaulted on any payments and will deny you if you do. If they accept it even with your low credit score, they might charge you a very high deposit, require a cosigner, or just pay higher rates.

5 Steps to Improving Your Credit Rating

2008-05-20T11:33:00.565-04:00

FIVE STEPS TO IMPROVING YOUR CREDIT RATING

Missing payments for debt owed or delinquencies on your credit report can cost you a lot of time and money, but it is never too late to clean up your act and start improving your credit. Here are five helpful tips to get you on the right path.

Step #1 Order Your Credit Reports

Once a year you are able to order a free credit report from the three main credit bureaus. The three main are bureaus Equifax, Experian and TransUnion. Look at the information reported to each of the bureaus. Keep in mind that some of the information may be different due to the fact that some creditors only report to certain bureaus. There are a number of credit report websites that you can retrieve this information from. A popular credit report website is www.annualcreditreport .com. Try to review your credit report twice a year in order to keep on top of your credit. Also, if you denied credit, employment or insurance due to credit, you have 60 days to request a free credit report after receiving the denial notice.

Step #2 Examine Your Reports Carefully

It is sad to say, but keeping a clean credit report is your job. Credit bureaus do not verify the information they receive from creditors. Any negative information on your credit report can cost you a lot especially if you are trying to get a mortgage, a personal or a car loan, or a credit card. Once you receive your credit report, look over every detail. Even the misspelling of your name or a wrongly reported address can cost you points. Remember that late payments and charge-offs remain on your credit report for 7 years. Bankruptcies remain on your report for 10 years. Making consistent payments will improve your credit over time.

Step #3 Dispute and Document

After you have examined your credit report, it is time to start the dispute process. Any information that is inaccurate or incorrect and you want to dispute. Send a written dispute letter along with your supporting documents to the credit bureau with a copy of your credit report. The credit bureau must investigate the dispute within 30 days. If you do not receive a response from the creditor, the negative information will automatically be removed from your report.

Step #4 Dissolve Your Debt

Next step you can take on the path to improving your credit is to dissolve your debt. Begin by drawing up a spending plan that fits your financial status and allows you to make payments on time and consistently. If you are having trouble making payments on time or meeting the payment itself, call the creditor and negotiate new lower payment and/or due date. Keep in mind not to close your credit accounts after they are paid off. It will hurt your score more to close the accounts then to keep them open. Also, keep your balances low on revolving accounts. This will help with keeping your interest charges down.

Step #5 Add Stability To Your Credit File

Last, but not least, start rebuilding your credit file today. You may have been denied credit even though you have credit because some creditors like gas card companies or credit unions, may not report to the three bureaus. To prevent this, before signing up, ask if they report to any of the three bureaus. If they do not, think about choosing another creditor. The faster you begin to repair your credit, the faster your score will go up. Start now….

Students and their credit scores

2008-05-19T11:26:27.404-04:00

Students and their Credit Scores.

With the current rise in interest rates, it can be almost impossible to get a loan that is affordable. What most people don’t know (especially students) is that credit scores determine what your interest rate will be. The better your credit score, preferably over a 750, the lower your interest rate will be. The main point is that your credit score can either make or break you, the more you owe, the lower your credit score will be. The lower your credit score is, the harder it is to get a loan or a credit card.

Students are becoming more and more concerned about their credit scores, and they should be. Following graduation, many people are looking into purchasing a house or a car, but cannot get the loans needed to do so. This is because they either haven’t built good enough credit or are behind on payments from credit cards or student loans, causing their scores to plummet. Student debts are rising as well as the numbers of students leaving school with bad credit scores. Many researchers blame these statistics on rising tuition costs as well as credit card debt.

However, this isn’t always the case. If you begin to pay off your student loans while in college or quickly following graduation, you can build up a good credit score. In order to do so, students need to learn to pay their bills on time. A few ways to earn a good credit score is to put bills in your name that will boost your score and make sure you pay them on time. For example, a cell phone bill, a student credit card, or cable and internet bill. These will show creditors that you a are a responsible customer.

Florida: The Leading State in the Rise of Inflation Rates

2008-05-16T11:28:45.45-04:00

Florida: The Leading State in the Rise of Inflation Rates.

South Florida is currently leading the nation in highest inflation rate rise. Overall, the United States official inflation rate rose about two percent in April alone. Florida’s rising consumer prices puts major pressure on local consumers. The rise in consumer prices includes the cost of gas, food and other products which are soaring at the fastest pace in the nation.

The Bureau of Labor Statistics reports that the inflation rise is not keeping up with the wages the consumers make, which is causing the inflation rate to soar. Miami’s inflation rate topped all other Metropolitan areas with a 4.9 percent annual inflation rate through April. Miami beat the nation by a whole percent difference (The US having a 3.9 annual inflation rate) .

