Author: Dave Peter

Consolidating Debt: When Does It Make Sense?

Debt consolidation will roll several debts in one payment. It is effective if the debt is never excessive. You also require maintaining a good credit score and planning well to keep your debt in check.

Debt Management, But Not Elimination

Moving each and every outstanding balances of the loans to a single lender will aid you in managing your debts but will never reduce your owed amount. You need to clear off your loan and make payment for the interest till the loan gets repaid. Set a goal of using the debt wisely.

Make Use Of the Below Mentioned Steps:

  • Pay Debt Of Your Credit Card

You may not have borrowed out the maximum that is allowed for the credit card, but paying off your balance is one of your priorities. Always pay more than the minimum amount on the card balance. Rates of interest that are charged on most of the credit cards are much higher than those that are found on other loans. Make your credit card payment once you get your statement. It will aid you in reducing the interest that you will be charged. Reduce the usage of your credit card for some time. Stop subjecting higher balances to the interest and use cash to identify various ways of spending less.

  • Assess Alternatives Based On Real-Estate

Review the rate of interest on the existing debts. The interest rates of credit cards as well as unsecured personal loans are higher than that of other secured debts such as mortgage, home equity loan or auto loan. If you calculate that the rate of interest on a home equity line of credit is less than that on credit cards, auto loans and other personal loans, then utilizing the option of borrowing through the line of credit will save some money.

When Consolidating Debt Is A Good Idea?

It is difficult to get hold of your debts, when credit card payments or payments on consumer and student loans continue to act as a burden on your living expenses. The monthly bills make some people opt for debt consolidation as the alternative option. A useful way of streamlining your debts will aid you in managing such a huge financial stress and lower costs. But it is not for everyone. You should consider few things before you opt for debt consolidation. There lie two main reasons for considering debt consolidation. One is to save money by availing a more favorable rate of interest and another is to encourage timely payments.

  • Consolidate Debts At Lower Interest

You may have some credit cards with rate of interest in double digits. If you made timely payments for the last years and maintained a good credit then you have a chance to qualify for a loan with a much lower rate of interest. So if you consolidate the debt of your credit card with a loan of cheaper rate of interest, your interest on the loan’s life will drastically get reduced. Moreover any loan will have a term set which will act as a brake on that amount of interest that you pay. Customers are seen to pay the minimum amount when paying credit card balances. It often covers up only the interest and hardly involves the principal. So if you continue doing this for many years, whatever you will pay in interest on a purchase will end up being much more than the initial principal. In case of loan, the debt needs to be cleared off by the loan term’s end.

  • Consolidate Debts At Fixed Rates

In case of a loan with a variable rate of interest, you should consider debt consolidation to bring down a fixed rate of interest. So a fixed rate will give you an idea of the costs of your interest. It is irrespective of the movement of the market’s rate of interest that controls the rise and fall of variable rates. Thus you will not be at a risk of getting affected with an increase in the rate of interest. So if keeping a record of some credit card bills made you forget either one or two payments, then consolidating debt will help. To have a good credit score you need to make timely payments. If consolidating several debt payments into one can aid you, then do that as it will be worth considering.

  • Consolidate Student Loans

Consolidating debts in case of student loans is a complicated decision. You should on the basis of how fast you wish to clear off the loans and how much of the debt is from the federal loans. Federal loans come with some consumer protection and it would be lost if you opt for debt consolidation. Student debt consolidation can be considered only once. So make sure you are selecting the most beneficial moment before you do it.

So consolidating debt should be a part of a bigger strategy to reduce debt. Decide wisely before you opt for debt consolidation.


5 Steps For Getting An Auto Loan

Getting your new vehicle financed can be relatively easier and fast only if you are prepared. When you are planning on financing a new or used car, following a few basic steps makes the whole process go really smooth.

