Credit Repair After The Holidays

Credit Repair After The Holidays

Credit Repair After Christmas The holidays are a wonderful time of the year filled with family time and joyful experiences.  They can also be a time when extended travel, purchasing gifts and other expenses can take a toll on debt loads and credit scores. Additionally, the holidays are also a notoriously popular time for credit card fraud, identity theft and other white collar crimes.  In this article we will cover some tips for how to stay within your limits this holiday season and also how to recover if you are a victim of a crime that impacts your credit score. Holiday Budgeting It can be easy to get carried away during the holiday season, maxing out credit cards and wearing savings thin to pay for extra travel expenses and to get the perfect gifts for your loved ones.  The following are some tips for keeping your financial standing upright leading into the New Year. Make a Budget – Set up a holiday financial plan that includes planned and unexpected expenses Be Frugal with Travel – Traveling during the holidays can be the most expensive time of the year.  Look for the best all inclusive deals or stay with relatives to keep costs down. Don’t Max Out Cards – Instead of maxing out one credit card use other options such as store lines of credit to level out the debt to income ratio   What to Do if Your Information Gets Stolen If you have your identity stolen or your credit card number used fraudulently during the holiday season, it can have a major impact on your credit score.  The first thing to do is close your credit cards and notify the bank of the situation.  The next thing you need to do is follow the steps for identity theft recovery.  Refer to our series of articles on Identity Theft for more help. After you have done this be sure to consult with credit repair specialist about restoring your score.  Reach out to an expert on our credit repair hotline when you are ready.  Call us...

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Secrets For Repairing Credit After Bankruptcy

Secrets For Repairing Credit After Bankruptcy

A Few Quick Tips for Rebuilding Credit Post BK Despite how overwhelming bankruptcy may be on your credit, there are a few lesser known secrets that can help you rebuild and quickly repair your credit score.  There is not an exact order in which these steps should be followed; however every single one of these actions will help improve your credit score.  Over time, with good borrowing and spending habits, it is possible to 100% recover from a bankruptcy filing regardless if it is chapter 7 or 13.   Open a Bank Account – Make Timely Payments This may seem very obvious; however you would be surprised how many individuals post-bankruptcy move to a “cash only” system.  While there is absolutely nothing wrong with this philosophy, if the goal is to rebuild credit, using cash only to make payments will not help the process. Regardless if it is a checking or savings account, opening a bank account and using it to pay bills will keep your payment history visible to creditors and lenders.  This is a good thing from a credit score standpoint.  Remember from What Makes Up a FICO Credit Score that payment history is the largest factor at 35% of the credit score.   Open Credit Cards (3 is Magic #) The ideal situation is to open credit cards right before or during bankruptcy because prior to the BK showing up on your credit report it will be easier to get approved for unsecured lines of credit.  However based on amount owed, this may not be possible.  Post-bankruptcy if you cannot get approved for any unsecured credit card, go with a secured credit card, a opposed to cash.  This is the type of card that requires you to deposit funds in an account to establish spending limits.  It may seem somewhat futile; however this goes a long way to helping show credit worthiness. Additionally it is better to have small balances on credit cards instead of having them maxed out or zero.  Also be careful when applying for multiple cards in a short period, as this will generate inquires which will actually negatively affect your credit. Become an Authorized User on a “Good Credit” Account This does not give you access to the funds on the account, however it does allow you to borrow the good credit of the account holder.  This is an easy one to do as long as you...

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A Quick Look at Credit Repair

A Quick Look at Credit Repair

Credit Repair – Legal For Every American Regardless if done independently or through a reputable company Credit Restoration also commonly referred to as Credit Repair is the process of removing incorrect or inaccurate items from an individual’s credit report. Credit repair can also encompass adding good credit items and building a positive credit profile. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) defines a “credit score” as the following… A numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default (and the numerical value or the categorization derived from such analysis may also be referred to as a ‘risk predictor’ or risk score.) The Fair Credit Reporting Act (FCRA) enacted in 1970 aimed at creating equality, precision and most importantly privacy of personal information. The concept was to curb the information reported to the credit bureaus by lenders, creditors and others. The FCRA affords the individual the ability to dispute items on his or her credit report. This is done on the basis of “completeness and accuracy” and includes all items that are inaccurate, untimely, misleading, biased, incomplete or unverifiable. If the credit bureaus cannot verify that the information is indeed correct, by law, those items must be removed. These unverifiable items on the credit report must be deleted within 30 days. This has been deemed as the investigation period or the “reasonable period of time” as designated by the law.   Credit Repair Basic Steps Obtain credit reports. Highlight items to dispute. Dispute items with credit bureaus. Repeat cycle as needed.   The concepts themselves are not that complicated; however, the legality and bureaucracy behind them are. Additionally, in today’s environment a certain degree of technology is helpful in expediting and making the process more efficient. Solid credit repair companies have state of the art technology and the understating of consumer laws to quickly and effectively dispute discrepant items on the consumer’s credit report. The best credit repair companies, and the only ones that we recommend, will not only help with step 3 (disputing), but will also guide the consumer through each step of the process. This includes helping consumers obtain free copies of their credit report.   What Service is Right For You? Depending on the credit repair service that is right for you,...