A major leading factor in the rise of inflation would be the rising gas prices. Many business people are avoiding places such as Miami due to the higher than normal prices on consumer goods. For example, Taxi drivers and private shuttle services are avoiding Miami due to the high gas costs. People are now staying closer to home and are using public transportation as well as walking to the places that they need to go.

Ten Credit Card Smart Tips

2008-05-16T11:23:39.077-04:00

Ten Credit Card Smart Tips

There are a few things you can do to change your old ways of using a credit card. The average family has around a $9,000 balance with all of their cards maxed out. Do not become one of the average, pay bills up front and on time to avoid having a large debt. Even though families have such a large balance, they still sign up for additional credit cards each year. This gives credit-card companies the bragging rights to say they sign up over 150 million new cards per year. So check your wallet and figure out which cards are necessary, and which are not. Some things that you can do to smarten up your credit card habits are listed below:

1.Demand benefits. Credit card companies are loyal to their customers. They will usually do anything in their power to keep you as one, especially if you pay your bills on time. Long term customers can receive even more benefits if they ask for them! So next time you are with a company for awhile, ask for that annual-fee waiver, late fee cancellation, extended introductory rate, or even a lower interest rate.

2.Read the small print. Believe it or not it is important, and will sneak up on you later. It is best to be prepared for fees you “did not know about” or interest rate increases. So sit down and read it in full, you will be much more informed.

3.Avoid cash withdrawals and check convenience. These two things will increase your interest rate dramatically as well as send out hidden fees.

4.Check over your bill and statements. Charges can be sent in twice, or maybe the amount is incorrect. Keep track of your receipts and purchases, and check the bill carefully when it comes. Dispute anything that seems odd by calling your company or the person that made the charge.

5.Seek a credit counselor. They can help you cut your debt, and even offer advice on how to improve your credit in the future.

6.Do not just accept cards! Of course credit card companies will send you offers with “great interest rates” and tell you they are better than your current credit card. However, it is up to you to decide if you really need that extra credit card, or were you just a victim to their advertising? Two credit cards per person is ideal, but you may want to keep one because of the great benefits which is fine – if you can pay off the debt. Do not just cut up the cards – call the company and make sure that you are cancelled or it could end up damaging your credit later.

7.Pay in larger amounts. Taking your time paying off the debt on a huge credit card balance could take years...40 or so. If your credit card balance is enormous, pay it off in large chunks or you will pay more than the balance in interest alone. Take that balance from high to low as soon as you can.

8.Pick the right card for you. Look at your spending and payment history and decide what kind of credit card would fit you best. Also, check out the benefits on different cards and choose which would help you the most. Very few credit card companies charge annual fees, so do not pay one unless the rewards are worth it.

9.Use the benefits to your advantage. Credit card companies have increased security measures and protection set up for their customers. They are obligated to help you if there is any question that a charge is not you. The Federal Government has set this obligation for consumer’s privacy and protection against identity theft.

10.Pay bills by their priority level. Decide which are the most urgent by placing a priority level. This will allow you to get a better handle on your credit, and keep that credit score low. Pay credit cards off that have the highest interest rate first rather than spreading your money out amongst all the bills. Pay the minimum for low interest cards, and spend most of your money on the one that has the major interest rate.

How your credit score affects your interest rate on a mortgage

2008-05-13T16:23:41.308-04:00

Your credit score affects many different things that are a part of everyday life such as applying for a credit card, refinancing your house, applying for loans in college, and even your mortgage. Each of the 3 bureaus, Equifax, Experian, and Transunion have their own individual scoring methods. Most mortgage lenders determine your credit risk by using the FICO score, a third party credit scoring system used by lenders to predict the risk they would take by issuing a loan. FICO scores range from 300-850, making the median FICO score 723, but if you want to get the best rates you want a score of at least 760. The highest FICO score possible is 850, but only 13% of people have scores that beat 800.

The higher your FICO score, the more money you can save each year. People who have a FICO score of 760 or better are qualifying for an average interest rate of 5.98% on a 30-year fixed-rate mortgage. However, people with lower FICO scores between 620 to 639 are paying an interest rate around 7.47%, which averages around $227 each month or $2,724 per year depending on your mortgage. Your score also affects the rate you pay for private mortgage insurance, the amount of documentation your lender requires when you apply for a loan, the amount of your down payment , the type of loan you receive, and of course, how big or small the loan is going to be. The lower your score, the less money you are able to borrow from the bank. Being late on bills or maxing out credit cards are just a few ways to mess up and lower your FICO score. Low credit scores are an indication of being high risk to the creditors and financial lending institutions.

