Everyone wants to improve credit but not everyone knows how. Can you imagine an improvement to your score? Of course you can hire someone to fix it for you and counsel you on the matter. Chances are you cannot afford that if you already have bad credit. You can improve your credit yourself. Just use a few simple tips and you will be well on your way.
Be safe and watch your credit closely. If you have a high credit score you can get anything, but not so with a low credit score. Make sure that you obtain a copy of your credit report once a year in order to make sure that all the information contained in it is correct.
Be sure to watch the due dates on your bills. Make sure to pay things like the phone and light bill on time. Even these will affect your credit standing. Not so much when you pay the bills on time but miss a payment or two and you will see a negative impact on your credit very quickly.
Missed payments lead to delinquent accounts and all of those end up on the credit report with negative terminology lowering the score. Paying on schedule will give you a history of being in good standing with creditors and make it easier to obtain financing.
Avoid the rubber! Checks are nice to have but they do not mean you have money. The checks you write are only covered if you have the money in the bank. Check Systems is what the store just ran your check through and denied it for your purchase because you bounced one. Guess what? The bank sees this as well when you apply for a loan.
Even a small effort makes a difference. With a bad credit history getting a loan is nearly impossible. Start trying to get small loans at places that will report your payments to the credit bureau. This will help to improve credit easily. Making even small payments on time can help you. When you first start you may need a co-signer to ensure the loan is paid.
Do not let a collection agency have your account. Once you have let an account get past a certain point they turn them over to agencies that will do anything they have to in order to get their money. The creditor benefits as well by negotiating and working out an agreement with you because they do not fully recover all their money when this happens. This can lead to judgments as well. Judgments allow your wages to be garnished. In order to improve credit after this you need a near miracle.
Improve your credit by staying at one job as long as possible. It shows stability, so does staying in one home instead of moving around. The longer you are at your job the more you will make. This will give you a large source to show creditors for taking care of your debt.
Alan Largo is the creator and administrator of My Credit Bible and strives to assist others identify with their adverse credit situation through informative reviews. You're invited to visit My Credit Bible to read his most recent article review.
Showing posts with label get out of debt. Show all posts
Showing posts with label get out of debt. Show all posts
Friday, June 06, 2008
Thursday, February 28, 2008
Debt Collections: How To Pay Off Accounts In Collections
Next to bankruptcy, having an account in collections is the worst entry you can have on your credit report. It will lower your score, and make it difficult- if not impossible- to obtain new credit. Creditors realize that if you have an account in collections that it went unpaid for a long period of time, and it makes them fear that if they lent you money they would not receive payments on time, either. Once you have an account in collections, your goal is to improve your credit and get the collections accounts deleted, or at the very least, updated on the credit report to say "Paid as agreed", "Current", or "Settled".
The damage is done the moment the account is reported as being in collections. Before you pay off that collection account, you want to negotiate with the debt collector to have the credit report updated to one of the more favorable notations, as described above. You do not want to deal with the nightmare that many people face because they didn't negotiate with the creditor and get the intention in writing for the update of your credit report- some people have paid accounts off that are in collections and their credit report is not updated. For at least seven years after the account is paid off; the individuals end up having problems getting new credit because the account still appears in negative status on the credit report.
The Best Scenario for You
The best you can hope for in terms of improving your credit is to have the collector delete the account from your credit report entirely. Send a "pay for delete" letter to the collector, and offer a settlement payment that you will pay them in exchange for the deletion of the account from your credit report. Get the collectors response in writing before you make a payment, to be sure you have proof of the arrangement in the event they don't follow through with their end of the bargain.
If you prefer to call the debt collector, you chance being recorded saying something that can be used against you in a judgement case. You'll want to get the agreement from the collector in writing anyway, so it's a good idea to do this in writing anyway.
Debt collectors do not have to remove accurate entries from your credit report, even if you offer a settlement, so not all debt collectors will agree to this scenario.
Second Best Scenario for You
There are a number of collectors who will hold out in hopes of getting the payment in full and will refuse to delete the account from your credit report in exchange for a settlement (less than amount owed) payment. If this is your situation, you'll have to offer to pay the full amount to get the collector to delete the account from your credit history report.
