There are countless tips, strategies, and tricks available to you when searching for Credit Repair. Here is another one…

When thinking paying off past charge off or collections accounts, keep in mind that may not be the best thing for your credit. The good thing is you’ll have a “paid” on that account on your credit report, but the account still says “paid collection” or “paid charge off” or several other similar terms, which is NOT what you want. Believe it or not, that’s still a negative on your account.

Follow me here, when you have any activity on your credit report, that particular activity usually does not “drop off” your report for 7 years (sometime 10 years depending on the situation). The 7 year clock, so to speak, begins at the point of the last activity on that particular account, not when the account was opened or placed in collection or charged off.

In other words, let’s say you have an account that has been charged off on your credit report. The account has had zero activity for 4 years. You’ve recently came into some money and you want to pay off all your past debt, which is a very noble thing to do. You think that by having a zero balance on that particular account, it will help your credit score. That’s not always true. Keep in mind, that creditor has already charged the account off. In their books, that debt is gone. The only record the account existed between you and the creditor is on your credit report.

You come along and pay that outstanding charged off account. The creditor says “thank you very much” and then the words “paid charge off” is applied to your credit report and that account stays on your credit report for another 7 years! Get it? The 7 years started over as soon as there was activity again on the account.

If your goal is to raise your credit score, paying off old charge off accounts may not be the way to do it. Again, it may be a noble thing to do, but do you still want it haunting you for another 7 years? Something to think about.

Continue reading this post…

I think at least once in every person’s life (except those lucky few that are financially endowed enough to avoid debt all together), they have to struggle with debt. For some, that means cutting back on their normal expenditures to make their monthly payments. For others in more financial hardship, it may mean finding another solution. There are many promising debt solutions in the world and one search through google will tell you that (currently returning 16,000,000 pages for “debt settlement”). However, before you decide which one is right for you, you should understand what each one has to offer and their disadvantages. This article discusses five different debt relief options and gives my opinion on why four of them are the absolute worst things you could do for you credit score.

Debt Counseling

Debt counseling is a service where individuals pay for advice on what to do with their current debt situation. They help you on your budget, tips on avoiding certain debt pitfalls, and even help you develop a long-term debt reduction plan. Sounds like a nice service, right? Well… yes and no. First of all, lets be honest with ourselves. Are we really in this situation because we really don’t know how to pay our debts back? My guess is no. More than likely it is either a) We simply cannot afford it at the time or b) We choose not to. Now, unless you are looking for an accountability buddy and want to pay up front and then again on the back end when your credit suffers than you may like this option. This is also a way for many credit card companies to disguise their collection techniques.

How does Debt Counseling effect your credit?

Where or not you are behind on your payments, this is reported to the credit agencies and demonstrates your inability to take care of your own affairs therefore effecting your credit worthiness for 7 to 10 years. In other words, it will go on your credit report that you needed an accountability buddy just to help make your payments and were willing to pay for that. If I were a lender, I would note this is a red flag and proceed with caution.

————————

Debt ConsolidationDebt consolidation is a very popular option for people struggling with debt. This is largely impart due to sneaky credit card companies and eager mortgage brokers. Both make it seem like you are getting a better deal than you really are. In some cases, you will be better off than before. Debt consolidation is when you take out a loan to cover your other loans and pay those off with this new loan. You then make one monthly payment on one loan at a fixed rate. Done on your own, this may be a good option for people with good enough credit to get a loan at the size they need. However, going through a consolidation firm can also have long-term effects on your credit.How does Debt Consolidation effect your credit?

Any time you take out a loan or spend money on a credit card, your credit score is going to initially suffer as your Debt-to-Income ratio will have gone up along with your risk grade. Furthermore, if you are using a debt consolidation agency, this is reported to the credit agencies as you were not able to handle your own affairs and will dramatically effect your credit worthiness. This also has a 7 to 10 year effect on your credit and does not save you any money. Additionally, many of the consolidation firms are nothing more than another way for credit card companies to disguise their attempts to collect.

————————

Filing for Bankruptcy

No matter what you have heard, this should only be considered as a last resort. If you can find another way out, pursue it because bankruptcy can ruin you. It is also much harder to file for with the modern laws and attorneys charge exuberant fees. There are two popular types of personal bankruptcy: Chapter 7 (liquidation) and Chapter 13 (reorganization).

Chapter 7 Bankruptcy is when much of your non-exempt property is sold to pay off as much of your debt as possible. This will essentially clear you of your unsecured debts. There are strict rules on who can qualify for Chapter 7.

Chapter 13 Bankruptcy is also called “wage-earner” bankruptcy. It is when you submit a new payoff plan for your current debts to be paid off over the next 3 – 5 years.

How does Bankruptcy effect your credit?The fact that you filed for bankruptcy will be on your credit for 7 to 10 years and will demonstrate that you are not credit worthy. Most lenders are not compensated fully for loans that were settled through bankruptcy and therefore are very cautious about lending to anyone that has a bankruptcy on their credit report. Also, most applications for any type of credit ask if you have ever filed for bankruptcy and no doubt consider that in their decision.————————

Doing Nothing

Although it may seem obvious, many people choose this option. By doing nothing you will undoubtedly be drowning in debt and destroy your credit. You will be harassed by debt collectors and possibly sued. Eventually, you will end up choosing one of these debt relief programs or risk losing everything.

————————-

So what is a better option? – Debt Settlement

Debt settlement also called debt negotiation is not the best option for everyone. If you are already making your payments on time and can continue to do so then that is your best option. Debt settlement is the process by which a debt settlement agency negotiates with your creditors to lower the overall debt amount and in return pay the new amount as a lump sum. This can save you 50-60% up front plus the interest you don’t have to pay. Debt settlement will not be a gold star on your credit report. However, it does have several advantages. You will save a significant amount of money as the whole point of debt negotiation is to lower your overall debt.