Your FICO score is calculated based on your payment history, outstanding balances on credit cards, length of credit history, any new credit you have, types of credit you have used, and your credit report. When calculating your credit score each area of your credit is weighed and used differently, and that is vital to getting a high FICO score. Make sure to be on time when paying your bills and managing your existing credit because even a few late payments can negatively affect your score.

Five simple steps to improve your credit score

2008-05-13T16:06:13.672-04:00

Your credit score or FICO score affects your entire life and is one of the most important things to take care of. It determines how likely you are to pay back a loan. This number is generated through a series of records kept in your credit file over a lifetime. A person with a high credit score at 850 is much more likely to pay their loan back than someone with a low score such as 300. A person with a high score has been on time for every payment, and has kept a good track on their credit. A low score is determined when someone has not made payments on time for credit cards, loans, house payments, or any other payment in the past.

The reason this score is so important is that it determines what type of rates that will be available for you as a borrower. Someone with a higher score will have a much easier time receiving a car loan as someone with a low score who has shown that they cannot make payments on time in the past. If you have a credit score above 700, you will receive low interest rates, and depending on how high your score is the lowest. However, if your credit score falls below 600, then you will receive high interest rates, if they even give you a loan at all. This is because in the past you have shown that you are not good at making payments on time.

There are three main credit bureaus that are required by the Fair and Accurate Credit Transactions Act to give you a free credit report once a year. The website www.annualcreditreport.com allows you to enter your information and receive credit reports from all three of these bureaus. The three credit bureaus that you will be working with are Experian, Equifax, and Transunion. They are well known companies that track all of the information about your credit – good and bad. What will be listed is the type of credit, the length of history with each lender, if anything is owed, and how all of this damages or strengthens your credit score.

Now that you know more about credit scores, this is how to improve your credit score!

Step One: Use credit cards! But make sure you make payments on time. Having a credit card looks better than not having one to lenders, but only if you pay them off. Not having a credit card means that your ability to pay back loans is a mystery. This means they have no idea because it has not been recorded in your credit report.

Step Two: Keep balances low. Taking your credit card to its max will only make it harder to pay off, and in return make interest rates higher as well as considerably lower your credit score. Pay the bills as they go, and use your credit card only when you can pay back your debt.

Step Three: Pay your bills before they are due. This looks great to someone that wants to lend you money, right? They will never have to worry that you will not pay your loan if they see that every month your bills are paid on time in full. Your credit score can be raised significantly in only one month with this method.

Step Four: Do not sign up for more credit cards than you need. Not only is there the possibility of hidden charges and fees for not using the credit cards that were unnecessary, but they can also damage your credit score. Also, your account age will decrease, which hurts all of the hard work you put into building up credit cards you really need. Stick with what you can manage and what you can pay off.

Step Five: A closed account does not just disappear. Make sure that there are no payments left with the account before it is closed. Chopping up a credit card makes it no longer usable – but the debt is still there

Fixing Your Credit after a Foreclosure

2008-05-13T15:43:39.135-04:00

After the loss of a home to foreclosure, many people think that because they filed for bankruptcy, they can get out of debt quickly and easily. However, this isn’t the case. Improving your credit after such a strong financial loss can be quite difficult and could take many years. Losing your home is probably one of the worst things that can happen to you and yet, it happens to millions of Americans each year.

The key to preventing this issue or avoiding having it happen again is to understand why it happens to begin with. This is an extremely important factor in improving your credit. You need to sit down and look at your financial situation, set up a budget, avoid unnecessary spending and pay all bills on time. If necessary, invest in hiring someone to help manage your finances, it will pay off in the long run.

Another key step in avoiding foreclosure and bad credit is to manage money properly. Change the way you spend money by sticking to a strict budget. Like a diet, it’s easy to get sidetracked from following the budget you set up; stay strong and focused, you can do it.

Next, all past debts must be paid off. Set up a payment schedule and sit down with a financial officer, they’re designed to help lower interest rates and help you stick to the payment schedule. Debt consolidation companies are advertised all over TV, Radio and the internet but make sure to check them out and get rid of the fraudulent ads.

During each step, make sure you’re maintaining your spending habits because it is very easy to get sucked back into your old spending ways. There is lots of temptation through ads to spend money. Remember, these ads got you into the trouble the first time. A good idea to help limit spending is to cut up your credit cards and eliminate any debts that occur from them.

Finally, the final step into maintaining a good credit score following foreclosure or any other circumstance is to pay all debts on time and make sacrifices to pay your bills in a timely manner.

Although it will be difficult and frustrating, you can come back from this and rebuild your credit score, you just have to know how. This can’t happen overnight, it’s going to take time and hard work. You must be determined and dedicated in fixing your credit.