  • Credit Researching

It is not a secret to anyone anymore that, a credit score plays a very important role when you are applying for a loan. Whether you will be eligible for a loan or not depends a lot on the credit score and the credit standing. Not only that, the credit scores help to decide at what rate your loan interest will be charged also, because the better your score the chances of securing a lower interest rate is possible. Among the 3 major credit reporting agencies, all of them allow you to check their respective credit score at practically zero cost once a year. You can check your own scores and review the information whether they are right and perfect and if not that should immediately be addressed and reported to correct. The scores should also be checked though they tend to be slightly different from the reported one at the credit union.

  • Having Knowledge About The Budget

Having a clear idea or knowledge about your budget and how much you can spend on the car expenses is very crucial. You must be absolutely sure that the amount that is to be spent on car payments fits the allocated budget streamlining with the other financial goals. Maybe you can think about spending $400 a month behind your car but that may prove as an injustice to your monthly savings goal. Now, if you don’t have any budget, you can start planning with the monthly income after taxes and then subtracting the usual monthly expenses to see how much goes into savings every month. There are some services where you don’t get any monthly bill because of yearly subscriptions such as Xbox Live or Amazon Prime, you have to follow basic mathematics and you have to divide the yearly charge by 12 and then adding that amount to your monthly budget. You may realize that maybe you are overspending here a bit, in that cases, without panicking you just have to find ways to cartel the budget. You will also need to plan way ahead if there is any chance of buying a new car because it comes with extra expenses like vehicle registration and car insurances apart from the usual maintenance costs like lubricant changes and petty repairs. By calculating all these you can easily figure out how much you need to save for the car payment.

  • Savings Is The Key

If you are not rushing into buying a car, it is always advisable to save up as much as possible before seeking out for a loan. Having a handsome fund at hand for down payment will imply that lesser money is required to finance the loan when required. Also as mentioned earlier, it’s always good to have funds in the so called vehicle fund to meet the regular car expenses like maintenance, insurance, etc.

  • Sanctioning A Preapproved Loan

Before even you think of buying a car, always try to get a preapproved car loan. Do a detailed research on various loans to find out which one gives you the best deal in terms of length of time and interest rate. Though local banks and credit unions does provide loans still don’t be shy to expand the research to online sites as well. In an ideal situation, after securing a preapproved loan, there shouldn’t be any problems of getting a final loan though getting preapproved loan doesn’t give you an automatic pass for a final loan and several other factors comes to play to decide whether you will eventually get it or not. In the worst cases if you don’t get a loan, they you can try paying more for the down payment and reducing the loan amount or ask someone to be a cosigner along with you.

  • Shopping For The Vehicle

With a pre-approved loan amount at your disposal, you will have to chalk down how much should be required for down payment, or for any trade-in values on some existing vehicle. In both the scenarios, the spending structure will affect your affordability while buying the car. While negotiating take precautions because dealers are already equipped with the knowledge that you have got financing and they will over you a loan tenure of longer term with lower EMIs which may seem tempting but in reality that will always cost you much more over the tenure of the loan. If you are planning on buying used vehicles with a pre-approved car loan, your spending can be limited to buying cars within a stipulated mileage or age limit.

By following these aforementioned steps you will be always ahead of others while getting a car loan.


5 Reasons Why You Should Get Preapproved For A Car Loan

While buying a car, cost and time matters. While searching for a new vehicle in the market with an auto loan, trying to get a pre – approved auto loan is both time and money saver. Following are a few reasons why you should take a pre – approval process.

  • Leveraging While Dealer Negotiations

The primary benefit of a pre – approved loan is the leverage because when you already have the guarantee of a pre-approved loan, it gives you a higher ground while bargaining with the dealer. The dealer gets the fact that as a buyer, you are a serious prospect and you have the required financial power to make the purchase as the lenders are already lined up behind you to provide the money. With already the resources secured to make the purchase, with your interest and persuasion, it is more likely for the dealer to cut you a deal, that might be by reducing the cost of the car or by adding some value added extras or by reducing some paperwork charges involved in the transaction. Without a pre – approved loan, it becomes very difficult for a person to make any kind of negotiations with the dealers because there remains no guarantee of a sure shot purchase of the car.

