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Are There Risks Involved With Debt Consolidation Services?

Are There Risks Involved With Debt Consolidation Services?

Are you currently carrying a massive debt load? Do you wonder if it’s another bill collector every time your telephone rings? Do you wake up at night wondering if you’ve forgotten to pay something? If so you may want to consider seeking the help of debt consolidation services.

And if you choose a debt consolidation services that do not charge a fee, one that is already subsidized by many of the creditors that they aim to help repay, you could benefit even more because they will be putting the entire amount that you pay towards your outstanding debts instead of keeping part of it as their payment.

However, non-profit debt consolidation services offer many other services than just debt consolidation and repayment. They also offer consumers advice on keeping their finances on target, developing workable monthly budgets, and how to repair a poor credit rating.

Getting your finances straighten out is of course the first step. The debt consolidation services will help you make a list of all your outstanding unsecured debts, how much you owe to each of them, and what the total amount you should be paying every month is.

The next step is to work out what your monthly expenses are. These include your mortgage or rent, your utility bills, child care expenses, and any other mandatory payments you must make, especially if they are guaranteed by your property. Once your budget is done you can decide how much you can spend each month to pay towards your debt consolidation.

Once you know how much you can actually afford to spend each month in repaying your debts, the debt consolidation services will contact each of your creditors and ask them to agree on a lower repayment amount each month. Sometimes they can even get your creditors to lower their interest rates or eliminate some of the fees that they have been charging you for being late or over your credit limit. Most creditors will want to work with you because they realize that if they don’t negotiate a lower payment, they are unlikely to receive any money for the outstanding debt.

Now let’s talk about what risks are involved in using a debt consolidation service. Basically, the only risk is if you use a debt consolidation service that is not legitimate or professional. Do some research and even ask your creditors if there is a specific company they work with regularly that they can recommend.

Beyond that, there really is no downside. And the upside is that you will have peace of mind in knowing that your bills are being paid on time every month.

Bad Credit Loan – Should You Get One?

Bad Credit Loan – Should You Get One?

Sometimes it becomes necessary to be able to put your hands on some money, when you need it, even if you have bad credit. Your credit rating has nothing to do with whether you need money or not. Today, lenders make it much easier for people with bad credit to be able to get the money they need. Here are some things that you need to know about bad credit loan to be able to get the money you need.

You can get loans for just about anything – even with bad credit. There are, however, some things that the lenders will want to see before they give you a loan. Generally, they will want to see that you have a good job, and have been there a while. They will also want to know that you are now able to make payments because you can afford them. Although your credit ratings may not be good, you still should be able to make timely payments. A funny thing about bad credit loans is that someone may qualify, even if they just finished bankruptcy proceedings last week – if these other conditions are applicable.

Whether you are interested in getting a mortgage for a new house, or for a car, or even for debt consolidation, you may be eligible. You should be aware, though, that the kind of deal you will be able to get will not be the same as someone who has good credit. The lender will probably limit you in three ways, making it a little less than the ideal loan. First, it will have a higher interest and it could be quite a bit higher. Second, you will be limited in how much you can borrow. And, third, you will not be able to have as long of a repayment period as someone with good credit.

So, if these conditions bother you, then there are also a couple of things that you can do to get a better deal. They all, however, start with the word “wait.” If you can wait a little while, before you get the loan, it may mean quite a bit of saving to you in the long run. Take some time and reduce your existing debts as much as you can first. Repair your credit. Then, you will be able to get a better deal. The amount of savings that are possible to you, by waiting and following these simple steps, could be sizable.

Other than that, money is available to you. If you already have a house, though, then probably the best way you can get money is by getting a loan based on your equity. Get a home equity line of credit (HELOC), and you will have money to play with.

People that do not have a house can get a personal loan, and may not even have to provide any collateral. Either secured loans (with collateral), or unsecured loans (no collateral), can be obtained with bad credit.

When you go to get your bad credit loan, though, you need to be aware that there are fraudulent companies that are looking for people with bad credit. They feel that you are more desperate to get money and can be more easily taken advantage of. So be careful, look into the company that you are dealing with, especially if you have never heard of them before – and shop around for the best deals.

Credit repair is as important as getting out of debt

Credit repair is as important as getting out of debt

Avoiding complications in credit repair is almost important as getting out of debt. When we have bills that were neglected simply because we didn’t have the money to pay the bills, or else we purchased items instead of paying the bills, we are in debt.

If you are considering a Home Equity Loan to get out of your current mortgage, don’t. Why? Simply because most Home Equity Loans get you deeper in debt and once you are obligated you will find the problem is more complicated than when you applied for the loan.

