With so many people defaulting on credit cards and other loans, credit scores have been dropping like a rock over the past 6 months. One thing to keep in mind however is that with all the added work these companies are undertaking reporting write offs and non payments, there could be some errors that are being reported as well that could adversely affect your credit score without you knowing it.
You can get a free copy of your credit report online these days due to a federal law that gives all Americans access once per year. You can use this information to increase your score higher than you previously would have thought possible. You must know what to look for, and here's a good place to start.
Once you have your report, you obviously will want to check for any errors that are blatantly standing out. If you do find any errors you can have them removed within 30 days. If you simply write in to the agency that's reporting the error they will be forced to investigate the claim and verify it's authenticity. If they find it to be inaccurate they will have it promptly removed therefore increasing your credit score by as much as 100 points!
There's a good chance that you are like me though and feel like your credit report couldn't possibly have any errors in it. I used to feel this way until I found an old cell phone account that had been incorrectly reported as written off which was dragging my score down to the low 600's. I had this removed and I'm sure you can guess what happened to my score. You guessed it, 700 plus!
Wednesday, May 20, 2009
Being Sued For Debt When the Bill is Old and Long Forgotten
Being sued for debt when the amount owed is old and long forgotten is no fun. Unfortunately, there is no statute of limitations on a bill. If you ignore your financial problems, they don't just go away. Years later, when you are in a more comfortable financial position, the creditors can come back and collect on you.
Some people think that if they don't pay the debt, it goes away after 7 years. While it is true that it goes off your credit report, the legal obligation to pay does not go away.
Other people think that if the credit card company reports the bill as a "charge off" and deletes it from their books that it relieves them of their responsibility to pay.
Neither of these situations is true and faulty assumptions can lead to you being sued for debt that you thought was gone and buried.
If a collector contacts you regarding an old debt, you need to get all of the information right away. You may have lost the records or forgotten how much you owed in the first place. But don't be surprised if the amount has ballooned as a result of years of compound interest.
Hire a debt negotiator right away to help you deal with this situation. If the collection agency pursues the situation in court and gets a Judgment against you, it could result in your wages being garnished or the loss of property including bank accounts, automobiles, and even your home.
If you are being sued for debt - even if it is old bills - don't let the situation lie dormant. It will come back to bite you.
Some people think that if they don't pay the debt, it goes away after 7 years. While it is true that it goes off your credit report, the legal obligation to pay does not go away.
Other people think that if the credit card company reports the bill as a "charge off" and deletes it from their books that it relieves them of their responsibility to pay.
Neither of these situations is true and faulty assumptions can lead to you being sued for debt that you thought was gone and buried.
If a collector contacts you regarding an old debt, you need to get all of the information right away. You may have lost the records or forgotten how much you owed in the first place. But don't be surprised if the amount has ballooned as a result of years of compound interest.
Hire a debt negotiator right away to help you deal with this situation. If the collection agency pursues the situation in court and gets a Judgment against you, it could result in your wages being garnished or the loss of property including bank accounts, automobiles, and even your home.
If you are being sued for debt - even if it is old bills - don't let the situation lie dormant. It will come back to bite you.
Impulse Buying and the Derogitory Affect on Your Credit Score
Typical scenario....."I just gotta score this car stereo setup with the trunk mounted thousand watt sub woofer'. "I know, I'll just stick the $1,500 on plastic and pay it next month with that commission I have coming". "I'm really stoked with this thing, man". "They'll be able to hear me all the way to St. Louis and that's only at half volume". "I mean, damn". "How cool is that"? "Hey, how long does it take you guys to install this stuff".
Actually, how uncool is that and, further, what's totally wrong with this picture. How about the proposed deal not closing and the commission not coming through that Mr. Eager was anticipating for one. Then, those oh so easy monthly payments that started out at 9.9% are no longer so easy ending up at 29% and with absolutely no advance notice. I don't want you to think I'm kidding for a single second. It's not crazy and can really happen until the proposed law that's presently being legislated adds the necessary safeguards and begins to regulate those types of rate and term changes.
Hang in, folks, as, unfortunately, were not quite done yet. Being that this particular revolving account has a $2,000 limit and our boy has used about $1,720 of it, including taxes and the long term warranty and such, he has now well exceeded the 35 to 40% maximum usage guideline thus causing his credit scoring take yet another hit.