  • Lower Rate Of Interest

Secondly, with a pre-approved loan you can not only negotiate with the dealers but also have the upper hand against the lenders. As pre – approval of loans are only given to people with low risk factors, that creates a firm image in front of the lender and you can negotiate with the lender to lower the interest rate on the loan.

  • Acquiring More Buying Power

With the security of the financial muscles for buying the product in your hand, you can step in the showroom with all the confidence of a cash buyer. With a meticulous research done beforehand, you must be absolutely sure what you want and if you stick to that, you can purchase it at the instance. While choosing the finance partner through the seller always will tempt you to go for some additional features which may burn a hole in your pocket, so knowing exactly how much you will need and how much you will spend will always safeguard you from overspending.

  • Creating A More Realistic Budget

Customer dealing with the history of a bad credit also needs to opt for pre – approved loans because it shows them a clearer picture of their finances and of their budgets whether it will be feasible for them to opt for a car or not. Upon knowing the exact interest rates that one needs to pay for the auto loan, it is much easier to figure out the total cost of the loan as well with the help of a number of calculating tolls available online. Why it’s so important if you are having a poor credit history is because a bad credit means usually a higher interest rate which will trickle down to the fact that you have to adjust your budget in a tighter fund reserve. If $10,000 was affordable with a 9% APR, with a higher APR of 20%, you may be able to afford only $8000 because of the steep monthly payments. While having bad credit, a realistic budget creation is very crucial because the last thing you will want is to default on an existing loan ending in repossession of the vehicle. So, getting a pre – approved loan and creating a logical budget on the basis of the expected APR ensures that you will be paying the monthly payments at ease.

  • Time Saver

Test Driving and negotiation may take a long amount of time even if you have pre-planned the entire process and you know which car you want to purchase. Getting a pre – approval not only helps you to save a few hundred bucks but also it ensures that you save a lot of time. Unless you try to heckle with multiple dealers for a competitive interest rate, pre – approval gets your job done without you having to run to different offices worrying about pay stubs. All you need to do is to sign in the forms and walk away with your purchase.

So, while you’re at thinking about buying a new asset, prove your smartness and get your pre – approval loan sanctioned at the earliest and save money and save time!


The Reasons Why You Should Opt For The Aid Of An Expert Debt Advisor

The number of people who are incurring debts are steadily increasing. This cannot be avoided, especially since the negative repercussions of the recession are still being felt all over the world. But then, not a lot of people have an inkling as to how they can properly manage their finances in such a way that they will not be buried under their monthly dues. In general, debt advisors who are experts in their field will say that the improper management of finances as well as the lack of awareness of what being in debt can do to a person and his or her loved ones are among the major culprits why more and more people cannot get out of the debt trap they have slowly but surely subjected themselves in.

There are a number of people who are aware of the existence of debt relief options that can eventually help them get out of debt and help them stay debt-free at all times. However, they do not really take maximum advantage of these options simply because they do not really know all the details. They fail to solicit the help of debt advisors from reputed debt management agencies who can truly get them out of the rut they are in.

If you feel that there is no way out of your sorry predicament, think again. You are not in an entirely hopeless situation. All you need to do is to have the proper mindset. First and foremost, you should realize that you need professional help. Without the realization, then you will just go on and on and on in your sorry, debt-full predicament. You should always remember that in order for you to find a workable solution, it is important to acknowledge that you have a problem and that you need help.

Your next step after realizing that you need to seek the help of an expert in debt management will be to look for a good one. He or she will be able to help you map out payment strategies and follow them to a tee. You should, then, make sure that you seek the help of someone who is well-versed in all debt’s aspects. Be wary, though, at all times since you might be conned into getting the services of an impostor.