Lenders often target homeowners with financial difficulties offering them high-interest rates and making them believe it is a solution for debt relief. In most cases, this is where foreclosures come in, or selling homes come into place. The solution is only an option to get you in debt deeper. One solution then is for homeowners to consider Reverse Mortgage Loans. This type of loan is often as equity against your home, belongings, and so on. The loan offers a ‘cash advance’ solution and requires that the owner does not pay on the mortgage until the end of the mortgage term or when the home is sold.

Most lenders provide a lump sum advance, a line of credit, or else a monthly installment to the homeowners. Some lenders even offer a combination to the homeowners. This is certainly a good solution for repairing your credit and building your credit to a new future. The downside is that Reverse Home Mortgage Loans often are more suitable for the older generation of people that have built equity over the years in their homes. Another disadvantage is that almost all home loans require upfront payments, such as title, insurance, application fees, origination fees, interest, and so on. Therefore, it pays to ask questions and shop around before taking out another loan to repair or build your credit. Fannie Mae Home Keeper Mortgage Programs are one of the many that offer a Reverse Home Mortgage Loan.

Another option for paying off your debts and repairing your credit is to borrow the money from family members or friends. If you have someone that trusts you enough to loan you the money to get out of debt, it is often better than getting a loan. There are several options or questions you must consider before asking family members or friends to loan you the money to build or repair your credit. One of those questions should be obvious. Can these people afford to lend me the money to get out of debt? Are these people kind enough to loan you money without putting high demands on you? Of course, there may be interest involved, but remember they are loaning you money they could be spending on their own bills. Is it possible that you can repay the loan without complicating your situation further? Can I repay these people that loan me the money to free myself of one debt? How long do I have to repay the loan? Make sure there are no extra complications before asking friends or family for money to help get you out of debt.

One of the best solutions for finding a way to repair your credit is searching for the options to make the money yourself. If you have a mortgage payment and struggling each month to make ends meet, you might want to sell your home. Many homeowners go for this option simply because they make more money in the long run. Once they sell their home they are often able to repay their mortgage loan and then take out a loan for another mortgage more affordable. If you decide to sell your home to repair your credit and get out of debt, be sure that you look around for the best possible solutions in order to prevent further complications.

Make sure you know how much is owed on your home before you set a price for resell. If there are any repairs that are minor or major, try to repair them first before selling. If you can’t afford to repair the home, try to do the minimal repair so that you can up the price of the home you are selling.

Getting Approved For Your First Unsecured Credit Card

Getting Approved For Your First Unsecured Credit Card

Credit cards are considered as one of the necessities in today’s life. Besides, with an unsecured credit card, you can literally purchase any product or service without having money in your pocket at all. No longer will you run the risk of getting your money stolen by simply having a credit card.

However, with all the advantages that a credit card can give you, you will find that it is quite difficult to apply for a credit card and getting approved. There are a lot of things you have to consider before a credit card issuer or a bank can get you approved for a credit card.

The first thing you need to know and need to have when applying for a credit card is a good credit rating. Your credit rating is one of the essentials that a credit card issuer or a bank will look at in order to get you approved for a credit card. By having a good credit rating, you will be sure that you can get yourself approved.

However, if you don’t have any credit history or a bad credit rating it will relatively be hard or even impossible for you to get approved for a credit card. In order to obtain a credit history or repair your credit rating, you can always apply for a secured credit card.

Unlike an unsecured credit card, it will require you to deposit money on an account. The amount you deposit will be the credit limit for a secured credit card. You will also receive a monthly billing statement like an unsecured credit card.

You have to remember that a prepaid credit card and a debit card are different from a secured credit card. Debit cards and prepaid credit cards will never repair or build your credit rating.

One main disadvantage of a secured credit card is that it will usually have a high-interest rate than most unsecured credit cards. However, it is also a great way to control your credit card purchases. It is also a great way for you to become a responsible credit card holder and help you prepare to own an unsecured credit card.

Not only that it will also help you build a good credit rating or help you repair a bad credit rating. With this kind of feature, you will definitely get yourself prepared to own an unsecured credit card.

Owning a credit card will also mean being more responsible for your purchases. With a secured credit card, you can train yourself to be a more responsible credit cardholder. This is because, aside from the advantages that an unsecured credit card can give you, there are some people that buy irresponsibly. The feature that a credit card offers will usually tempt people to buy things that they don’t really need and will often result in getting into huge amounts of credit card debt.

By first getting an unsecured credit card, you will be sure that you can be a more responsible credit cardholder.

So, if you want to apply for an unsecured credit card, getting a secured credit card first is recommended if you don’t know what you are getting into or if you want to build a credit history or repair your credit rating.

