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Consider Consumer Counseling To Help With Debt

Consider Consumer Counseling To Help With Debt

It can be a challenge today to not spending money when others around you are driving expensive cars and living in your dream home. A result of this due to the availability of credit today is that individuals forget amidst their spending that the money they borrow on credit just be repaid, and with interest. If you are struggling to get out of debt, one of the best ways to consider a consumer counseling service.

It is not impossible for even rational individuals to be optimistic about their future ability to repay a loan. Believing that the monthly payments associated with a loan will not be a burden to repay, they take out the loan. Later, however, it may become obvious that the payments and money owing is outside their financial budget and possibilities. When the time comes that bill collectors to be calling, consumer counseling may be a good choice to assist with credit card debt settlement. Should you find yourself unable to repay your debt and handle settle debt yourself, here is some advice in choosing a good consumer counseling service.

Start your search either online or in a phone book but beware of possible scams. If the organization claims they can repair your credit in a very short time, you are dealing with a concerning company and you continue your search.

Reputable and trustworthy consumer counseling services will test you with some prerequisites before accepting you as a client. The perquisites may be different for each company, but the general requirements are a source of income and a minimum amount of unsecured debt. If you have trouble with secured debt such as a car loan or mortgage, it may be difficult for them to help you.

When you first meet with your credit counselor, be sure to have copies of all statements from your current loan or credit accounts. They will need to know the specifics of your financial situation, such as the amount owed to the creditors, the current monthly payments, and interest rates.

Thereafter, it is in the hands of the counselor. They will contact your creditors and negotiate a new monthly payment and lower interest rate. You can decide if you want to handle and submit the payments yourself or make a lump sum payment to the counseling service. If the latter is chosen, the counselor will make the payments to your creditors. Once an action plan is determined, the counselor will help you improve your general financial situation by creating a budget. A budget will help you avoid future debt and another financial situation. Today, there are even software programs to assist you in following and managing your budget. Of course, you can seek the advice of your counselor when you need it.

One last note, do not count on using your credit cards during the consumer counseling process. The service will require you to sometimes cancel the cards or stop using them until you have repaid your debt and repaired your credit.

Don’t Despair With Credit Score Repair

Don’t Despair With Credit Score Repair

Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Thankfully, credit score repair is available to give you hope.

Some creditors may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

If you’re not disciplined enough to create a workable budget and stick to it, work out a repayment plan with your creditors, or keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. For example, just because an organization says it’s a “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

If you are considering filing for bankruptcy, you should know about one major change to the bankruptcy laws: As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, credit score repair, money and debt management, and budgeting.

Counselors discuss your entire financial situation with you and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

Consolidating your debt, paying your bills on time, cutting on the frivolous expenses, and preparing a budget for your discretionary income will help you overcome the mountain of credit card debt.

It may look bleak – even impossible – but if you stick to your plan, you will be able to dig yourself out of this hole.

Key To Wealth-Building and Avoiding Bankruptcy: Approaching Your Credit Rationally

Key To Wealth-Building and Avoiding Bankruptcy: Approaching Your Credit Rationally

The primary purpose of good credit is to save you money by helping you procure lower interest rates that otherwise wouldn’t be available to you. Interestingly, some consumers fail to recognize this fact when considering the appropriate option for debt resolution, sometimes resulting to bankruptcy. The main reason? A lot of people interpret their credit on an emotional level instead of a rational one.

That is, they think of their credit score as something more than it is. For them, it is more than just ONE tool that lenders look at to determine whether giving you a loan will be profitable for them. It becomes a matter of pride, not a matter of financial health. In the end, the mistake of thinking about one’s credit on an emotional level instead of a rational one can cost a consumer buried in credit card debt. Then, they only able to afford minimum payments thousands of dollars in finance charges and even more in the years of life consumed by financial anxiety.

Why Do Some People Were Engaged in Bankruptcy

Another part of the problem is that most people do not understand what makes up their credit score. It is happening even when they are trying to tackle the issue rationally. The largest components of your credit score ─ your credit history and the amount you owe ─ are both influenced by debt settlement, one negatively (credit history) and one positively (the amount you owe).

Your credit history is marginally more important than the amount you owe when factoring your score. However, the difference (5%) is rarely enough to compensate for the savings from enrolling credit card debt into a settlement program. The more money you’re able to save from enrolling in a debt settlement program, the less the credit impact should be considered a factor. Why? Because any higher interest rates that you’ll end up paying down the road as a result of the credit impact will rarely outweigh the money you saved by settling credit card debt.

Who benefits the most from a settlement program

  1. those people who owe a lot
  2. people who can only afford to pay the minimums
  3. people who are paying high interest
  4. all of the above.

To illustrate this point, consider the following examples.