One way to ensure that you are getting help from a real debt advisor is not to fall for ads that promise things that are too good to be true. You should be wary when seeking out debt relief websites. You have to see to it that you go to a debt management company that is already well-known as specialists in debt management. Reading reviews will help you do so or better yet, go for word of mouth advertising. If you know people who have already tried the services of a debt management company that was really able to help them solve their debt problems, there is a good chance that you can become successful if you work with that same company. It is also important to trust your gut feel while looking for a debt advisor. If your intuition doesn’t coincide with what a prospect debt advisor is telling you, do not stop up to such time that you find the one that you feel is the perfect person or company to help you. Make sure to ask for their credentials and good references.

You should always remember that even if the debt advisor you solicit the services of is good, ultimately, the decision to finally get rid of your debts and enjoy financial freedom like you never had before is yours alone. Discipline yourself. Spending your money wisely and stashing up for a rainy day is always a good thing.

It is not always a great solution to go for consolidation loans for debt negotiations. Going for debt services is way, way better.


Understanding Credit Card Rewards The Proper Way

Reward credit cards are packaged in several types, each one offering rewards programs calibrated to suit particular spending patterns. But they all have the same basic premise: the more purchases you charge to the reward credit cards the greater the rewards.

Types Of Reward Credit Cards

Frequent flyer credit cards. Points earned from a frequent flyer credit card normally go to the frequent flyer program of the airline you prefer. The points you earn is largely determined by the monthly spend made using the card. Aside from free flights, the frequent flyer credit card rewards may include free hotel stays, travel insurance, etc.

Credit Cards With General / Catalogue Rewards.

The credit card usually has partners in the program who provide the products offered for redemption under the rewards program. These items could be anything (the possibilities are endless) from gift cards, home appliances, holidays, shopping vouchers, magazine subscriptions, etc.Credit cards with Cash-back. These cards offer a very simple program: your account is credited for a certain percentage of the amount spent on particular items. As an example the card may offer a rebate from participating gas stations.

Credit Cards With Instant Rewards

These programs are more straight forward. There are no points to accumulate; you will simply receive an instant reward from participating merchants. This could take the form of an immediate discount, a buy-1-take-1 offer, or buy X items and get the Next free, etc.

Getting Value From Reward Credit Cards


Your credit card should fit your spending behaviour. If you use charge often and prefer not to carry any balances, reward credit cards that allow you to accumulate points should work best for you.

If you cannot pay off the entire amount due each month, point-based reward credit cards will be irrelevant. Rewards programs are partly funded through higher interest rates on purchases; if you pay your bills in full by the due date then you may avoid all interest charges, otherwise it could be very costly. Any balances not paid by the due date will attract the high interest rate. The cost of the high interest charges is likely to far exceed the value of any rewards earnt.

Often rewards cards have an annual fee. Their value to you therefore depends on whether the worth of benefits you receive exceeds the cost of being in the rewards program.

One quick way to measure that is to estimate how much you have to spend to get $1 of reward. One card may award you 1 point per $1 spend, whilst another gives 1.5 points per $1. In this example to redeem a reward worth 6,000 points you thus need to spend $6,000 on the first card and only $4,000 on the other.

A further method is the point currency concept developed by Cannex. Point currency gives you the spending value of your rewards points. All you need to do is divide the number of points for the reward item of your choice by the recommended retail price. The lower points needed the higher its value because you consume fewer points to get the reward.

For example, one program may require 10,000 points to win an item worth $75 in retail, but another program may need 12,000 points. The point currency in the first program is 10,000 divided by $75 or 133.3 points per $1 for the first, and then 12,000 points divided by $75 or 160 points per $1 for the other.

As far as the rewards item is concerned, the first program gives you better point currency. Note though that if you incorporate the first method and the example described above, you may need to spend $10,000 to accumulate the required points in one program (at 1 point earned per $1 spent) but only $8,000 in the other (at 1.5 points earned per $1 spent).