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 Use A Credit Card To Help Repair Your Credit

How To Use A Credit Card To Help Repair Your Credit

Getting into a state of bad credit is never fun. It does not, however, mean that your fun is entirely over. There may be some rather simple things that you can do about it. One of these is to get another credit card. Not just any credit card, but one that will help you to repair your credit. Here are some things you need to know about it.

Some Ways to Repair Your Credit

Depending on just how bad your credit is, there may be more than one thing you can do. Be sure to look over your credit report and find out if there is any misreported information there. Things that have been entered by mistake, for instance, or things that occurred a long time ago but have since been properly taken care of. Many times, a creditor will be willing to make some changes for you if you will talk to them.

One type of credit card that will help repair your credit is one for people with bad credit – if you are already there. This kind of card can be obtained from many credit card companies and usually comes without any kind of frills whatsoever. Although it may offer low interest, it usually makes up for this with plenty of fees and very low credit limits. The fees may be worth it because, with timely payments from you, your account will be evaluated every now and then, and your credit limit can be raised – along with better offers. Make sure, though, that the company regularly reports to the major credit bureaus.

Other credit cards for people with bad credit have much fewer fees and a greater deal of flexibility. Look carefully and you may be able to find a credit card that will fit your lifestyle a little better and give you better rates. The interest rate on this type of card can be above 19%, and it can also include yearly fees, too.

Another type of credit card that you can get if your credit rating is better, is a balance transfer credit card. This will allow you to reduce your credit card debt (if you have any) by giving you the possibility of paying down your debt without any interest. Check on the time period of this, though, and get as long of a period as possible – try to get a year or longer. The better cards will have no fees attached for this privilege.

No matter what kind of credit card you get, though, it could lead to further trouble with bad credit if you do not handle your credit card right. This means you need to make your payments each month on time and seek to keep your balance down to zero – if possible. Make sure your credit card agency does report regularly to the credit bureaus and before long, you will find that your credit rating has improved. You will want to destroy other credit cards when they get paid off if you are the kind that will probably start charging again.

How To Repair A Bad Credit History

How To Repair A Bad Credit History

We all get into financially tight situations from time to time. Short term financial demands can catch anyone by surprise. It could be around the birth of a new child, medical expenses, or just Christmas or birthdays. Whatever the reason, without care, financially tight situations can result in a bad credit history.

It’s possible to get a bad credit history very easily. The credit reference agencies, Experian, Equifax, and Transunion maintain details on almost every adult in the country and they have a level of detail that for many are frightening.

As a matter of course the credit reference agencies have your personal details, your name, address, and previous addresses, as well as credit information. If you have a mortgage they know about it. If you have any loans, credit cards, or store cards they know about them and they know what payments you make.

If you rent your home the odds are they know. In fact, they usually know the details of virtually all financial arrangements where there is any risk of a debt arising.

If you’ve applied for loans, credit cards, or any other purchases or financial arrangements they know you applied, even if the application was unsuccessful. They also know how much you borrow, your monthly repayments and if you are ever late with a payment – even if it’s by one day and caused by things outside your control!

How do they know? All the banks and financial institutions routinely tell them. The reason they tell them is that it is in their interest to do so. They know that by telling the credit reference agencies all the details an accurate picture of your financial position is created. A picture they can use the next time you apply for credit.

If you do miss a payment it will be recorded and that information stays on their records for 12 months! If you default that stays on for at least 3 years! Just missing a couple of payments can very easily mess up your credit score.

Once you have a bad credit history it can be a real nightmare. With a really bad credit history, you are pretty much financially disabled from everything except transactions that can be covered with cash.

Finding an apartment to rent, trying to buy a car, putting a down payment on a house, or applying for a credit card or a loan from a bank are all activities you are barred from with a bad credit history.

Banks, businesses, and decent landlords can see a bad credit history a mile away and will avoid you like the plague. As a result, all the steps that are supposed to build a good credit rating are no longer available. How can you break out of this credit catch-22 once you get stuck in it?

A good place to start is to contact a credit counseling service. Depending upon where you live there may be a free service you can use otherwise you may be forced to use a paid service. Paid or unpaid all these services do the same thing. They will conduct a complete financial assessment of your situation. It is imperative that you tell them everything, so don’t hold back any debts, they need to know.

If possible they will help you set a budget and find a way for you to repay the overdue payments, past debts, or forgotten bills. This will involve you paying extra to cover the arrears. Even if this is possible it will not, on its own, immediately repair your credit rating as the details of the missed payments and bad debts will stay on the record for at least 12 months.

If you are unable to clear any overdue bills or payments the counseling service will then approach your creditors. They will seek to come to some arrangement which allows you to pay smaller amounts over a longer period. They will initially seek an informal arrangement with each creditor but they can also seek formal arrangements where you pay an affordable amount, usually over 5 years.

