It is a big mistake to think that simply making a request for your credit report will hurt your score.

Basic inquires have a small impact

Credit agencies consider inquiries carefully because not all inquiries are related to credit risk.

If you are looking for a new car and the dealership requests a report, for most people, this will have a minimal negative effect of about minus 5 points.

But if you are request additional credit all over town like:

• Loan companies
• Store cards
• Credit cards

... this may indicate greater risk and hurt your score.

Studies have show that people with six or more inquiries on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries.

 Some inquiries are ignored

1)  Your score is not affected if you order a credit report for yourself.

You are entitled to one FREE credit report each year from each of the big three reporting agencies:

• Experian
• Equifax
• TransUnion

This WILL NOT hurt your score!

2) If a lender (credit card company for instance) makes a request for your credit report in order to see if you qualify for a "pre-approved" credit offer, it WILL NOT hurt your credit score.

3)  If an employer (or in the last few years, an insurance company) makes a request for your credit report, this WILL NOT hurt your score.

Multiple inquiries or "rate shopping" is not counted as a negative on your credit score

When looking for a mortgage, student loan or an auto loan, you will most likely want to check with several lenders to get the best rate.

Of course, this will cause multiple lenders to make inquiries for your credit report, but the credit reporting agencies make a distinction between a search for a single loan and a search for many new credit cards or loans!

But, if you are shopping for the best rate for a car, student or home loan, you should do so in a short period of time, say two weeks or less to avoid the appearance of trying to get too much credit too fast!

If your credit score is too low to qualify for the loan you are seeking, DON'T CLOSE DOWN OLD ACCOUNTS!

It is a mistake to think that closing accounts will help, when actually it can hurt your credit score!

Late payments or accounts that have been charged off won't disappear from your credit report just because you closed them.

BEWARE OF FALSE CLAIMS BY CREDIT REPAIR COMPANIES!

Long established accounts are a positive factor of your credit score because it shows you manage credit well.  Don't close these down!

Having available credit that you don't use DOES NOT LOWER your score.  You may have other reasons for closing down old accounts, but don't do it thinking it will improve your score.

If you have too much credit and are having a difficult time keeping up, there are several programs that can help you eliminate the debt and improve your score!

Why not request a FREE CREDIT ANALYSIS.

Got Questions? We've Got Answers

1-877-492-4109

photo by: Kristian D.

WHAT IS A CREDIT SCORE?

It is more like a "snapshot" rather than a "video".

When you apply for a credit card, auto loan, mortgage, or other forms of credit, the lender will request a credit report from one or more of the three major reporting agencies:

Experian

P.O. Box 2002    Allen, TX 75013     (888) 397-3742

Equifax

P.O. Box 740241   Atlanta, GA 30374  (800) 685-1111

TransUnion

P.O. Box 1000   Chester, PA 19022   (800) 888-4213

Even though the three reporting agencies above provide scores to lenders, approximately 90% come from FICO (Fair Isaac Corporation).

A credit report is basically an evaluation of your credit risk.

In other words, if the lender lends you money (makes a loan or issues a credit card), what is the likelihood that you will repay.  By comparing information from hundreds of thousands of past of past credit reports, the credit score estimates your level of risk.

Obviously, the higher the score, the lower the risk to the lender.

Different lenders interpret credit scores and reports differently, so you may have a score that is not the highest, and yet because of several factors such as:

• Payment History
• Amounts you currently owe
• Length of Credit History
• New Credit
• Types of Credit

That creditor may go ahead and aprove you.

If you  have negative items or errors on your report, you can make a request to the agency to remove those items.

If you have charged off accounts or accounts in collections, you may need to consider a Debt Management or Debt Settlement program to help take care of these.

BEWARE OF CREDIT REPAIR COMPANIES!!!

No company can remove negative items on a report unless those items have been legitimately taken care of.

Click here more receive FREE INFORMATION.

photo by: tj sceneshttp://www.flickr.com/photos/uncut/

The FICO score is the best-known and most widely used credit score in the United States.  Creditors use your FICO score to determine your eligibility for loans, credit cards and other types of credit.  Employers will often request your credit score to ascertain how reliable an employee you might be, should they decide to hire you.

Your FICO credit score contains a host of broad information about your financial life, including your credit history, payment history, the amounts you owe, the length of your credit history, any new lines of credit you’ve recently opened and the types of credit you have used. However, there are many things that are not reflected in your FICO score.

Here are nine things your creditors will not find when pulling your FICO credit score.