Your spending pattern and the offers from credit cards can change over time – try to keep tabs on whether you are still benefitting from a credit card scheme.


Understanding Your Credit Report Like A Pro

Ordering your credit report is the first step to becoming an enlightened credit user and consumer. Unfortunately, when it finally arrives you may be disappointed to see that – as far as you are concerned – it looks like a lot of gibberish! It’s important to understand what you’re looking at if you’re going to be smart about your credit.

Conveniently, all three of the credit bureaus use similar formats when they compile your report. That means that if you can understand one, you’ll likely be able to understand the rest. Here are the major categories and what they really mean.

Identifying Information

There will be a bunch of personally identifiable information on your credit report. Don’t be surprised to see your full name, home mailing address, date of birth, recent employment information and Social Security number. All of those data points are used to accurately identify you.

Name changes (including potential aliases) may be detailed here. Women whose names have changed through marriage or divorce will certainly see more than one entry.

Trade Lines

All of your active credit accounts will be documented on your credit report. The basic information about each will be listed. You’ll see the type of account, the length of time that it has been open, your borrowing limit, the total amount of the loan, the owed balance and the regularity and punctuality of your payments.

Regarding type, there are three basic types:

1. Revolving accounts – these tend to be credit cards. Revolving accounts are charge accounts with established credit limits. They require a payment each month.

2. Installment accounts – most traditional loans. Installment accounts are loans with a fixed extension and fixed, regular payments. Imagine your car loan – that is an installment account.

3. Mortgage accounts – these are the big guys. Mortgage accounts are likely to be the biggest accounts on your report. When you are buying a home or borrowing against your home, you are using a mortgage account.

Credit Inquiries

Your credit report is accessible by companies to whom you apply for any form of credit, such as 1 hour payday loans. Every time that they check in on it, it is called an inquiry. Those credit inquiries will appear on your report so that other would-be creditors know how often you are applying for credit.

There are a few ways to categorize credit inquiries.

Hard inquiries are the ones that matter most. Those normally show up when you apply for a new $500 payday loan or credit card.

Soft inquiries are just like little check-ups. They occur even when you look at your own report.

Another categorization is by separating them along the lines of “voluntary” and “involuntary.” Voluntary inquiries are approved by you. Involuntary requests are usually made by companies offering promotional and pre-approved deals.

Public Items

Credit bureaus collect information on the public record, also. If you appeared in court as a result of unpaid debts or other owed monies, you may see that show up on your report. Many times, these are big red flags for creditors.

Among other things, bankruptcies, foreclosures, law suits and liens appear under this section.

Satisfactory And Negative Accounts

This is the meat and bones of your report. In this section, you will see all of your satisfactory accounts separated from all of your problematic ones. It will be very easy for anyone looking at your report to see how you fare with your credit.

If you miss payments, defaulted on a loan, are racking up debt or causing some other credit-related issue with one or more of your accounts, it will be separated and included in a section called “Negative Items.”

For anyone looking for the nitty gritty, check out the Equifax report first. Equifax includes a neat, one-page summary of all your accounts. The data included there is easy to read and process. Length of your credit history, overall debt-to-credit ratios and other really helpful information can be found there.

Review all of the satisfactory and negative accounts, but pay especially close attention to the bad stuff. Sometimes errors show up on your report! If you find one, address it immediately. It could be seriously injuring your credit.

Formats And Codes

While each of the reports is generally the same, it probably won’t hurt to get familiar with each of them individually. After all, each may use different systems to represent public records information, payment histories and other data.

Equifax report information, Experian report information, Trans-Union report information – once you’ve reviewed these pages, you should be fully capable of interpreting the coding of any of your credit reports!

How frequently should I check my report?

Conventional wisdom suggests checking your report once annually. If you feel like you want to look at it more frequently than that, the only thing stopping you is the cost. Each bureau is required to give you one free copy per year. The main exception to the once-per-year advice is that you should look it over before making any big purchases so you don’t run into any surprises.