Oh yeah, a bit more bad news. Ok, this one's it. I promise. Sales were not way good in the months that followed and it became a matter of either paying the minimum credit card payment of $65.00 or his cell phone bill. It's ok. Go ahead, take the guess and connect the dots on this one.
Just a small "what not to do" lesson predicated on the inner workings of our unfortunately complex credit scoring system, a system that means everything should you need to apply for any kind of loan. Not lots out there can have more of a dramatic effect on your credit scores than taking revolving charge balances to the limit or missing a payment and installment accounts like car loans and mortgages don't even come close.
Admittedly the example used is a bit over dramatic but what I really want to leave you with in addition to a little chuckle is to not reach for the plastic unless, beyond a shadow of a doubt, you have the ability to pay the statement in it's entirety at the end of the month when received. I really don't care if you have ants in your pants and want to dance. One mans car stereo is another's little "what happens in Vegas stays in Vegas" which could even be worse what with gambling losses and such (great topic for next time, right).
Actually, how uncool is that and, further, what's totally wrong with this picture. How about the proposed deal not closing and the commission not coming through that Mr. Eager was anticipating for one. Then, those oh so easy monthly payments that started out at 9.9% are no longer so easy ending up at 29% and with absolutely no advance notice. I don't want you to think I'm kidding for a single second. It's not crazy and can really happen until the proposed law that's presently being legislated adds the necessary safeguards and begins to regulate those types of rate and term changes.
Hang in, folks, as, unfortunately, were not quite done yet. Being that this particular revolving account has a $2,000 limit and our boy has used about $1,720 of it, including taxes and the long term warranty and such, he has now well exceeded the 35 to 40% maximum usage guideline thus causing his credit scoring take yet another hit.
Oh yeah, a bit more bad news. Ok, this one's it. I promise. Sales were not way good in the months that followed and it became a matter of either paying the minimum credit card payment of $65.00 or his cell phone bill. It's ok. Go ahead, take the guess and connect the dots on this one.
Just a small "what not to do" lesson predicated on the inner workings of our unfortunately complex credit scoring system, a system that means everything should you need to apply for any kind of loan. Not lots out there can have more of a dramatic effect on your credit scores than taking revolving charge balances to the limit or missing a payment and installment accounts like car loans and mortgages don't even come close.
Admittedly the example used is a bit over dramatic but what I really want to leave you with in addition to a little chuckle is to not reach for the plastic unless, beyond a shadow of a doubt, you have the ability to pay the statement in it's entirety at the end of the month when received. I really don't care if you have ants in your pants and want to dance. One mans car stereo is another's little "what happens in Vegas stays in Vegas" which could even be worse what with gambling losses and such (great topic for next time, right).
How to Raise Your Credit Score 100 Points in 45 Minutes - Climb the Credit Score Scale
Without hiring a credit counselor and without spending any money, you can increase your credit score 100 points entirely on your own. By following these steps, you can increase your rating in just a short period of time.
Why would you want to do this?
Besides using your score to get approved for a loan, this rating is an important piece of information for many other purposes. For example, credit card companies are sending out notices to consumers that their spending limit is being reduced from $10,000 to a measly $500 because of decisions they have to make with the credit crunch.
Who else is checking your score?
Your boss or potential employer regularly runs background checks, which includes your credit rating. Why would they want to see this? It is an indicator of how responsible you are, how often you move, and if you have any major personal issues in your life that may keep you from being focused on your job.
Your credit score is actually used to hire, fire and decisions for promotions.
So how can you raise your rating in a matter of minutes?
The easiest and fastest way to do this is to find all of the negative information on all 3 of your files. Chances are you'll find a few of these items that are not accurate. For instance, there may be an items that is older than 7 years old, which by law should no longer be on your report and affecting your score.
You can also find delinquencies for accounts you never even owned, late payments for credit cards that were closed years ago. Once you find these mistakes, notify the reporting agency and demand that the items be removed. By law, they must remove the mistakes and as a result your score could increase 100 points or more for less than 45 minutes of work.
Why would you want to do this?