1. Your FICO score contains no mention of race, color, religion, national origin, sex or marital status.  Federal law prohibits credit scoring from considering any information of this type. The law also prohibits consideration of any receipt of public assistance, and any mention of rights you have exercised under the Consumer Credit Protection Act.

2. The FICO score does not reflect your age.

3. You FICO score will not mention your salary, occupation, title, employer, date employed or your employment history. Lenders may consider this information looking at your credit report however, as they compare your current salary against your level of debt, to decide whether or not you’ll be able to afford extra payments.

4. You FICO score gives no consideration to where you live.

5. Your FICO score will not consider any particular interest rate being charged on any particular card or account.  So if you find yourself paying a 400% interest rate, it’s no different to the 4% interest rate you also have.

6. The FICO score does not reflect any items reported as child or family support obligations, or any rental agreements.

7. Your FICO will not reflect requests for your credit report. 

8. There are certain types of inquiries the FICO score does not consider. The FICO score does not count any inquiries initiated by the consumer, such as any times you’ve requested your credit report in order to check its accuracy. Any inquiries made by a creditor to pre-approve you (also known as promotional inquiries) are not counted. Also, whenever one of your creditors requests your report to review an account you have with them (also known as administrative inquiries), such requests are not counted. Finally, should a request come from an employer, such requests are not considered.

9. Your FICO score will not mention if you are obtaining credit counseling of any kind.

So, rest assured that your FICO score does not contain irrelevant or discriminatory information. And now that you know what it does contain, you can start working to boost your score: bring down credit card balances, and make payments on time. A better score will be reflected with lower interest rates on loans and credit cards, and that means more money in your pocket.

The most important thing you can do to IMPROVE YOUR CREDIT SCORE is to eliminate debt!

One of our customers resently sent us an email stating:

"My credit score according to my credit tracker just JUMPED to 693! That's the highest it has been in fifteen years."

This client had just completed the DEBT SETTLEMENT program, and his credit report showed all of his accounts had ZERO BALANCE! 

According to the FICO, there are several factors that determine your credit score:

PAYMENT HISTORY

This makes up 35% of your score and is determined by:

• Past due accounts
• Bankruptcies
• Judgments
• Wage garnishments
• Paid as agreed accounts

AMOUNTS YOU OWE

This will account for at least 30% of your credit score and includes:

• The total amount you owe on all of your accounts

• The number of accounts you have opened with outstanding balances.  (Too many accounts hurts your score, so be careful when offered the next STORE CARD!)

LENGTH OF CREDIT HISTORY

• If you have established a decent credit score for several years, you will be rated higher than someone with little or no credit history. 

• If you have not established credit (credit card, auto loan, home loan), then you should consider opening a couple of accounts.

BE CAREFUL!  Many people get caught up in the nightmare of too many credit cards and not enough money to keep up.  The best way to start establishing your credit history is to open ONE CARD, use it wisely, and pay it off each month!

Your are  proving that you have the ability and discipline to manage your credit and will be rewarded with a higher score in the future.

NEW CREDIT

This goes with the previous category, but is a little different and makes up 10% of your credit score.

If you open too many accounts in a short period of time, this is seen as a negative on your report, so take it easy! Also, if there are several inquiries about your credit score in a short amount of tim, this will hurt your credit score.

On the other hand, if a creditor inquires about your credit in order to offer you a "pre-approved" card, this will not hurt your credit.

Too learn more about how inquiries affects your score, click here.

TYPES OF CREDIT USED

This accounts for 10% of your score.

• Having too many store cards and "easier-to-get" credit cards will hurt your score.

• If you have a home mortgage and have a good payment history, this will be a positive for your credit score.

The best way to improve your credit score is to eliminate debt!

If you would like to find out what options are available to you, we can help!

1-877-492-4109

Yesterday I discussed the first step of how to Get Out of Debt FAST: Get to Know Your Debt. Now you are ready for part 2:

Create a Plan to Pay Off Your Debt

Having written down all your debts, it’s now time to determine how you will go about paying off these bills. A solid plan should not be complicated. It’s simply your approach to tackling your debt. There are, however, some important considerations and tools that can help you develop an effective debt repayment plan:

1. Debt Repayment Calculator: As a starting point, it’s helpful (and sometimes painful) to see how long it will take you to pay off your debt if you make just the minimum payments. And there is a free debt repayment calculator that is very easy to use. While the plan will involve making extra payments, the starting point is to understand what you are up against making just the minimum payments on your debt, and this calculator will help you do just that.
2. Prepare a Budget: For many, the word “budget” is the dreaded “B” word. But the fact is that you need a budget to control your spending and better manage your money. Remember that it’s the money you don’t spend each month that will go toward paying down your debt.