Why do the reports differ?

The credit bureaus do not share information with each other (because they are actually profit-seeking private corporations and thus, competitors) and not every business reports to all of them. Most companies find it sufficient to report to just one. That’s why you get differences.

What is my “High balance”?

This number represents the peak amount that you have ever owed on that account. If you once owed $1,000 and now only owe $100, the high amount is still $1,000.

How can I check my late payment status?

Each of the reports makes your late payment information pretty self-explanatory. If you see numerical representation of late payments, the only number you want is a zero. “30,” “60,” “90” and “120” are all bad, and the bigger the number, the worse off it is. “Never late” is the written version of “0.”

I’m seeing some interesting phrases – “charged-off,” “placed for collections,” etc. – what do those mean?

Notations such as these mean that you went months without making an owed payment. As a result, the creditor wrote the debt into their accounting books as a loss. They didn’t expect you to suddenly show up and pay what you owed. These are quite bad, as far as potential lenders are concerned.

I’m married – are our credit reports related?

Not necessarily. All of your individual, private accounts will be listed on your credit report only. If you share joint accounts with your spouse, however, those will be documented on both reports. That condition also applies if you’ve made your spouse an authorized user/signer on your credit accounts.

Are my credit report and credit score connected?

Yes. In fact, your credit score is the briefest possible representation of your entire credit report. Without the report there would be no grounds upon which to base your score. Good report, good score.

“Account close by credit grantor” – is that bad too?

Yes, this is also a phrase you don’t want to see. This happens when a creditor suspects that your debts are exceeding your ability to pay. If that occurs, the creditor eliminates your access to the funds.

If you have more questions, keep checking around the site. We have answers to all your credit-related concerns!


How To Improve Your Credit Scores In 90 Days

Credit repair does not have to take forever. There are things that only time will heal, but the right strategies can turn your credit scores around quickly. Are you ready to do what it takes to see your numbers pop? It’s not hard if you know what to do. Here are the best short term credit repair strategies available. Put them all together and you get credit repair magic.

FICO Authorized User Accounts

Fair Isaac Corp has finally shut down the authorized user account broker industry. The latest release of the FICO scoring software is carefully designed to eliminate all benefit from purchased authorized user credit card accounts. But there is credit repair gold hidden in the news. Fair Isaac makes it abundantly clear that legitimate authorized users will continue to reap the same score benefits as always. So call Mom or Uncle Bob and have them add you to one or two of their excellent credit cards.

Get Two Or Three New Secured Credit Cards

You should see a significant jump in your scores from the new authorized user accounts, but this is not a substitute for building new credit in your own name. If your scores are too weak to get regular credit cards, just apply for a couple of small secured cards. This is a powerful credit repair strategy. Make sure to use less than 20% of the available limit on the card. If you max these new cards out it will be credit repair suicide. You have the power. Don’t blow it; use less than 20% of the card.

Pay Down Revolving Balances

Maybe you have plenty of credit and don’t need authorized user accounts or secured credit cards. If you have existing revolving debt you have the ability to move your scores very quickly by paying your balances down. There are five levels of card usage acknowledged by the credit scoring model: 20, 40, 60, 80, and 100%. If you want to boost your credit scores you should go for the gusto and pay your balances down below 20%. If you don’t have the resources to do this you should think about borrowing from a relative or friend. Make it happen if you can. This can add up to over 100 points.

Pump Up Your Credit Limits


There are two sides to the balance vs. limit formula. If you can’t get the balances down see if you can get the limits up. If you can reduce the ratio of card usage you will get the benefit regardless of how you did it. Just pick up the phone call each of your credit card issuers if they will increase your limits. It can’t hurt to ask. Sometimes credit repair takes nerve.