Let’s assume that you owe $30,000 in credit card debt. Your average annual percentage rate on these cards is 19 percent. You are only able to afford the minimum monthly payment, which in your case adds up to $750 total. Given this scenario, it would take you approximately 12 years and $108,000 before finally, you dug out of debt. In a debt settlement program, however, it would take approximately 3 years and $16,500 total to eliminate your debt. That’s a $91,500 difference versus making the minimum payments. Rarely will your subsequent higher interest rates ever make up the savings from debt settlement, especially when you consider the fact that you can always refinance any loans once you’ve built up enough equity?

One of the most frustrating things to come across in our industry is a consumer who owes a lot. Despite this, he is only able to afford the minimums. He is also unwilling to sacrifice his credit even in the slightest bit in order to climb out of debt and save money. I recently dealt with a consumer from the South Side of Chicago who was $40,000 in the hole with credit cards. His interest rates were at 29 percent. He was only able to afford the minimum payments, which amounted to $1700 total in his case.

When he tried to convince the creditors to lower the rates, they simply told him that based on the amount of outstanding debt on his credit report he was too much a credit risk, so they needed to charge him higher interest. When he tried to obtain a home equity loan, he was turned down for the same reason. It happened ven though his credit score was in the high 600s.

Yet when I mentioned that our debt settlement program might impact his credit negatively, he scoffed. There was no way he would ever affect his credit negatively. At the end of our conversation, I tried to refer him to our affiliate credit counseling company. However, he wasn’t interested because enrollment in a debt management plan would appear on his credit. His decision to stay on course with the minimum payments will ultimately cost him over $20,000 a year. Probably his young children the opportunity to attend a 4-year college, maybe more.

This consumer failed to be realistic and rational in his approach to the impact of debt settlement on his credit. It worsened his financial situation significantly. He thought of his credit score not as something that can save him money by getting him lower interest rates on loans. Rather, it’s a some sort of social marker on where he was at in life. He considered the idea of a negatively affected credit score probably much like someone in the Middle Ages. He thought about the idea of being excommunicated or the way a 14-year-old feels about not being part of the “in crowd” at school.

When considering your debt resolution options, I urge you to look at the options available to you realistically. Here is a famous Winston Churchill quote on democracy. Think of this when comparing debt settlement to the other options available to most consumers.

Debt settlement is the worst form of debt resolution, except for all the rest of them.

Judgment Proof, Credit Rating And You

Judgment Proof, Credit Rating And You

Being deeply in debt usually means that the credit rating is also badly damaged. For some folks in this difficult position, doing nothing could be an effective way of dealing with their loans and credit situation and this is where the clarification of the term “judgment proof” comes in.

People with very little income and property without expectation of change in either have really nothing to lose. They cannot go to jail for bad debt, and both state and federal laws protect them and what they need for essentials such as basic clothing, ordinary household furnishings, food, and even Social Security and disability benefits.

In essence, it makes no sense for a creditor to take them to court because even if the creditor wins and obtains a judgment, they cannot collect on it. This is what “judgment proof” means.

For these individuals not paying off debt and credit rating seems not to have a tangible impact on their finances.

I said it appears because this situation creates deep hopelessness that really prevents people to take necessary action to improve their lives and their finances. If you are in this position, you know what I mean. I remember working in a neighborhood and with people in this situation for two years and the despair turned into violence was like a dark cloud that hid the sun. It was always there.

If you are in this situation, I know it is hard to think clearly. But wouldn’t it make sense to begin taking steps to get yourself out of it? Stop thinking that you have nothing to lose so why bother?

The point is all the things you can gain and not the things you do not have to lose.

It is true that your creditors may not want to sue you if they do not think you will ever have the ability to pay or that they cannot collect, but what about you? Do you also think that you will never have the ability to pay off a debt?

Debt like most things in life is a reflection of unrecognized opportunities. A lack of ability to pay off debt shows that you have yet to recognize something valuable in yourself that you can contribute and get paid for.

One of the better debt counseling and credit repair suggestions that I can make to a person in debt is within the statement, Know Thyself. Really coming to understand this statement opens up opportunities beyond imagination.

Call a debt counselor or a credit repair specialist, but by all means, go to the library and also pick up a book to help you get to know yourself.

How To Contact a Creditor To Help With Credit Repair

How To Contact a Creditor To Help With Credit Repair

Good credit has become nearly a necessity these days. Credit has become almost essential to buying a car or a home (unless you have large amounts of cash lying around) and with the advent of online buying, it’s generally difficult to operate without some kind of credit card. Unfortunately, credit does cause problems for some people. Minimum payments on credit cards can be missed, or a loan could go into default and your credit rating will begin to slide. When you have negative activity, the creditor reports it a credit reporting agency, who then records it on your credit history. A tarnished credit report can be tough to clean up, as most negative items will remain to stay on your report for seven years before they expire and are removed.