3.  Be Aggressive About Paying Off Debt: Dave Ramsey talks about tackling debt with “gazelle” intensity. It’s about being aggressive in paying off your debt. As you work through your budget, recognize that every dollar counts, and that the more you throw at your debt, the less interest you’ll pay and the faster you’ll get out of debt.  

4.  Be Realistic About Paying Off Debt: Paying off debt is a lot like going on a diet. You can commit to never eating foods that are bad for you, but is that realistic? The same is true with debt. Yes, sacrifices will have to be made to meet your financial goals, but you need balance.  

5.  Order Your Debt: With your budget in place and an understanding of how much extra money you can put towards debt, it’s now time to map out a specific plan. The question is this–which debt will you put your extra money toward first? That said, here are the top three approaches to deciding how to tackle your debt:

• Highest Interest Rate First: With this approach, you put all the extra cash you have on the debt that has the highest interest rate. This approach will result in the lowest interest charges and the fastest debt repayment possible.

• Smallest Balance First: This is the Debt Snowball approach. He suggests targeting the debt with the smallest balance first. While that debt may not have the highest interest rate, the theory is to get one debt paid off as fast as possible. The rationale is twofold. First, paying off a debt gives you a feeling of accomplishment, which may be just the motivation you need to keep on track. Second, by paying of a debt completely, you free up the cash that was needed to make monthly payments to that bill. While you are likely to put that cash to the next debt, in an emergency, you could use it for other purposes. In other words, by paying the smallest debt first, you free up cashflow.

• Non-Revolving Debt First: While many talk about the two approaches above, few look at the type of debt when deciding which one to pay first. Recall that revolving debt, like credit cards, allows you to borrow again after you’ve paid down the debt. Non-revolving debt, like a car or school loan, does not permit you to borrow again as you pay down the debt. With a car loan, once the debt is paid, the loan is gone. With a credit card, once the debt is paid, the card is still there to use again if you so chose. For this reason, I’ll often focus on non-revolving debt first. Why? Because I can’t go out and charge up the debt again once it’s paid. This is purely a pyschological issue, but an important one, particularly if you fear you may lack some discipline once some of your debt is paid off.

6.  Don’t Forget Your Emergency Fund: An emergency fund is a really important part of a debt elimination program. While you may be tempted to put 100% of your extra cash toward debt, keeping at least some of it aside for emergencies will help break the reliance many have on credit.  

Check back in tomorrow for Tips to Get Out of Debt FAST: part 3

Do you want to Get Out of Debt FAST?

Here is one of the most frequently asked questions we get: “How do I get out of debt?” The answer if pretty basic. Eliminating debt is about following a few simple steps:

1. Stop going into more debt
2. Spend less than you make
3. Pay off your debt with the difference

This sounds simple enough, but the problem is that following these steps isn’t always so easy.

In fact, tackling your debt may be one of the hardest things you’ll ever do. You have to control your emotions. You have to educate yourself about everything from home loans to credit cards to credit scores. And you have to discipline yourself in the way you manage and spend money. The fact is that controlling your spending and paying off your debt is not an easy thing to do. But the good news is that you can do it. If you want to be debt-free bad enough, you can make it happen.

And to help you reach your goal of being debt-free, I’ve assembled a list of tips to GET OUT OF DEBT FAST.

Part One: Get to Know Your Debt

The first step in tackling any problem is to fully understand it. When it comes to debt, you should know everything about the terms and conditions of the money you owe. Here are some tips and tools to help you understand your debt.

1. Put Your Debt On Paper: The very first step is make a list of the debts you have. The list should include the following information: The name, address and phone number of the creditor; the outstanding balance; the interest rate; the minimum payment; and any other information you feel is important.
2. Take Advantage of Personal Finance Software: By now many people already have and use personal finance software like Quicken or YNAB (You Need a Budget). If so, you can use the tools within the software to record all of the debt you owe and to develop a plan to pay off that debt.
3. Use Free Online Tools: There are many budget tools available online for free. These tools can track your debt and are easy to use. And it’s hard to beat free!
4. Involve Others: It’s important that your spouse or significant other is involved in the process. If you don’t see eye-to-eye on finances, it can make getting out of debt even more difficult than it already is. It’s not uncommon for one spouse to take the lead in handling finances, and that’s fine. But you both should be on board, particularly as you develop a plan to tackle the debt.