Challenge Your Collections

Get a copy of your three credit reports. Identify the collections and dispute all of them. Sound crazy? Actually, it’s almost crazy not to do this. Collections change hands often. It’s the nature of the industry. Did you know that the FTC requires collectors to withdraw reporting of collections if they sell the account to another collector or return it to the original creditor? Unfortunately, there is no incentive for them to cease reporting and no punishment if they don’t. If you dispute a collection and the collector no longer owns the debt it will be removed. But take care and read the next section carefully, because there is some potential credit repair danger.

Credit Repair And Your State Statutes

Challenging collections is a smart and justified credit repair strategy. But there are cases where it is simply not advisable. If the collection is larger than $1000 and within the statute of limitation (SOL) for collection through the courts, you just might wake a sleeping beast. The SOL for collection is usually less than the reporting period limit, and in many cases as short as three years. Check the SOL for your state and the state in which the account was open; the longer period applies. If the SOL has expired you can dispute with no fear. If the collector verifies the information as it appears on your report you should be able to negotiate the balance and maybe even have the account removed from your credit report.

Credit Repair Assistance

Credit repair help is always just a phone call away. There are many things that can be done to clean up your credit report and get your scores moving in the right direction. If you don’t have the time to do the job properly, call a credit repair professional. Don’t do the job half-way. It’s far too important. Pick up the phone and let a professional make your credit repair project a great success.


Why Do Banks Make So Much Money?

Banks make so much money because they can create money, effectively out of nothing, by lending. Every single pound in your bank account was created by a bank. Banks basically make money by lending money at rates higher than the cost of the money they lend. More specifically, banks collect interest on loans and interest payments from the debt securities they own.


Helping You Get The Credit You Deserve!

Are you fed up with bad credit? Are you ready to begin cleaning up your credit reports and improve your credit score? Here are a few tips from a credit repair professional that can give your credit score the boost that it needs.

Credit Repair And Your Payments

So you’ve decided to repair your credit. You need to enure all your payments are made on time from this moment on. Organize your finances and make sure there’s enough room in your budget for occasional unexpected expenses. Successful credit repair will require a certain amount of effort and you don’t want to undo your hard work and go backwards. Credit repair can transform your life so put in the effort and you’ll be rewarded.

Review Your Credit Reports

You can get copies of all three of your credit reports online from any of the sites listed at the end of this post:

Account Limits

Credit repair can be a daunting process. I recommend you take one small step at a time. Start by checking the credit limits on your revolving accounts. A significant portion of your credit score is based on the ratio of your current revolving balances to your credit limits. Many credit card companies under-report these limits and inadvertently do damage to your credit score. If you find any under-reported limits then inform the creditor and provide a copy of a credit card statement to the credit bureaus.

Eliminate Extraneous Accounts

Examine your credit reports for extraneous accounts, such as closed and paid accounts that are being reported as open with a balance. Also look for duplicate accounts. A duplicate account with no derogatory information can have a negative impact on your credit score. Duplicate accounts are a common occurrence and they can be rectified quite easily with a bit of credit repair. It is the credit bureaus rather than the creditors that most often cause these errors so a letter to the offending bureau should solve the problem.

Challenge Collections

The debt collection industry is the biggest single contributor to credit reporting errors and as such is well worth your attention. The FTC has made it clear in the “Fair Credit Reporting Act” that when debt is sold from one collector to another or returns it to the original creditor they should withdraw their reporting of the item. However, there is no incentive for compliance with this directive. You should therefore challenge collections as part of your credit repair effort.

Use Debt Validation

If you receive a collection letter then open it immediately and be prepared to respond. For a 30 day period following receipt of such a letter you are in control, legally. Don’t miss this credit repair opportunity. If a stranger were to knock on your door and ask for money would you give it to them? I hope not. Don’t give anything to a debt collector without first validating the debt. You have the legal right to demand proof from a debt collector that they have not only the legal right to collect the debt but also an objective accounting of the amount they are claiming. Do this within 30 days and do it in writing.

