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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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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5 Simple Ways To Reduce Debt Payments

5 Simple Ways To Reduce Debt Payments

How You Can Reduce Your Monthly Debt Payments An Advanced Strategy In Debt Reduction: These 5 simple steps to reduce debt are designed for those who are truly struggling with their unsecured debt. There are basic debt reduction steps you can take that are outlined here. The methods listed below are more of a last Hoorah! Before a complete debt settlement or bankruptcy decision is made. Please feel free to contact us if you’d like a free debt diagnosis to find out where you might stand and what your next move should be. Reducing monthly debt payments isn’t rocket science. All it takes is a little organization and determination on your part. If you find yourself struggling to make the minimum payments, and you’re continually watching your balance climb due to high interest rates, give at least one of these options a try. In most cases 2-3 of them will take a substantial load of your back and free you of the stress your unsecured debt has so kindly placed on you.   1. Transfer Credit Card Balances: This option may not be available for everyone, but if your credit is still in good shape there are plenty of offers out there for you. Most of the time you can get a balance transfer credit card at a rate much lower than your present credit card interest rate.  If you do your homework, you can find credit cards offering extremely low introductory APR’s on all credit card balance transfers. There are a few credit card programs left that even offer 0% introductory APR’s on balance transfers; utilizing this period to make interest free payments is extremely beneficial.   2. Negotiate Debts With Creditors: Again, this may or may not work depending on if you’re still current on your payments, and who your creditor is. Unfortunately most creditors are unwilling to negotiate if you’re still making your monthly payments on time. If you are current, and don’t want to “settle” your debt, call and talk to each individual creditor and let them know you’ve run into some sort of hardship. Make sure you’ve got all your facts and figures straight before making the call, this way you know exactly what you’re able to pay to them each month and what your current balances are. In some cases they may even reduce your APR in attempt to assist you. On the...

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Debt Settlement Information

Debt Settlement Information

Debt Settlement Programs That Work: Why Trusted Debt Settlement Programs Can Be Exactly What You Need In Your Life! Debt Settlement, also known as Debt Consolidation, is the process of paying less than is owed on credit cards and other unsecured debts, by negotiating with your creditors. Secured debts such as student loans, auto loans, and home mortgages unfortunately do not qualify for such programs. You will need to be in default on your current loans to utilize any debt settlement program and be able to gain the leverage needed to negotiate with your creditors. Typically, debts can be reduced by 40-70%.   Debt Settlement FAQ’s:   Does Debt Settlement Work?:   Yes! However, debt settlement isn’t for everyone. Debt settlement is designed for those who can no longer make their payments, already behind on their payments, or even considering bankruptcy. Debt settlement, when done properly, is a very safe alternative to bankruptcy. Debt settlement may not be an ideal option for those with very little debt. On average, a debt settlement client has $30,000 of unsecured debt.   Does Debt Settlement Hurt Your Credit?:   Debt Settlement is listed on your credit report, so yes, it will definitely impact your score. Debt settlement only works once you’ve been in default on your loans, because if you’re still current, creditors are unlikely to want to work and negotiate with you. Even though debt settlement can adversely affect your credit score, when compared to filing bankruptcy, debt settlement is far less detrimental to your score.   Is Debt Settlement Better Than Bankruptcy?:   Like we’ve discussed Bankruptcy, comparing debt settlement to bankruptcy, should be on a case by case basis. They both have their pro’s, and they both have their con’s. Bankruptcy will offer you legal protection under the court so that you don’t have to worry about being sued or harassed by creditors during the bankruptcy process. Debt settlement does not provide the guaranteed legal protection that bankruptcy does, however most reputable debt settlement companies will work to assist you in minimizing creditor calls and harassment where they’re able to.   Obviously there’s much to consider when deciding which route to take between bankruptcy and debt settlement. Our recommendation is to speak directly to a bankruptcy attorney to make sure you understand all the ins and outs of the process. This will help you make a more informed decision and...

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What Makes up a FICO Credit Score?

What Makes up a FICO Credit Score?

On our Credit Restoration page we outlined the categories used to derive a credit score.  To review, those categories are the following… Payment History – 35% Amount Owed – 30% History of Credit – 15% Inquiries – 10% Account Diversity – 10% Today we are going to take a deeper look inside each of these categories including a few credit building tips that will show you how to improve your credit score for FREE!  As always, if you are looking for assistance on how to repair your credit quickly, effectively and at a low cost, be sure to contact us. Payment History These factors make up 35% of the FICO score. Payment info on specific types of accounts (credit cards, installment loans, mortgage, etc.) Negative public records (bankruptcy, suits, liens, judgments, wage garnishments etc.) Collection items, and/or past due items Severity of delinquency (how long past due) $ past due on delinquent or collection accounts Recency of delinquency, public records and collection items. # of past due items on file Number of accounts paid as agreed   Amount Owed Debt amount makes up 30% of the score, and also impacts the debt-to-income (DTI) ratio another tool lenders use when qualifying a loan application. $ owed on accounts (including specific types) # of accounts with balances Lack of a specific type of balance, in some cases Credit Utilization Rate (CUR) – The percentage represented by the amount owed on an account divided by the credit limit of the same account.  This also applies at the aggregate level for all revolving lines of credit for a consumer.   Length of Credit History This is the part of your credit profile that you have no physical control over.  The sooner you establish good credit practices the better. How long accounts have been opened How long accounts have been opened (measured by specific type of account) Time since last account activity     Inquiries & New Credit Only 10% but the easiest to control Number of recent credit inquiries (all credit pulls within 30 days count as 1 – for rate shopping) Time since last credit inquiry (month-to-month) # of recently opened accounts (by amount & type) Time since recent account opening(s), (by type) Re-establishment of positive credit history following past payment problems     Account Diversity Account mix makes up 10% of the FICO score and acts as a mechanism to help prevent the manipulation of scores. myFico.com defines Account Diversity as… “Number...

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