Getting to know your debt is just the first step you need to take to get out of debt fast.  Check in tomorrow for the next step...Create a Plan.

Got Questions? We've Got Answers

1-877-492-4109

photo by: alancleaver2000

Too much DEBT = Too much Stress

Here are 3 Tips on how to cope with DEBT and STRESS:

FIRST: FIND OUT EXACTLY WHERE YOU STAND FINANCIALLY

It may sound like a useless exercise, but believe me, the unknown is usually not as bad as you think it is.

When stress, panic, fear, whatever you call it takes over, your mind has a way of making the situation seem bigger than it really is and impossible to correct. DON'T BELIEVE IT!  Someone once said that FEAR is:

 False Evidence that Appears Real

It's time to face your F.E.A.R and find out what your reality is.  A Basic Budget can be very helpful.  Don't forget to include all of the miscellaneous items like:

• Starbucks
• McDonalds
• Movie Rentals

Those small items may seem insignificant, but they can really add up to a big chunk of your monthly budget!

SECOND: SEE IF YOU CAN FIND 3-4 EXPENDITURES THAT YOU COULD LIVE WITHOUT!

If you are $200-$300 a month short and the stress is overwhelming, could you do without (or at least cut back on):

$4.00 Latte x 5 days x 4 weeks = $80/month

$6.00 Lunch x 5 days x 4 weeks = $120/month

                                      $4.00 Movie Rental x 2 days x 4 weeks = $32

That's over $200 saved!  Could you cut back on your cable bill by eliminating some movie chanels and getting Netflix instead?  What about canceling that gym membership and walking your dog instead?  Just be creative.  There are many small ways to cut back that add upt to BIG TIME MONEY SAVED!

Remember, is the stress of "living without" a couple of things worth minimizing the stress of going deeper and deeper in debt?

THIRD: It's time to get some advise on how to deal with your debt! 

Debt Management and Debt Settlement are two programs that can:

• Stop collection calls
• Reduce you total monthly debt payment
• Lower or eliminate interest rates and late fees
• Help you become DEBT FREE in 24-48 months

REMEMBER:

• Your mind will make the problem seem greater than it really is
• There is always a solution
• It's time to TAKE ACTION

Before you attempt DO IT YOURSELF DEBT SETTLEMENT, you may want to consider what's involved.

After many years of negotiating debts for our clients, I'd have to say for the average person trying to settle debts yourself is too hard.

That's not to say that you may not be able to do it yourself, but you need to understand how the process works and how the collection agents are professionally trained to get as much money out of you as possible.

For this discussion, let's talk about unsecured debts and mainly credit cards.

If you fail to make minimum payments on time, what happens?

1.  Your next statement will show an additional LATE FEE of say $35 added to the balance.  Now your minimum payment is last month's plus this month's plus the $35 late fee, and you can't afford it.

2.  You will now most likely get a DEMAND LETTER that says your account is now DELIENQUENT and demand 3 payments plus 2 late fees. Of course by now, you really cannot afford to pay.

3.  The PHONE CALLS START! Your account is transferred to the creditors internal RECOVERY DEPARTMENT or basically their collections department.

The caller may be nice or very demanding, depending on the company.

You can and should explain your circumstances, but they are usually not very sympathetic!

4. At this point (about 3-4 months delinquent) the creditor is not ready to accept a settlement for less than the entire amount including late fees and additional interest.

Oh, by-the-way, your interest rate has been increased.  There is small print on the back of the application you signed that basically states that if you fail to make payments on time, they can INCREASE YOUR INTEREST RATE.

Although the Credit Card Act of 2009 limited the UNIVERSAL DEFAULT method of increasing rates, creditors can still:

• Increase rates
• Charge late fees
• Charge over-the-limit fees
• Charge annual fees

5.  Just before the account is set to CHARGE OFF, you may get a letter from the creditor offering a settlement. 

The settlement offer may let you have 3 OPTIONS:

1. Pay 65% of the amount due by the end of the month
2. Pay 75% of the amount due over 6 months
3. Pay 85% of the amount due over 12 months

You do the math! Not gonna happen!

SO NOW WHAT???

This is where "Do it yourself debt settlement" gets hard.

By now, you have been getting phone calls several times a day and possibly even at work!

The creditors may even be calling your friends and family!

There are legal ways to stop the calls.   FREE INFORMATION

The account has now been CHARGED OFF and sent to a collection agency. 

Now you starting getting calls and letters from the COLLECTION AGENCY, even though you sent out letters to the original creditor!

If the collectin agency finds out that you have a job, they may decide to FILE A COMPLAINT in your local courthouse.