Besides using your score to get approved for a loan, this rating is an important piece of information for many other purposes. For example, credit card companies are sending out notices to consumers that their spending limit is being reduced from $10,000 to a measly $500 because of decisions they have to make with the credit crunch.
Who else is checking your score?
Your boss or potential employer regularly runs background checks, which includes your credit rating. Why would they want to see this? It is an indicator of how responsible you are, how often you move, and if you have any major personal issues in your life that may keep you from being focused on your job.
Your credit score is actually used to hire, fire and decisions for promotions.
So how can you raise your rating in a matter of minutes?
The easiest and fastest way to do this is to find all of the negative information on all 3 of your files. Chances are you'll find a few of these items that are not accurate. For instance, there may be an items that is older than 7 years old, which by law should no longer be on your report and affecting your score.
You can also find delinquencies for accounts you never even owned, late payments for credit cards that were closed years ago. Once you find these mistakes, notify the reporting agency and demand that the items be removed. By law, they must remove the mistakes and as a result your score could increase 100 points or more for less than 45 minutes of work.
Monday, May 18, 2009
Prepaid Credit Debit Cards - Accepted Everywhere!
One of the newest financial products are prepaid credit debit cards and they are proving to be extremely popular. Many of the major credit card issuers are now offering these kinds of schemes as a convenient and risk-free way for absolutely anybody to get their hands on a credit card.
When you sign up for prepaid credit cards you will generally find that there are very few fees. The principle behind these cards is that you load money onto them in advance, meaning that your card can be used just like a regular credit card until the money runs out (you will not go into debt). There are no bills to contend with after you have made the purchase, and there are no overdraft fees because there is absolutely no overdraft. In fact, prepaid debit credit cards are only named this way because they can be used in a similar manner not because they send you into debt!
Due to the convenience of prepaid credit debit cards they are a great choice for parents who want to give their teens a degree of freedom without financial risk. They are also a good choice for those who cannot get approved for a traditional card, travelers or simply those who do not wish to carry around large amounts of cash.
When you are looking for debit credit cards you should be approved instantly meaning that signing up is quick and easy. These are the most secure credit cards available today, so take some time to find the one that best suits your needs.
When you sign up for prepaid credit cards you will generally find that there are very few fees. The principle behind these cards is that you load money onto them in advance, meaning that your card can be used just like a regular credit card until the money runs out (you will not go into debt). There are no bills to contend with after you have made the purchase, and there are no overdraft fees because there is absolutely no overdraft. In fact, prepaid debit credit cards are only named this way because they can be used in a similar manner not because they send you into debt!
Due to the convenience of prepaid credit debit cards they are a great choice for parents who want to give their teens a degree of freedom without financial risk. They are also a good choice for those who cannot get approved for a traditional card, travelers or simply those who do not wish to carry around large amounts of cash.
When you are looking for debit credit cards you should be approved instantly meaning that signing up is quick and easy. These are the most secure credit cards available today, so take some time to find the one that best suits your needs.
Credit Card With No Annual Fee
Many of us are looking for new ways to save money, and a credit card with no annual fee could be the perfect solution. These credit cards are generally free from an annual fee to entice customers to sign up for a card. If you do choose to go with this type of credit card, then there are a few important points that you should always bear in mind.
Since the card issuers need to make money somehow, this means that any credit card without an annual fee will usually have higher interest rates than other cards that do charge the fee. Therefore if you fail to pay off the balance each month you could actually end up paying more than you expected, so think about how much you will be spending and how long you could take to pay it back.
If you are able to, paying off your balances in full will always help you keep the fees down and could definitely mean that this type of credit card could help you save money. Failing this, keeping your total balance low at all times means you will never be hit with high interest charges.
If you carefully consider your spending habits then you might find a credit card with no annual fee could offer you more benefits than drawbacks. However, if you do not normally pay off your bills on time then it may be a better option to find a card which carries a fee but which offers significantly lower interest rates. Carefully consider your financial situation before committing to a decision.
Since the card issuers need to make money somehow, this means that any credit card without an annual fee will usually have higher interest rates than other cards that do charge the fee. Therefore if you fail to pay off the balance each month you could actually end up paying more than you expected, so think about how much you will be spending and how long you could take to pay it back.
