Debt Management Info Blog

posted by on Jan 6

If you are trying to do the smart thing and take a look at your recent credit report, then you may be wandering what in the world you are looking at.  Understanding your credit score can be a confusing chore and may take a while for you to read.  There are a lot of numbers and confusing literature that can confuse you if you let it. 

Understanding the Score You Receive  

A credit score is a mathematical system that consists of numerous numbers that are used to estimate your credit risk.  The most commonly used form is the FICO score.  This score is used to evaluate your worthiness for credit.  You will receive a certain amount of points based on the information contained in your credit report.  The highest score that you can receive is an 850 and the lowest is a 300.  A score of 650 or higher means that your credit is good, however there is room for improvement. 

Do Your Know Your Score?

A good place for your credit score to be is around 700.  With that score you will be extended any credit with a good rate of interest, if you were looking for a debt consolidation loan for example.  If you can work hard to get our score up to that level and try to keep it there you will put yourself in a good financial situation because you will save a ton of money in interest charges on all credit extended to you.  It is important to understand what the numbers on your credit report are before you can work to improve and control them.

How to You Get Your Credit Information? 

Everyone can obtain a copy of their credit report by simply requesting it from one or all of the three major agencies reporting credit.  Because each agency has different information on you the scores they report will not be exactly the same.

Getting Help With Your Credit Score

If your score is lower than you want it to be, you can get some help with advice about how to improve the score and keep it in good standing.  You can look online for free advice or for books and tapes on credit.  These tapes can give you good ideas for ways to improve your credit score and how to maintain a good score.  There is also credit card counseling services that you can obtain in order to get good advice for fixing your credit score yourself. 

Review Your Report on a Regular Basis 

Reviewing your credit annually is very important in your efforts to keep your credit rating as high as possible.  If there are any errors on your report you will be able to catch them quickly and notify your creditor of needed changes.

posted by on Jan 3

For many people, filing bankruptcy is one of the toughest decisions they face. Considering the stigma often attached to a person who has gone through the process, many will struggle for years attempting to avoid the process. However, those who choose to go through the court for debt relief of find that after bankruptcy bad credit personal loan access has not been lost.

Leaders who issue bad credit personal loans often find individuals who have filed for bankruptcy are more dedicated in paying their loan payments. One reason for this may be that they do not have the option of filing for bankruptcy for several years.

Following bankruptcy bad credit personal loan rates are typically at the high end of the interest rate spectrum and they are also accompanied by initial charges that are considerably higher than a personal loan for someone with an unblemished credit rating. Personal loans with no collateral are dischargeable under even the new bankruptcy laws, cannot be defaulted upon as the lender granting a post-bankruptcy bad credit personal loan has the court on their side in obtaining repayment.

Following a bankruptcy discharge a person cannot file for protection for another seven years and the lender can then use the courts to receive an order of default. With this order in hand, the lender can use wage garnishment to recover the amount loaned. After bankruptcy bad credit personal loan granters have a better chance of recovering the money than those granted before bankruptcy.

Bankruptcy More Common Today

Although people who file bankruptcy still experience the stigma of a negative credit history for many years to come, the increase in the number of people filing for bankruptcy has opened up other options. With this increase in bankruptcy filings, comes an increase in leaders willing to issue out bad credit personal loans.

Even the changes in the new bankruptcy laws have not slowed down the number of bankruptcy filings. The added knowledge that those in debt can still obtain loans after filing bankruptcy makes the option of filing a little easier for some.

Bad credit personal loans may seem like an attractive option for those seeking some debt relief post-bankruptcy. However, these types of loans are usually at the top of the states allowable interest rate and often people who take out these loans find themselves back in the in same boat they were prior to their bankruptcy filing. They may be just as in debt or more so than they were before their bankruptcy discharge.

posted by on Dec 31

When it comes to wanting to learn how to start a credit repair service you have to be prepared that there is going to be a lot of information to learn. Not only are there the basics of credit repair there are going to be laws and guidelines that are different from state to state.

Once you realize how much knowledge you need to set up a credit repair service that will actually help people you might feel a bit overwhelmed.  It can be a daunting task, but not an impossible one.

Learning how to start a credit repair service may be easier if you have some experience with that kind of work. Typically, those who have worked in the industry, even under someone else’s company, will have a better understanding of how to start a credit repair service.

If you do not have any experience in the area it might be a good idea to try to get a job that will give you the experience you need.  That way you will be getting the education you need to start your own company while getting paid.

Where to Learn More

When you start your business you want it to benefit you and your customers.  That means you have to really know what you are doing.  There are tons of books that have been published that explain how to go about credit repair or that explain the laws and regulations that govern this type of work.  You should try to read everything you can get your hands own so that you will be sure you really know what you are doing.  This is going to be quite an undertaking.  But it will equal business success in the end.

Credit repair service is very specific and you need special knowledge of the trade.  You also need a good business sense which means a few business classes would be very helpful.  There are some factors of starting a business that are the same no matter what type of business you are in.  You need to know those basics.