You will now receive a SUMMONS that states the situation and that you have 20 or 30 days to "answer" or "contest" that you owe the debt.  But, since you owe the debt, that would be a waste of time and money (yes, is costs to file an "answer").

If you call the collection agency or attorney for the creditor, you may be able to negotiate an agreement whereby they stop legal action and if you repay 100% of the debt plus attorney fees and court costs!

If not, they will set a court date and win a JUDGMENT by DEFAULT.

With the default judgment, they can apply for a WRIT OF GARNISHMENT that your employer has no choice but to honor.

In most states, the amount that a creditor can garnish is 25% of your net (after tax) income.

Let's say you earn $$3,000 per month and 30% is withheld for taxes, etc. That leaves $2,100 after-tax income.

At 25% of $2,100, they would deduct $525 each month until the entire debt is repaid!  COULD YOU SURVIVE ON $1,575?

Not hardly, so you would probably end up agreeing to a STIPULATED AGREEMENT that would let you repay the entire amount at maybe $200/month at a reduced interest rate (each state is different).

Can a Debt Settlement Company do any better?

In most cases, yes.  Do It Yourself Debt Settlement takes a lot of time and if you are not trained in dealing with collectors and attorneys, you may end up paying too much or possibly being forced into bankruptcy.

Why not explore your options by requesting a

FREE CONSULTAION

Or Simply Give us a Call

1-877-492-4109

photo by: Henrique Vincente

Top 10 Things You Should Know about CONTROLLING YOUR DEBT!

#1 Americans are loaded with credit-card debt.

The average American household with at least one credit card has nearly $11,000 in credit-card debt, and the average interest rate runs in the mid to high teens at any given time.

#2 Some debt is good.

Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates.

#3 Some debt is bad.

Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there's something you really want, but it's expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it's due and avoid interest charges.

#4 Get a handle on your spending.

Most people spend thousands of dollars without much thought to what they're buying. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or use it to reduce your debt more quickly.

#5 Pay off your highest-rate debts first.

The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on. Another option is to use the Debt Snowball.  This system focuses on paying off the smallest balances first. Either way, make a plan and stick to it.

#6 Don't fall into the minimum trap.

If you just pay the minimum due on credit-card bills, you'll barely cover the interest you owe, to say nothing of the principal. It will take you years to pay off your balance, and potentially you'll end up spending almost three times what you orriginally charged.

#7 Watch where you borrow.

It may be convenient to borrow against your home or your 401(k) to pay off debt, but it can be dangerous. You could lose your home or fall short of your investing goals at retirement.

#8 Expect the unexpected.

Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don't have an emergency fund, a broken furnace or damaged car can seriously upset your finances.

#9 Don't be so quick to pay down your mortgage.

Don't pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)

#10 Get help as soon as you need it.

If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances.

NEED HELP NOW? 

Call 1-877-492-4109 Today!

STOP! Don't make these mistakes dealing with collectors!  

Dealing with debt collectors rarely is a pleasant activity. They call you up at all hours of the night, send you nasty letters and make your life a living nightmare. Bad as it may seem, you can only make it worse by making one or more of these mistakes:

1. Lying: If you lie and you're caught in the lie, you can be sued.

2. Paying without receiving a confirmation letter: If you pay the debt, make sure you get confirmation that the account is closed. Also, check your credit report two months later to see that the line on your credit report shows "closed" or "settled" or "paid as agreed."

3. Failing to dispute a charge in a timely matter: If you believe you have been wronged, you must file the proper claim as soon as possible. The statute of limitations is very specific depending on your state; if you wait too long, you could lose your legal right to dispute the claim.

4. Ignoring the situation: If the collection agency has a legitimate claim against you, especially if it knows you have a job, things can only get worse, not better. Talk to an experienced Solutions Specialist to start investigating your options.

5. Bouncing checks: This will get your case sent immediately to the creditor's legal department.

6. Becoming intimidated: In the words of Eleanor Roosevelt, "No one can make you feel inferior without your consent." Don't let the collection person bully you around. The FDCPA states very clearly what a debt collector can and cannot do.

7. Letting the creditor or collector deduct money directly from your bank account: Never give the creditor your checking account number.

8. Making promises you cannot keep: Sometimes you will be tempted to just say, "The check is in the mail." But when the check doesn't arrive, they'll call even more frequently. They may even try to sue you for lying.

9. Avoiding the calls: They will only occur more frequently. You can stop the calls by taking a few simple steps.  

photo by: Qfamily