If you have a bad credit history, you’ll end up dealing with previously unknown problems. You can’t rent a car or buy things online, renting a property will be difficult, and getting a mortgage may be impossible. It’s important to repair your credit as soon as you notice a problem because you’d be surprised at what kind of credit repair you can accomplish by being proactive.

The first thing you should do if you fall behind in your loan payments is to contact your creditor. This can be scary and many people take the opposite approach, avoiding “collection calls” out of embarrassment or even fear. Unfortunately, it’s best to deal with the problem immediately and to avoid long-term credit difficulties. Contact your creditor right away – as soon as you find you are having trouble with debt.

Remember the solution to your credit repair process starts with your credit report, and what is on your report is what your creditor reports about you. By contacting your creditor, you may be able to discuss possible payment plans or alternative solutions. It is in the creditor’s best interests to work with you, as if you go into default, they might never get paid.

There are many reasons that you should contact your creditor immediately, but most of all, it helps to speed up the credit repair process. Once you’ve contacted your creditor, suggest a payment system that works for both for you. Be sure to propose a payment plan that is realistic for you, and stick to it. Defaulting on these payments will look to the creditor as if you were just trying to stall and avoid further payment.

When you contact your creditor about your outstanding debt, be sure to remember that it is in your best interest to convince your creditor not to report your non-payment to the credit report agency. By facing up to your payment problems, contact your creditor right away, and creating a payment system that will work for both of you, you are taking a very effective step credit repairing your credit.

Good Credit Score Benefits – The Higher Your Score, The Better For Your Credit

Good Credit Score Benefits – The Higher Your Score, The Better For Your Credit

Credit score repair starts by taking steps to improve the credit score you have on your credit report. Good credit score benefits are something that everybody wants to achieve if they need to apply for a loan and other services. Creditors see you as a good risk to repay the money you borrow. The higher your score, the more loans and lower interest rates you are likely to qualify for. If you have a low credit score, then you do need to consider ways of credit score repair.

What does my credit score mean? This is one question that people often ask when they get their free credit reports. In order to do well with credit score repair, it is necessary to know what information the score is based on. One important factor is your payment history. These are the details of your accounts, your monthly payments, and whether or not you make them on time. If this is what is causing you to have a low credit score, then a simple way of repairing your credit score is to start paying all your bills before the due date.

What is considered a good credit score? Credit scores range from 375 to 900. Most people with good credit have a score of around 600 to 650. If you have a score higher than 650, then you are in good financial shape when it comes to getting credit and you don’t have to worry about credit score repair. It is when you see your score below 550, then you have to start taking steps to repair the score.

How can I find out what my credit score means? If you look for information about credit scores online, then you will find the percentages that each of the following are involved in computing the score: payment history, amount of money you owe, length of time you have been borrowing, the types of credit you use and the amount of credit you have received recently. There is also a section of your credit report that tells how many times you have applied for credit in the past few months. If there is a list of names, you have to stop applying in order to do credit score repair.

Credit score repair benefits are not something that will happen after a month of paying your bills on time. It is something you have to work at and it could take six months or more for you to notice again in your credit score repair. Just keep the range of a good credit score in mind and work at paying your bills. No one can do this for you – only you.

Achieving good credit score benefits is perfectly possible, despite what you may have been told. But don’t expect it to be fast.

Credit Repair Services! When Debt’s Bogging You Down, A Repair Service Can Help

Credit Repair Services! When Debt’s Bogging You Down, A Repair Service Can Help

For some reason debt seems to creep up on many individuals, and when you’re credit line is about to be yanked, and the bills are piling so high that you can’t see the kitchen table anymore, then seeking reputable credit repair services in your community or online is a step in the right direction!

When you start searching for the right credit repair services, you have to determine what really needs repairing. If your credit is just starting to slide in the early stages, and you’re still making the payments on your bills barely, then you may only need to negotiate a consolidation loan to lower your monthly payments.

However, if you’re credit situation has become extremely poor and out of control, and you have already missed several necessary payments, then you may be in need of counseling, or a necessary debt management service to help you fix your credit, and bureau reports!

Determine Whether You Need Credit Repair, Or Solutions To Save Your Credit!

Only you will know prior to contacting a financial assistance company, what your current financial standings are, and how much help you will need to get back on your feet again.

To clarify this a little further is that you’re hopefully out of your denial stage, and you have finally come to grips with where you actually stand with your finances. Many individuals that spiral into serious debt, and eventually into possible bankruptcy, are ones that believe they don’t need the help, they have too much pride to ask for the help, and by that time it’s too late to get the important financial assistance.

Once you determine where your finances are positioned, then it’s time to contact debt management organizations, or loan services to start improving your personal or business finances immediately. If budget advice and financial restructuring are beyond your reach, then you need to contact a good debt counseling company in your community or online, and whichever makes you feel more comfortable, allow them to design a plan to work with your current creditors so you can quickly get out of debt.