If you are able to, paying off your balances in full will always help you keep the fees down and could definitely mean that this type of credit card could help you save money. Failing this, keeping your total balance low at all times means you will never be hit with high interest charges.
If you carefully consider your spending habits then you might find a credit card with no annual fee could offer you more benefits than drawbacks. However, if you do not normally pay off your bills on time then it may be a better option to find a card which carries a fee but which offers significantly lower interest rates. Carefully consider your financial situation before committing to a decision.
Why You Should Restore Your Good Credit
"I don't need a credit now, why should I care about my credit score?" Many people tend to have this thinking, and they don't care if they are having bad rating until the day they really need to apply for a credit but find their options for good deals are limited. At this moment, they start to realize the important of having good credit rating, but it might be too late as rebuilding it needs time & efforts. That's why you should always maintain it at good level and if you have damaged it, you should take actions to restore it, starts from today, not the day you need it.
The credit score is a number that measures your credit worthiness, it determines whether or not you will be able to get a new credit card, a mortgage to buy your dream house, or in many cases, whether you will be able to rent an apartment or sometimes it becomes a determination factor on whether you can get a job. So, the number has a lot of bearing in your life, you should take your own responsibility to make sure that your score is where it should be. At any time, once you realize you have bad score, you should take immediate action to restore it.
How good is a good credit score? The average American has a number around 680, which is considered averagely good. However, you should try to maintain it at 720 and above, a score that enables you to enjoy better options when you need for a credit. If you found your rating is below 620, your options to get loans are very limited; the situation gets worse if it is below 600. However, don't despair because of the bad rating; instead, you should try to restore it and there are plenty of ways to do it, what is needed is your action to get started to work toward restoring a good credit.
Lenders heavily factor your credit rating into their approval decision for a loan application. The higher score you have, the easier it is for you to get credit with the desirable terms that can save you a significant amount on interest. For example, the monthly payment for a 30-year $200,000 mortgage could vary based on your credit score. If you have a score below average, you may only get a home loan with an interest rate at 10%, so your monthly payment would be $1755; but if you have good rating, you may find a better deal with interest rate at 7.5%, making your monthly payment to be $1398. You may be offered with the best interest rate, as low as 5% by the lenders if they find you have excellent credit score, making your monthly payment to be $1074. Do see a high score can mean big savings? You can save thousands annually by qualifying for low interest rate mortgage and loans. That's why you should restore a good credit.
Summary
The credit score has a lot of bearing in your life. Hence, if you have made mistakes that damage your credit score, you should always take immediate action to restore it.
The credit score is a number that measures your credit worthiness, it determines whether or not you will be able to get a new credit card, a mortgage to buy your dream house, or in many cases, whether you will be able to rent an apartment or sometimes it becomes a determination factor on whether you can get a job. So, the number has a lot of bearing in your life, you should take your own responsibility to make sure that your score is where it should be. At any time, once you realize you have bad score, you should take immediate action to restore it.
How good is a good credit score? The average American has a number around 680, which is considered averagely good. However, you should try to maintain it at 720 and above, a score that enables you to enjoy better options when you need for a credit. If you found your rating is below 620, your options to get loans are very limited; the situation gets worse if it is below 600. However, don't despair because of the bad rating; instead, you should try to restore it and there are plenty of ways to do it, what is needed is your action to get started to work toward restoring a good credit.
Lenders heavily factor your credit rating into their approval decision for a loan application. The higher score you have, the easier it is for you to get credit with the desirable terms that can save you a significant amount on interest. For example, the monthly payment for a 30-year $200,000 mortgage could vary based on your credit score. If you have a score below average, you may only get a home loan with an interest rate at 10%, so your monthly payment would be $1755; but if you have good rating, you may find a better deal with interest rate at 7.5%, making your monthly payment to be $1398. You may be offered with the best interest rate, as low as 5% by the lenders if they find you have excellent credit score, making your monthly payment to be $1074. Do see a high score can mean big savings? You can save thousands annually by qualifying for low interest rate mortgage and loans. That's why you should restore a good credit.
Summary
The credit score has a lot of bearing in your life. Hence, if you have made mistakes that damage your credit score, you should always take immediate action to restore it.