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Bankruptcy Overview

Bankruptcy Overview

Two Most Popular Forms of BK Explained Bankruptcy is a federal court proceeding that will help eliminate or payback debt. It is a legally declared or recognized condition of insolvency. Bankruptcy can be utilized by individuals, married couples or businesses that are unable to pay their debts. Bankruptcy is for people that have absolutely no other method of paying back monies owed, and to prove this must pass a means test. Bankruptcy is the solution and legal method designed to forgive debt.   Bankruptcy Filing Requirements…   Undergoing a “means” test. Receiving debt counseling from an approved organization. Submitting a repayment plan. Attending a meeting with creditors.   There are 4 forms of bankruptcy but the two most commonly used forms are Chapter 7 and Chapter 13.   Chapter 7 Chapter 7 bankruptcy is designed to payback the creditors with what you currently have and give you a new start. This will stop the harassment of creditor’s calls and put you on the track to a new financial future. To qualify for Chapter 7 a person must make less than the median income for their area of residence. If they make more than this they can still qualify but they will have to take the means test. The means test is to assess if you are able to pay back the creditors in five years or less. Chapter 7 allows the client the ability to keep some possessions called “Exempt Items.” An exempt item is an item that is not accounted for in the bankruptcy proceedings. While exempt items vary from state to state, generally in Chapter 7 exempt items are the same regardless of the residing state. These items typically include: the primary residence, one vehicle, personal items, retirement savings in pension funds, 401Ks and IRAs. Individuals will only be allowed to keep their home and vehicle if they can afford those payments after bankruptcy.   Chapter 13 Chapter 13 is commonly for “high” income earners with “less” debt and is called the wage-earners bankruptcy. For Chapter 13, you will repay what you owe the creditors, although generally not the full amount. The repayment amount will be carefully calculated. You will be responsible for gathering documents and collecting financial information for all your bills and debts. This information will determine how much you can afford to pay to the creditors without going back into debt. The plan payments...

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Debt Settlement in 279 Words

Debt Settlement in 279 Words

The Basics of Debt Settlement Explained If you are faced with massive debt, timely bill payment is difficult and you want to stop annoying and intruding collection calls, debt settlement may be a viable option. Also known as debt negotiation, debt settlement is a process by which your outstanding debt is typically settled for 40%-60% of the amount owed. By agreeing to this settled amount, the creditor or lender is forgiving the remaining debt, thereby helping the borrower or debtor get out of debt faster.   The 4 Basic Steps in Debt Settlement…   Client stops payment to creditors, and starts contributing to trust account. Collection calls are handled by the debt settlement representatives. Negotiation of debt happens a few months after program begins. Debt is lowered by 40%-60% in an overall shorter time period.   Brief History on Debt Settlement: Lenders have been practicing debt settlement concepts for hundreds of years. Creditors are usually willing to settle because it means that they will receive some amount of money owed as opposed to nothing or very little if the client files for bankruptcy. Debt settlement became prominent in America when bank deregulation during the late 80s made lending to consumers easier. This deregulation was followed by a recession which created financial hardships for consumers. As individual consumer debts increased, banks established debt settlement departments to negotiate with defaulted cardholders.   Changes to Bankruptcy Laws: Not only have personal debt loads raised but another under reported change in 2005 has driven the demand for debt settlement. Legislation now has made it more difficult for Americans to claim Chapter 7 bankruptcy. Currently anyone filing for bankruptcy will be required to meet IRS regulations or will be forced into Chapter 13 which is a debt restructuring plan....

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