In order to make sure that your business becomes a success you must make sure that you do everything possible to have everything in line and ready to go. In the end, all of your studying and hard work will pay off and you will see your business grow.

posted by on Dec 31

Having poor credit can certainly impede you the next time you want to purchase something that you have set your heart upon, though lack of proper credit standing will mean having to forego such things in life. Yes, bad credit can not only mean that you dont get what you want, but you may even spend sleepless nights worrying about how to fix the problem, though there are many people that will proffer you advice as to how to go about bad credit repair; even so, the best advice would certainly be to do it yourself.

Several Steps to Take to Repair Your Bad Credit

There are several steps to take in fixing bad credit- the first of which is to take the simple step of requesting a copy of your credit report from the credit bureau. Once you have this, take a few moments to review it, and make note of any potential errors or questionable entries.

The next step in a do it yourself fixing bad credit process is to visit the website of the Federal Trade Commission and know about what consumer rights protect you and how you can use them to your advantage.

Once you are aware of your rights, you will find that you can get false and incomplete transactions removed from your credit report. This is a huge step in repairing your credit. Removing such transactions must be done by credit agencies, which they must do to keep from paying penalties.

Once this step is complete, you should write a letter to the credit reporting agencies, disputing what you’ve found to be wrong with your report. After taking this step, be sure to continuously monitor the progress of your complaint with the agency.

Sometimes, it may take a month before the errors are verified by the creditors, and if you are right, then the errors will need to be rectified, and once the credit agency acknowledges that you own disputed claims, you can be sure that the simple steps you have taken for bad credit repair will have resulted in the error being removed from your credit report and your credit standing will then have improved.

With persistence and hard work, repairing your own less-than-perfect credit report is doable. Following proper and sound advice on how to do so, can lead to your credit scores improving within a short time, and the only cost to you is the time and effort it took to contact the credit reporting agencies.

posted by on Dec 29

There are many different ways for an individual to get out of serious debt.  Options include using personal loans, home equity loans, high-limit, low- interest credit cards, and debt consolidation services.  Taking advantage of government grants is another very interesting method with which debt can be diminished.

Advertising on the Internet, television, and radio all claim that debt consolidation is one of many things that money from a government grant can help you pay for.  This however, is not always true.  Even when it is, debtors will not have an easy time putting government grants to use for debt consolidation.

What kind of grants are they talking about?

Government grants are usually released to individuals who are trying to buy there first home or open a small business.  There is not any grant program that was designed with intention to help people pay off the debt that they owe.

A small business grant is the only type of government grant that is in any way related to debt alleviation.  It is conceivable that a person may open a small business in an attempt to earn extra income to be used in the payment of debt.  The government does not give out a large number of these grants, however, and being considered for one requires that the small business being opened fit the government’s criteria.

Where Can Additional Grants Be Found?

Apart from the government, individuals can receive grant money from private corporations.  Such corporations have specific requirements that whoever wants to receive their money must be able to meet.  Attempting to eliminate personal debt tends to be unrelated to the needs of a large business corporation and therefore not a valid reason to receive a grant on their part.

Charitable donations, however, are rather commonly made by large corporations.  Acts of charity are done by businesses in an attempt to improve the public’s opinion of them or to support the local community.  Giving of this nature is not a reliable and therefore should not be considered as a way for debt relief.

Where Can You Find Help for Debt?

There are several sources of help available for individuals in debt.  Though finding someone to pay off your debt for you would be very unusual, you may be able to reduce your minimum monthly payment and interest rates on credit cards by speaking with the credit card companies personally or by using a credit counseling agency.

Available for free on the Internet is information on how to create a personal budget that will allow you to have extra money each month that you can use to pay off debt.  You can take control of debt yourself, even without the government’s assistance.

posted by on Dec 26

Some people find themselves with way too much debt on their credit cards and not enough income to bring the balances down.  What can be done?  Here are some suggestions.

* Start bringing in more money.  You might need to get a second job, or search for a better paying one.  There are also some ways you can make extra money from home, such as babysitting or doing direct sales.  If it comes to this, putting as much of the additional funds as possible toward paying down your debt will help you get it down to a manageable level quickly.

*When you show a willingness to pay many creditors are ready to work with you.  Call your credit card companies and see if they will negotiate a lower monthly payment or bring down your interest a bit.  You could even try to negotiate a reduction in your overall balance, however you may find this difficult to accomplish without legal representation.

* Consolidate your debt.  Home equity loans, or second mortgages, are often used by people who are in an unmanageable amount of debt, or have too much debt, to consolidate the debt and reduce interest charges and monthly payments.  The trouble is that by doing this, you put your house on the line.

You may also pay more in interest than you realize, because even though the interest rate is lower, you will be paying for a longer time.  If you choose this route, paying more than the minimum payment each month will save you money.

If you do not want to put your home at risk you might try applying for a new credit card with a high limit and low rate.  Then you can transfer the balances of your cards to this one card and reduce your monthly expenditures.

Once you have consolidated your debt you have to be careful not to begin charging things again and run the credit card balances back up.  You will be in worse shape than you were in the beginning.