How does Debt Settlement effect your credit?While you are in the Debt Settlement Program your credit score will suffer because you will not be making your normal monthly payments (if you were then the creditors have no reason to negotiate with you). However, after you have paid off your creditors depending on the company your credit report may show “paid-in-full” or “settled”. Neither have much effect anymore in the lending world but it is always better to have it say “paid-in-full” and it is especially good when there is no sign of 3rd party help. There are some debt settlement companies out there that do not report to the credit bureaus allowing you the best chance to re-establish your credit. Because of this, you can have your credit back in good shape within 6 – 18 months.Learn more about debt settlement.

Continue reading this post…

A new and magical world opens up when a person hits his or her eighteenth birthday. Voting is just one of the many privileges extended to the new adult. There is also the ability to serve in the Armed Forces.

But nothing quite marks the end of childhood as leaving the comforts of high school and bravely entering the collegiate world. College is a world of new possibilities but also a time of great responsibility. It is easy to get in over your head when student credit cards are being offered every few steps at college fairs.

Credit card credit is a delicate balancing act that new adults must juggle. They want to begin building their credit rating but often find that those visa ones they took out to finance their books, meals and rent are now completely out of control.

Student credit card debt is no laughing matter. Before long the bills are too much for the student to pay each month and he or she must start looking at alternative means to finance their monthly expenses. This may mean a college loan or finding a part time job.

College is expensive and unforeseen expenses can occur. Student credit cards are very easily obtained but can often lead to bigger problems than they solve. The key is to use your new-found credit wisely.

Use it for true emergencies and always limit yourself on how much you will charge onto the cards. Think about each purchase carefully and always remember that you will have to pay it all back, plus interest.

Another tactic is to purchase an item and pay it off, thus building your credit rating. Always make sure and pay the bill on time and never pay just the minimum payment. This will help you stay ahead of your debt and make it more manageable in the long run.

You will not always be living in a dorm or renting a house. You want to be able to someday own your own home and this is a way to show financial restraint.

Credit counseling is a great way to fully understand what those student credit cards can do to your finances. Keep in mind that you will not always be in school and that credit card bills on top of student loan payments, can quickly eat up your budget. Build credit slowly and always be responsible for your purchases. Eventually your credit score will improve and you will be able to buy the things you have always wanted.

Continue reading this post…

The usage of plastic money has increased by many folds during the past few years. Without any requirement of hard cash it provides swift and hassle free transaction. Besides, there is no bar in using the card as you can access anything by swapping it. But now it is turning out to be a source of huge high interest debts for the users. It is due to relentless use of multiple cards for any kind of transaction. However with the help of credit card debt management you can aptly fix the problems.

One chief reason for the high interest debts is the excessive use of credit cards. If somehow you can stop the usage of credit cards it will prevent you from further incurring debts. The process of managing the debts requires a lot of discipline from your side as you are the one who will benefit from the process.

This program also shows you how to merge all the existing pending debts in to a single amount and pay it off with the help of debt consolidation loans. These loans are offered to you at very low interest rate which helps you a lot while repaying the entire loan. Now your situation is far more balanced as you are required to pay a single monthly installment at a single interest than paying multiple payments to multiple creditors. The loans are offered to you in two regular formats i.e. secured and unsecured format. Secured format of the loan offers a bigger amount at very low interest rate because of the collateral. On the other hand unsecured option of the loans can be accessed without any collateral.

If there is any confusion regarding managing the debts, there are financial experts who will assist you to solve the debt related issues. Moreover by using the online option you will be able to access a lot of information regarding tips, loans etc at the tip of your finger without too many hassles.

Credit card debt management is a way through which you can handle all the debt related issues. With a thorough action plan laced with practical policies you can easily finish all the debt related to cards. By adhering to these principles you can easily become debt free.

Continue reading this post…

As a consumer there are various different ways in which you can shop on credit. Store cards, credit cards, hire-purchase agreements and catalogues are the most prevalent means of the buy now, pay later culture, but keeping on top of these recurring bills can prove problematic, even for the best of us. When shopping on credit it is important to always bear in mind that you shouldn’t buy what you can’t afford, and remember buying on credit will always mean interest added.

Whenever you’re buying on credit, the first thing you should think is that you will ultimately have to pay it back. Credit bills won’t just go away. If you’re not earning, you shouldn’t be spending, and you should certainly not consider it as an extension of your wealth. By treating your credit as a loan, you should find that it becomes less appealing. Try to think about how you are going to pay off the bill when it comes around, and you shouldn’t think that by putting off payment, you’ll come up with a solution to your financial problems.

A good tip for credit bills is to pay off as much as you can afford, rather than the minimum required. By paying only the minimum, you are leaving a larger balance for longer, which will incur more interest, which will of course have to be paid in the long run. Paying the minimum might help the cash flow in the interim, but it will ultimately be a more expensive way to pay off your bill. Don’t be fooled by the requests for lower amounts. Pay as much as you can safely afford which will keep your credit card cheap.

If you’ve got a credit card, you should never withdraw money from a cash machine if you can help it. Withdrawals in cash from the machine can often incur a percentage convenience charge, or this may even be a flat rate, which can be quite significant.

Credit can be a real advantage to any consumer, and we all need a hand from time to time when we find ourselves in a tight spot. By using it carefully, sparingly, and safely, it can be a real hand, and can actually be very beneficial. However, rash spending and unconscious card management can lead to severe problems, and it is crucial that you remember these salient points when dealing with your credit allowances.

Continue reading this post…