Free Websites May Sound Great, But Are Not Always Free
With the economy being at historical lows, most consumers would be willing to take almost anything for free that they can find. Especially free advice on topics like credit repair and personal budgeting. Although there is plenty of free advice out there to get, it seems to be getting harder and harder to find with the increasing number of companies who claim to offer you free information, only to find out that they want you to pay or sign up to something else before they provide you with the free part that you were originally interested in.
If you were to type in the word "free" in front of any normal search in a search engine you would find that there are so many results listed that you would never have enough time to go through every website. And if you did manage to have enough time to browse through over a million webpages you would probably only end up finding one or two websites that were actually giving away free information without asking for something in return.
All of these misleading websites can really discourage someone from trying to find the right places to go to get the advice they seek. But there is still some help out there that is easy to find. The Federal Trade Commission has a website that is very informative and doesn't cost you anything to use it. It is a good place to start when looking for information pertaining to credit or finances. One of the most common categories of websites that will try to entice consumers into paying for their services is the free credit report websites. There seems to be countless numbers of these sites that claim to show you your reports for free. Only in order to view them they will ask you to sign up for their credit monitoring services or pay to see your FICO score.
For anyone looking to obtain a copy of their free credit reports you should visit the only website designed by the three major credit bureaus themselves, AnnualCreditReport.com.
If you were to type in the word "free" in front of any normal search in a search engine you would find that there are so many results listed that you would never have enough time to go through every website. And if you did manage to have enough time to browse through over a million webpages you would probably only end up finding one or two websites that were actually giving away free information without asking for something in return.
All of these misleading websites can really discourage someone from trying to find the right places to go to get the advice they seek. But there is still some help out there that is easy to find. The Federal Trade Commission has a website that is very informative and doesn't cost you anything to use it. It is a good place to start when looking for information pertaining to credit or finances. One of the most common categories of websites that will try to entice consumers into paying for their services is the free credit report websites. There seems to be countless numbers of these sites that claim to show you your reports for free. Only in order to view them they will ask you to sign up for their credit monitoring services or pay to see your FICO score.
For anyone looking to obtain a copy of their free credit reports you should visit the only website designed by the three major credit bureaus themselves, AnnualCreditReport.com.
How to Build Business Credit With a Secured Card
If you are a small business owner, and you find yourself wondering how other business owners have successfully established credit for their businesses, but you have not been able to. This article will answer that question and fill in the blanks concerning several misunderstood aspects of business credit.
To put it up front, the answer is simple; secured business credit cards allow small businesses with no credit history to establish credit. For some reason there are several common misconceptions surrounding this type of card, but to get passed this and learn to grow your business by using them you will need to get passed them.
Here are the two most common misconceptions regarding secured business credit cards; aren't they a rip off? No, but I will address this. Aren't these just for people with damaged credit? No, and I will answer this.
First, let me address the question, are they a rip off: No, and here is why. Although secured credit cards do require you to put up collateral in case you default, this does not mean they are a rip off. It simply means that you have not earned enough trust from your lender to gain capital without giving them some type of assurance that they will be repaid. Look at this as a starting point, once you have borrowed and repaid numerous times your financial institution will be more inclined to extend you a traditional line of credit.
The second misconception is that secured lines of credit are for people with terrible credit histories only. This type of card can help someone with bad credit to reestablished credit, but that is not all it can do. If you business has no credit history you can use this type of card to start one.
To put it up front, the answer is simple; secured business credit cards allow small businesses with no credit history to establish credit. For some reason there are several common misconceptions surrounding this type of card, but to get passed this and learn to grow your business by using them you will need to get passed them.
Here are the two most common misconceptions regarding secured business credit cards; aren't they a rip off? No, but I will address this. Aren't these just for people with damaged credit? No, and I will answer this.
First, let me address the question, are they a rip off: No, and here is why. Although secured credit cards do require you to put up collateral in case you default, this does not mean they are a rip off. It simply means that you have not earned enough trust from your lender to gain capital without giving them some type of assurance that they will be repaid. Look at this as a starting point, once you have borrowed and repaid numerous times your financial institution will be more inclined to extend you a traditional line of credit.
The second misconception is that secured lines of credit are for people with terrible credit histories only. This type of card can help someone with bad credit to reestablished credit, but that is not all it can do. If you business has no credit history you can use this type of card to start one.
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