Not as Good, But Acceptable!
There are some collectors who simply refuse to remove an entry from your credit report, even when you've made payment. You would then want to get the collector to agree to update the notation to "Paid in Full"; whether you make a settlement payment or the full amount.
Unfortunately, a number of collectors won't report it as "paid in full" if you settle. If you get the debt collector to agree to a settlement payment, but not "paid in full", it would still be acceptable and better than your current situation to have the account reflect "Paid- Settled" on your credit report. It will not result in an instant, huge boost in your credit score, but it is certainly better than the situation you're in now (having the account in collections) and is the best alternative if you can't get it deleted or marked "Paid in full" for making a partial payment. (If you have the money to pay the account in full, do it because the notation on your credit report for an account paid in full is much better for you over the long term!)
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com
The damage is done the moment the account is reported as being in collections. Before you pay off that collection account, you want to negotiate with the debt collector to have the credit report updated to one of the more favorable notations, as described above. You do not want to deal with the nightmare that many people face because they didn't negotiate with the creditor and get the intention in writing for the update of your credit report- some people have paid accounts off that are in collections and their credit report is not updated. For at least seven years after the account is paid off; the individuals end up having problems getting new credit because the account still appears in negative status on the credit report.
The Best Scenario for You
The best you can hope for in terms of improving your credit is to have the collector delete the account from your credit report entirely. Send a "pay for delete" letter to the collector, and offer a settlement payment that you will pay them in exchange for the deletion of the account from your credit report. Get the collectors response in writing before you make a payment, to be sure you have proof of the arrangement in the event they don't follow through with their end of the bargain.
If you prefer to call the debt collector, you chance being recorded saying something that can be used against you in a judgement case. You'll want to get the agreement from the collector in writing anyway, so it's a good idea to do this in writing anyway.
Debt collectors do not have to remove accurate entries from your credit report, even if you offer a settlement, so not all debt collectors will agree to this scenario.
Second Best Scenario for You
There are a number of collectors who will hold out in hopes of getting the payment in full and will refuse to delete the account from your credit report in exchange for a settlement (less than amount owed) payment. If this is your situation, you'll have to offer to pay the full amount to get the collector to delete the account from your credit history report.
Not as Good, But Acceptable!
There are some collectors who simply refuse to remove an entry from your credit report, even when you've made payment. You would then want to get the collector to agree to update the notation to "Paid in Full"; whether you make a settlement payment or the full amount.
Unfortunately, a number of collectors won't report it as "paid in full" if you settle. If you get the debt collector to agree to a settlement payment, but not "paid in full", it would still be acceptable and better than your current situation to have the account reflect "Paid- Settled" on your credit report. It will not result in an instant, huge boost in your credit score, but it is certainly better than the situation you're in now (having the account in collections) and is the best alternative if you can't get it deleted or marked "Paid in full" for making a partial payment. (If you have the money to pay the account in full, do it because the notation on your credit report for an account paid in full is much better for you over the long term!)
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com
Use The Statute Of Limitations Of Debt To Your Advantage
Debt collectors do not have an indefinite period of time to continue trying to collect payments from old debts. There is an "expiration date", called the Statute of Limitations, that prevents debt collectors and/or the original lender, from pursuing you for the rest of your life on old debts. Before you go ahead and send in a payment on an old debt, check to be sure that the statute of limitations hasn't expired. If the expiration date has passed, you may be protected by law and not liable for that debt.
Use the Statute to your Advantage
The statute of limitations starts for the date of "last activity" on the account, as presented on your credit report. This is not always the last date of your payment. If you've communicated with the debt collector beyond the date you made the payment, and they've updated your credit report to show the new date as the date of last activity, the statute of limitations will start from that date.
Sometimes the statute of limitations has expired but debt collectors continue their attempts to collect because they hope the debtors do not know about the statute and that they'll pay with enough threats. If you are 100% certain the statute of limitations has expired, you can simply ignore them. If a lawsuit is brought against you, you'll have justification in that the time limit has expired for the collection of that debt.
If you enter a payment agreement, talk to the collectors or promise to make a payment; you will restart the statute of limitations to day one!
How Do You Know Your Statute of Limitations?