Know Your Statutes Of Limitation

Debts are not collectable indefinitely. If you’re beginning a credit repair effort this is one of the most important facts to know. Statues of limitation vary based on debt type and state. A search on Google is all it takes to find this information. Once the statute of limitation has expired a debt collector can no longer sue for the debt, and therefore will be unable to get a judgment. If a debt is past the statute of limitation then a debt collector has no legal way to collect. This provides you with two great credit repair options. You can send them a cease communication letter and you’ll never hear from them again, or alternatively you can contact them to negotiate payment. Once they know you understand your rights they should be content to settle with you.

Save For The Future

With all the effort you’re placing into your credit repair project you’ll want to ensure that nothing unexpected comes along to put you back to square one. The best credit repair insurance is a healthy savings account. If unexpected expenses occur then you’ll have some money set aside.


Strategies To Help Build And Maintain Credit

Almost everyone has some type of credit score. Some people have good credit, others have bad credit, and still others don’t have any at all. Because of these many different stages of credit, there are many different solutions to building credit. The following are a few strategies to help you get started at whatever stage you are at.

Different Strategies For Building Credit

Not having any credit is a better place to start than having poor credit, because you don’t have to rebuild any poor credit you may have had in the past. If you’re looking at building credit, the best way to do so is through applying for an individual, major credit card. For someone who doesn’t have any credit history, you might have to ask a family member, or trusted friend, with good credit to co-sign for you. Once you get approved for a credit card, make sure you pay all of your monthly payments. Remember that if you do miss a payment, your co-signer has to pick up the responsibility. Another option for someone who doesn’t have credit history is to apply for credit cards supplied by gas stations or department stores. These cards are pretty easy to get approved for, and if you stay on top of your payments, you will start building good credit. Usually after you go six months without a delinquent payment, you will be entitled to more credit and more options. If you want to pay off the previous loan you got to relieve your co-signer of their duty, you can take out a personal loan, pay off your previous loan, and start making payments on your new personal loan. Just remember not to ever borrow more money than you can pay back, and avoid high interest rates and upfront fees.

Different Strategies For Bad Credit

If you have already established credit, but you ran into some problems and it’s not very good, the place you need to start with is your credit history. You need to know what and with whom you’re dealing with. Your credit report will have all your transactions on it both good and bad. You can receive a free report once a year which can be obtained from either TransUnion, Equifax, or Experian. After you have reviewed your reports, and you know what you are dealing with, make sure that there are no activities on it that you did not authorize.

If you notice fraudulent charges on your report, immediately send notice to the credit bureau, and they will be required to follow up with an investigation. Once you feel you understand why your credit score is what it is, start paying off your bills one by one. Work on your secured debts first, and then move onto your unsecured debts, which can be put off a little longer. Repairing your credit is not an easy process, but it will be well worth your time. One strategy that takes discipline and sacrifice is to give up something that costs you money that you enjoy, and don’t do it anymore until your debts are paid off. This means you might have to get creative when it comes to entertainment or cellular phone services. Another helpful strategy is to use all the resources that are available to you. If you are good at selling things, maybe you could try to barter some goods on the internet; if you are good at business, maybe you might try opening up a small side business to get a little extra income. If you are being resourceful, cutting back on expenses, and researching your options, you will find yourself climbing slowly out of debt. Try to do everything in your power to never miss a payment, and you will not only get out of debt, but you will help yourself stay out of debt as well.

Good Credit Scores

Finally, if you already have good credit, give yourself a pat on the back—it’s not an easy thing to do in today’s fast-paced, immediate gratification society. What you want to do is keep your score, or even try to increase it if possible. Maintain, or update, your monthly budget so you can continue paying your bills on time. Don’t become reckless with your good credit and start applying for credit loans that you don’t really need. A good word of advice is to payoff what you owe now and buy what you want later. If you have good credit already, don’t get careless and forget all the work it required to get it that way.