* File for Bankruptcy.  This should be your last resort.  Chapter 7 bankruptcy wipes all of your debts clean, but you may lose some of your property depending on your individual circumstances.  Chapter 13, which is now more common because of changes in the law, sets up a court-ordered payment plan to pay off your debt.  Either type will stay on your credit report for 7 years, and on public record permanently.

posted by on Dec 24

There is an appropriate and beneficial time to use a credit card.  Sometimes we have an emergency or need to make a purchase right away and simply do not have the cash available.  That is the time to use a credit card.  At times when we receive the statement we are still not quite ready or able to pay for the purchase.  This is even worse for people who find it very difficult to control their credit card spending.  For them, they truly dread receiving that statement at the end of the month.

Get Help

If you have a credit card that has a growing balance due to the high interest charges don’t feel that all is lost.  There is something you can do.  You can call the credit card company’s customer service department and try to negotiate a lower rate.  They will be able to inform you quickly if you qualify for such a reduction.  If you are able to reduce your interest you can begin to chip away at the balance because you will not be spending so much money each month on the compounding interest.

Utilize the Internet

Other help is available and can be found on line, such as non profit credit counseling.  There are thousands of financial experts out there who can help you with your credit card debt and they can easily be located on line.  Sometimes it can be arranged for you to have a live chat with credit counselors that can help you get back on track and better manage your finances.  There are also web sites that sell reading material with instructions on how to get out from under debt.

Counselors That Can Help

Non Profit Credit counseling is also available on the internet or face to face.  Credit counselors can evaluate your situation and explain to you where you have gotten off track.   Also some are willing to negotiate with your creditors in your behalf to reduce your interest and give you a more manageable payment.  Seeking help from credit counselors will help you drastically improve your credit scores.

Credit Counseling for Free

You will find that most credit card counselors offer their services free of charge.  Simply pull all your debts together and prepare the information for them to review.  They will give you options and help you choose the plan that will help you in time to get back on your feet financially.

posted by on Dec 20

posted by on Dec 15

If you’re faced with a great amount of debt, you likely want to get rid of it as quickly as you can. The cost of interest can really add up. As well, if you already have a lot of debt, it becomes difficult or even impossible to take on more debt for anything you really need. The important thing to remember is not to panic when you are in this situation.

It is in your best interest to try to get out of debt on your own if possible. Many people make the error of assuming they can pay off their debt really quick. They go ahead and set goals that aren’t realistic, and when they can’t reach them they get discouraged or give up. Many end up filing bankruptcy, because they feel there is no other hope for them.

You need to be realistic with your plans. Sit down and make a very thorough budget, including all of your monthly expenses. You then need to determine what you can live without, and take that money you save and put towards paying off your bills. The following are some things you can look at cutting out of your spending:

* Eating out.  Whether you pick up fast food for lunch when you’re working, or go out to eat with friends at a fancy restaurant once a week, you can cut costs here.  Take your lunch to work, and have dinner with your friends once a month instead of once a week.  Or better yet, suggest a less expensive activity that you can do together.

Vices- many of our bad habits also use up our precious money. If you smoke, you should quit- it is better for your health and for your wallet. Try making special coffees at home, rather than getting coffees out every day. These daily cut-backs really add up.

Entertainment- be sure to look at where to spend money on entertainment and cut back. Try to rent movies in, instead of going out to movies all the time. It is important to not completely deprive yourself and be bored, but to cut back within reason.

Travel- if you can cut back on the amount you drive your car, you will notice great savings. Try carpooling or taking the bus- you’ll save on gas, car repair, etc.

Depending on how much debt you have and what you can pay toward it, it may take many months or even years to pay off your debt. Keeping making more than the minimum payments each month, and you will find yourself making progress. Importantly, make your payments on time each month to keep your credit in good standing. With a little patience and hard work, you will find yourself someday to be free of debt.

posted by on Dec 12

If you are looking for a wise decision concerning your credit, then you may want to take a look at your credit report.  Once you have obtained a copy of your credit report it is just as important to know how to read it.  There are lots of numbers and different accounts on one piece of paper and you will want to be able to understand what you are looking at and what it all means. 

Three Major Credit-Reporting Agencies

The three agencies that report on your credit and have the most impact on your credit are Equifax, Experian and TransUnion.  These are the three companies from which you want to request your credit report annually.  You can get a free copy each year and each of these agencies is easily accessible on line.

What is Reported? 

Creditors supply information to the credit reporting agencies.  Since each agency receives information from different creditors, and the creditors have various manners of providing information, the information that their reports contain will vary. 

The Main Parts of a Credit Report

The credit report contains your personal information, your credit background, credit requests and public records information.  Your personal information includes your current and past addresses and telephone numbers, your driver’s license number and of course your social security number.

Credit Background

Your background of credit will contain all information for accounts that presently have or have had in the past.  This will include the name of the company extending credit and your account number with that company.  There are always possibilities of errors so you want to review this section carefully.  If you find an error you can contact the agency and have them make necessary corrections.

What Are Public Records?

If you have a criminal record, have ever been arrested and have had any judgements filed against you, these will be reported in the public records section of your credit report.  You hope to have no information in this section.