Each state has a different time period that collectors are allowed to pursue the collection of old debts. Check The Statute of Limitations on Debt for your states statute of limitations. Keep in mind if you move from one state to another, the debt collector may attempt to restart the statute of limitations for the new state; or extend the time period under the laws of the new state if they happen to be longer!
What the Statute of Limitations Can't Do For You
Many people think the statute of limitations is their free ticket out of repaying a debt. Unfortunately, while it can help it certainly is not the magic solution.
It cannot:
* Prevent the debt from being reported on a credit report. The reporting of bad debt follows the credit reporting time limit allowances, so even if the debt has passed the statute of limitations, it can appear for several more years and affect your credit score.
* Erase debt. If you really owe that amount, the statute of limitations doesn't indicate that you don't owe the debt.
* Prevent a debt collector from filing a lawsuit against you. They will not be able to win (in most cases!) if the statute of limitations has passed, but you may still have to go through the ordeal of a court case.
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com
Use the Statute to your Advantage
The statute of limitations starts for the date of "last activity" on the account, as presented on your credit report. This is not always the last date of your payment. If you've communicated with the debt collector beyond the date you made the payment, and they've updated your credit report to show the new date as the date of last activity, the statute of limitations will start from that date.
Sometimes the statute of limitations has expired but debt collectors continue their attempts to collect because they hope the debtors do not know about the statute and that they'll pay with enough threats. If you are 100% certain the statute of limitations has expired, you can simply ignore them. If a lawsuit is brought against you, you'll have justification in that the time limit has expired for the collection of that debt.
If you enter a payment agreement, talk to the collectors or promise to make a payment; you will restart the statute of limitations to day one!
How Do You Know Your Statute of Limitations?
Each state has a different time period that collectors are allowed to pursue the collection of old debts. Check The Statute of Limitations on Debt for your states statute of limitations. Keep in mind if you move from one state to another, the debt collector may attempt to restart the statute of limitations for the new state; or extend the time period under the laws of the new state if they happen to be longer!
What the Statute of Limitations Can't Do For You
Many people think the statute of limitations is their free ticket out of repaying a debt. Unfortunately, while it can help it certainly is not the magic solution.
It cannot:
* Prevent the debt from being reported on a credit report. The reporting of bad debt follows the credit reporting time limit allowances, so even if the debt has passed the statute of limitations, it can appear for several more years and affect your credit score.
* Erase debt. If you really owe that amount, the statute of limitations doesn't indicate that you don't owe the debt.
* Prevent a debt collector from filing a lawsuit against you. They will not be able to win (in most cases!) if the statute of limitations has passed, but you may still have to go through the ordeal of a court case.
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com
Sunday, February 17, 2008
What Will You Do With Your Rebate?
In 2001, the US economy had entered a recession and the government issued rebate checks to most people in hopes people would run out and spend them and help stimulate the economy. While the effectiveness of that move haven't been proven one way or another really, congress is currently looking to run a similar program in 2008. The House and Senate have each come up with different rebate plans that are currently under discussion:
The House would like to pass a plan that gives $600 to each individual or $1,200 to married couples with an additional $300 per child. The amount of rebates would be decreased for individuals who make more than $75,000 annually or for married couples earning more than $150,000 annually.
The Senate is working on a plan with slightly lower amounts, with $500 given to each individual and $1,000 provided to married couples. This plan also would provide an additional $300 per child. While the amounts are a bit lower in the Senate's version of the rebate plan, more people would qualify for the money. The money wouldn't start phasing out until income levels are about twice the House limitations; and the Senate's bill for the rebates would provide money to people on Social Security as well as our disabled veterans- people who wouldn't qualify under the House version of the bill.
Before the bill can be placed on President Bush's desk for his signature, the Senate and House need to agree on a compromised version to present. If approved by the President, it would be unlikely for the Internal Revenue Service to issue checks until at least mid-May- until after the rush of the tax season has ended.
In 2001, research teams tried to decide what kind of impact the tax rebates had by looking at changes in the government's Consumer Expenditure Survey. It seems that somewhere between 20 and 40% of the rebates were spent in the first three months of receiving it; with almost all of it spent within nine months of receiving it. In a separate study, it was found that credit card debt dropped considerably soon after households received their rebates- but within nine months it had risen again as people began putting new debts on their credit cards.