So long as you keep up these reduced payments, and depending on the type of arrangement and where you live, after 5 years the debt may be cleared and your credit score will improve. Any arrangements with creditors will be notified to the credit reference agencies and are normally help on file for 3 or 6 years.

A third option, and the quickest, is to take out a consolidation loan to pay off all your debts leaving just one lower payment to make each month. If you own your own home – either outright or on a mortgage – this loan can be secured on the property either as a mortgage/re-mortgage or a separate secured loan.

With a property as collateral, it is relatively easy to get additional funds as the lender will have the security of your home and if you fail to pay, sometimes only one or two missed monthly payments, they will go for repossession to get their money back.

Without collateral obtaining a debt consolidation loan is more difficult but not impossible. Without the security of a property however, you will normally pay a significantly higher interest rate.

If you clear all of your debts using a debt consolidation loan cut up any credit cards and close the accounts. Make sure you don’t fall into the same trap again.

So long as you make all the due payments and you are in control of the situation, many of the pressures will ease and, with hard work and self-control, your bad credit history will become a thing of the past.

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.

Help With Building Credit

Help With Building Credit

There are some tried and true ways of building credit if you are just starting out. It is often in the early days of using credit that many younger people fall into trouble. The last thing any young man or woman or just married couple needs to do is ruin their credit rating before they even get started. Here are some tips that can help you build your credit and help you stay out of trouble.

All consumers, regardless of age, must know that living without credit these days can be hard. Homes, cars, college education all require the use of credit for most people. Without sources of credit, many people simply would not be able to afford these things. Credit ratings are also used for other purposes as well, such as employment and security clearances. All in all, having a good credit record is a very valuable thing to have in this day and age.

There are actually many ways of building credit. Here are some tips that can help get you started:

You need to put your apartment and your utilities in your own name. If someone else, like mom or dad, has their names on these items they will get the credit boost, not you.

If you are working and can afford it, apply for some credit at a local store. The credit does not have to be large, and, in fact, it should be small enough that you can easily make the payments.

You can apply for credit with an oil or gasoline company as they often have lower criteria for giving credit. This can be a good way to get your foot in the door towards getting better credit cards later on.

Again, if you are working steadily and can afford it, apply for a small loan from your bank. If you get the loan, make sure that you pay each payment on time and in full. This will be a huge boost to your credit history.

You may want to apply for a secured credit card from your bank. These are credit cards that require you to put a certain amount of money into an account. Your credit limit on the card is equal to the amount of money you have in the account.

It is important that all of those creditors that you are working with report your payment history to the credit reporting agencies. This is normally done as a matter of course, but it is good to check on this every now and then just to be sure.

Once you have some accounts, it is vital that you make your payments on time and in full. This cannot be said enough as this is the leading cause of bad credit reports.

If you find that you simply cannot make a payment, contact the creditor as soon as possible and explain to them what the problem is. They will often work something out with you and if you can get the payment in quickly, they may not report the late payment to the reporting agencies.

Five Tips For Building A Good Credit Score

Five Tips For Building A Good Credit Score

Improving yourself is always a good thing. If you thrive hard to become a better public speaker, you can might yourself a promotion. Exercising and going to the gym can help you lose weight and have the figure you have always wanted. But the best thing of all is improving and building your credit score. This can help you save hundreds and thousands of dollars on your biggest purchases.

For some, it may be hard to keep up a good credit score but actually, improving credit is not that hard to achieve. You just need to be patient and learn a little bit about the credit scoring system and how it works.

A person who is patient and willing to improve their credit profile can do it easily. There are five things that they can follow in order to boost their credit scores.

1. Check your own credit report from time to time. It is necessary to regularly check your credit and take the steps to remove any inaccuracies in your credit report. Sometimes bad credit is caused by simple inaccuracies in the report. If you see something, contact your creditor immediately, and work to correct the error as soon as you can. Leaving an inaccuracy on your report counts against you.

2. Be on time with payments. Literally, it means that you have to pay all your bills on time. If you are always late with your payments, it will affect your credit report and score. Also, collections and bankruptcies have the most negative effect on your credit report. All reports including the late payments are noted and written in your credit report.

3. Learn how to manage your debt. You must maintain the balance of your credit report to 35% of your available credit limit. Make sure that you always watch your accounts and estimate if you can still handle the using more credit.

4. Avoid unnecessary inquiries. Every time you make an inquiry, it is written in your credit report. Even if you have no plan to open a credit account, your inquiry records will show how often someone has looked at your report and will cast doubt on your ability to pay. So as much as possible, do not make an inquiry into your credit report unless it is important.

5. Give yourself time. Time is considered one of the most significant aspects that can help improve your credit score. Time management is important to get yourself on the right track and show that you can handle your credit responsibly. You can also keep even the oldest account open in order to help make your credit use look longer.