What's interesting is the number of companies that have been polling people to find out what they'll do with their rebates if they get them. The idea is to spend it and stimulate the economy of course, to help pull us out of what could be a bad recession; but the polls are finding that the majority of people are looking to pay off their existing debt with the rebates. In fact, depending on the site offering the polls, I saw responses as high as 51% claiming they would use the rebate to pay off credit card and other debts; as as many as 36% claiming they would invest it into long term savings options.
Of course, what people say they're going to do with their money and what they really do with it are often entirely different things. Have you ever planned to save a portion of your paycheck and gone out to dinner instead? Probably everyone has made the "wrong" decision with their money at least a few times in their lives, despite having the best of intentions.
The polls looked at are by no means done scientifically as they're just based on visitors to a particular website; but it's still interesting to see how many people hope to pay off debt with their rebates. What would you do with yours?
About the Author:
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com .
The House would like to pass a plan that gives $600 to each individual or $1,200 to married couples with an additional $300 per child. The amount of rebates would be decreased for individuals who make more than $75,000 annually or for married couples earning more than $150,000 annually.
The Senate is working on a plan with slightly lower amounts, with $500 given to each individual and $1,000 provided to married couples. This plan also would provide an additional $300 per child. While the amounts are a bit lower in the Senate's version of the rebate plan, more people would qualify for the money. The money wouldn't start phasing out until income levels are about twice the House limitations; and the Senate's bill for the rebates would provide money to people on Social Security as well as our disabled veterans- people who wouldn't qualify under the House version of the bill.
Before the bill can be placed on President Bush's desk for his signature, the Senate and House need to agree on a compromised version to present. If approved by the President, it would be unlikely for the Internal Revenue Service to issue checks until at least mid-May- until after the rush of the tax season has ended.
In 2001, research teams tried to decide what kind of impact the tax rebates had by looking at changes in the government's Consumer Expenditure Survey. It seems that somewhere between 20 and 40% of the rebates were spent in the first three months of receiving it; with almost all of it spent within nine months of receiving it. In a separate study, it was found that credit card debt dropped considerably soon after households received their rebates- but within nine months it had risen again as people began putting new debts on their credit cards.
What's interesting is the number of companies that have been polling people to find out what they'll do with their rebates if they get them. The idea is to spend it and stimulate the economy of course, to help pull us out of what could be a bad recession; but the polls are finding that the majority of people are looking to pay off their existing debt with the rebates. In fact, depending on the site offering the polls, I saw responses as high as 51% claiming they would use the rebate to pay off credit card and other debts; as as many as 36% claiming they would invest it into long term savings options.
Of course, what people say they're going to do with their money and what they really do with it are often entirely different things. Have you ever planned to save a portion of your paycheck and gone out to dinner instead? Probably everyone has made the "wrong" decision with their money at least a few times in their lives, despite having the best of intentions.
The polls looked at are by no means done scientifically as they're just based on visitors to a particular website; but it's still interesting to see how many people hope to pay off debt with their rebates. What would you do with yours?
About the Author:
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com .
Friday, December 14, 2007
Should You Get A Mortgage Now?
It's never a good sign when your home loan company files for bankruptcy. Sadly, that's just what's happening to many sub-prime mortgage lenders these days. Mortgage rates are low right now (about 5.5% - 6% for a 15-year fixed interest loan at the time of this writing), but the lenders who managed to stay afloat are tightening their lending guidelines. Should you get a mortgage while the housing market is so volatile?
Simply put, yes, you should get a mortgage if you're in a position to afford a house. But it's not that simple. Before you sign that dotted line, you need to consider some things.
First, do your research. Learn about mortgages and mortgage professionals. If you get a good offer, don't assume that it's the best you'll get. Shop around and compare offers. You might find that that initial offer wasn't as great as it seemed. Compare the terms you're offered to the current national mortgage rates. You can find these online at My FICO. By familiarizing yourself with what's out there and with what can be expected, you're protecting yourself from scams.
Mortgage scams are a problem, but they can be avoided. Just remember that mortgages that seem too good to be true probably are. The Mortgage Asset Research Institute reported that 26 states have "serious problems with mortgage fraud". Some tactics include pressuring home buyers to file quitclaim deeds; buying homes at low prices and re-selling them for profit through dishonest appraisals; and manipulating fees and penalties to re-classify performing loans as defaults.
When choosing who you'll do business with, be sure to select an established business with a good reputation. This doesn't necessarily mean that the largest lenders will give you the best terms; don't forget to look for local firms, too. Check them out online through the Better Business Bureau and Rip-off Report. Ask to speak with previous clients, or solicit opinions through online forums or classified ads. If you're very concerned, you can always hire a lawyer to represent your best interests.
Also, don't accept a variable-interest loan, or a mortgage with a low-interest introductory period. That period won't last forever, and your interest rates – and monthly payments – will likely soar when it's over. Look at how many homes have been foreclosed because buyers couldn't afford the payments after their interest reset at a higher rate. Carefully read everything you sign, and demand clarification for any vague or unspecified points. It wouldn't hurt to have an attorney look it over, too.
Finally, you should consider using a professional mortgage broker. As pros, they have the knowledge and resources to find great loans quickly and easily. Using a broker will cost you some up front money, but will save you time and stress.
We've all heard the myriad horror stories about families losing their homes, houses that were foreclosed and auctioned off for insultingly low prices. This should not scare you away from buying a home, but it should serve as a cautionary tale for anyone looking to secure a mortgage: take your time, and do your homework. If you get caught up in the dream of owning your own home, you're more prone to take the first good deal that comes along. Don't make yourself vulnerable to unscrupulous lenders. Instead, arm yourself with knowledge and keep your head about you. Taking your time to think things through could make all the difference.
About the Author:
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com/
Simply put, yes, you should get a mortgage if you're in a position to afford a house. But it's not that simple. Before you sign that dotted line, you need to consider some things.
First, do your research. Learn about mortgages and mortgage professionals. If you get a good offer, don't assume that it's the best you'll get. Shop around and compare offers. You might find that that initial offer wasn't as great as it seemed. Compare the terms you're offered to the current national mortgage rates. You can find these online at My FICO. By familiarizing yourself with what's out there and with what can be expected, you're protecting yourself from scams.
Mortgage scams are a problem, but they can be avoided. Just remember that mortgages that seem too good to be true probably are. The Mortgage Asset Research Institute reported that 26 states have "serious problems with mortgage fraud". Some tactics include pressuring home buyers to file quitclaim deeds; buying homes at low prices and re-selling them for profit through dishonest appraisals; and manipulating fees and penalties to re-classify performing loans as defaults.
When choosing who you'll do business with, be sure to select an established business with a good reputation. This doesn't necessarily mean that the largest lenders will give you the best terms; don't forget to look for local firms, too. Check them out online through the Better Business Bureau and Rip-off Report. Ask to speak with previous clients, or solicit opinions through online forums or classified ads. If you're very concerned, you can always hire a lawyer to represent your best interests.
Also, don't accept a variable-interest loan, or a mortgage with a low-interest introductory period. That period won't last forever, and your interest rates – and monthly payments – will likely soar when it's over. Look at how many homes have been foreclosed because buyers couldn't afford the payments after their interest reset at a higher rate. Carefully read everything you sign, and demand clarification for any vague or unspecified points. It wouldn't hurt to have an attorney look it over, too.
Finally, you should consider using a professional mortgage broker. As pros, they have the knowledge and resources to find great loans quickly and easily. Using a broker will cost you some up front money, but will save you time and stress.
We've all heard the myriad horror stories about families losing their homes, houses that were foreclosed and auctioned off for insultingly low prices. This should not scare you away from buying a home, but it should serve as a cautionary tale for anyone looking to secure a mortgage: take your time, and do your homework. If you get caught up in the dream of owning your own home, you're more prone to take the first good deal that comes along. Don't make yourself vulnerable to unscrupulous lenders. Instead, arm yourself with knowledge and keep your head about you. Taking your time to think things through could make all the difference.
About the Author:
This article has been provided courtesy of Destroy Debt, http://www.destroydebt.com/
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