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Taking Steps To Improve Your Credit Rating
Through Debt Consolidation and more...
Throughout this website you will find links to some of the best debt consolidation companies.
You will also be able to access various reports and articles the will help you understand things such as:
- Is getting debt consolidation loan a good thing?
- Where to get top consolidation loans
- Credit Card debt and how to reduce it
- Avoiding bankruptcy
- Obtaining your credit report and how to go about credit repair
- Credit counselors and counseling how do you find them?
- Is there a way you can lower your bills and clean up bad credit?
- Debt settlement can be a daunting task. How do you go about it?
Introduction
Americans, as well as many other nationalities are deep in debt and the problem is getting worse! Recent studies have shown that ninety percent of Americans have at least one credit card – and they are using that card – A LOT!
Click here to read our Introduction page
The average family carries a balance of between $7,000 and $10,000 on all their credit cards. Over $1,000 per family goes on interest every year.
And that’s just the average – some people owe much more!
How Do People Fall Into The Debt Trap?
First Things First - Your Credit Report
The very first step you need to take when trying to raise your credit score is to find out what your score is and what it means. Legislation called the FACT Act was passed that allows all Americans to get one free copy of their credit report every year. This report lists all of your debts you’ve had and your payment history on those debts.
Understanding your Credit Report
FICO and You
Back in the 1960’s, a company called Fair Isaac devised a unique system to determine the credit worthiness of people who apply for loans. Through a complicated mathematical computation (too complicated for this author!), they were able to study a person’s credit history and assign them a number that would represent how likely it was that they would be able to repay a loan they were applying for.
Fair Isaac sparked a revolution by pioneering credit risk scoring for the financial services industry. This new approach to lending enabled financial institutions to improve their business performance and expand consumers’ access to credit. Today Fair Isaac’s FICO score is widely recognized as the industry standard for lenders.
Understanding FICO
Finding Your Credit Score
You would think that finding out what your credit score is would be easy. In a way it is, but only because I’ve done my research and you won’t have to spend time surfing websites looking for the ever elusive credit number. It would seem logical to have your credit score appear right on your credit report, but that’s just not the way it is.
At one time, your credit score was a big secret known only to financial companies and banks. With the FACT Act, legislators decided that it was important for individuals to know not only what their personal credit scores are but how they are calculated and how to improve them.
Finding Out Your Credit Score
Establishing Good Credit
So you don’t have any credit to speak of, but you have big plans for the future. Maybe you’re a fresh college graduate or a young person eager to buy your first new car.
If you have never had to use credit before, first of all BRAVO! Of course, it’s best to pay cash for the things you need so that you don’t have to worry about credit card payments, loan payments, or interest rates.
But if you’re young, the chances of you needing credit in the future are very real. Someday you might want to buy a house. Perhaps you’ll want to buy a new car.
Establishing Good Credit
Repairing Your Credit Score
Don’t despair if you find yourself with a less than desirable credit score and credit history. You are human and can make mistakes. It’s natural. The key to this is recognize that your spending habits are out of control, your credit has been damaged, and then vow to never get yourself back in the same situation after you have gotten your credit repaired.
First, get your credit report. Get one from all three agencies. You get one free and then you’ll probably have to pay around $10 a piece for the other two. It’s important to get reports from all three agencies so that you have a full picture of your credit history.
Credit Score Repair
Bankruptcy
Filing for bankruptcy has a very negative connotation in society, but it’s a way for people who have found themselves in serious financial trouble to ease the burden of what they’ve done and allow them to start over. Businesses don’t like it, but for consumers, it can be a life saver.
Click here for more on Bankruptcy
Credit Counselors and Debt Consolidators
These companies have started popping up everywhere. In fact, as I am writing this book, there is a commercial on television for yet another credit counseling company. It seems like they are everywhere. It also seems like they can really help you with your debt problems. But can they?
There are some credit counseling agencies and debt consolidators that can actually help get people out of debt. But there are also others who are simply trying to get money (that you don’t have) without helping you at all.
There is a difference between these two types of companies. Credit counselors will help you get out of debt and stay out of debt. That means that they will help you realize where you went wrong on the financial road and then help you get out of debt. After that, they will put you on a budget and offer services that can help you stay out of debt and live a financially stable life.
Debt consolidation companies are different, though not entirely. They also will help you get out of debt, but they do so by working with your creditors to help combine all of your debts into one large debt with one monthly payment. That usually entails getting some type of loan on your behalf that will pay off your creditors and you will pay the loan company instead.
Credit Counselors & Debt Consolidators
Mistakes Can Be Made
Your credit report is very important to you as well as your credit score. Remember that people are human and the information contained in your credit report is entered in by human hands. Sometimes those hands make mistakes.
Maybe you paid off a past due bill and it’s still showing on your credit report as delinquent. There are all sorts of things that can be reflected incorrectly on your credit report, so it’s important that you take steps to make corrections as soon as you can.
The first thing you need to do is check over your report and dispute any old negative reports you can find. Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine."
The older and smaller a collection account, the more likely the collection agency won't bother to verify it when the credit bureau investigates your dispute. Some consumers also have had luck disputing old items with a lender that has merged with another company, which can leave lender records a real mess.
If there are significant errors on your credit report, you need to be sure and get them removed right away. However, there are also some mistakes that you can ignore and it won’t impact you negatively.
Identity Theft and Your Credit
Criminals know the way to steal your identity, and the worst part is that it’s not all that difficult. You know all those credit card applications you get in the mail? If you don’t shred them, they can use that to steal your identity.
It’s not above them to sift through garbage just to obtain a social security number or a driver’s license number. Once they have these vital bits of information, it’s easy for them to steal your identity.
What they will do is scary. They will apply for credit cards in your name and max them out within days. They will obtain loans in your name and never make a payment. Then the loan company comes after you for the money. It’s something that affects millions and millions of people each year and it can be a real mess when it comes to your credit report.
Identity Theft & Your Credit
Raising Your Credit Score
Let’s say you want to buy a house but your credit score is somewhere around 675 instead of 720 which will get you the best rate on a home loan. If you want to raise your credit score quickly, there are some steps you can take that can guarantee a great home loan or any other credit line for that matter.
The mantra for getting a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it. People who do that faithfully have very high scores. It usually means you're being conservative and cautious about credit. It's not a toy and it shouldn't be a hobby.
That's good advice, to be sure, but these actions take a long time. What if you're house hunting and you just need a few extra points to bump you over the line to the great rates? As we’ve said before, the first place to start is with your credit report. Check it over and find out what your credit score is right now.
You will want to concentrate mostly on correcting any errors by taking the steps we’ve outlined above. Look for errors such as accounts that aren't yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn't be reported any longer. Negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years.
Raising Your Credit Score
What Exactly is Debt?
Debt is simply the money you owe; it is an amount of money or other property that is owed by one person, organization or company. It is not the credit you owe as credit turn into debts. Getting into debt is very easy and maybe it is fun for some people as it might impress them.
As a first look, people are happy, they can buy without having cash, and they can afford to get a car even without having the budget etc. but they missed the best part, they will live and drive this car for 12 years to make payments and pay huge interests for what already impressed them!
Understanding Your Debt Position
Guide to Getting Rid of Your Debts
Are you drowning in debt? Or would you just like to be free of the debts you have?
This website will help you summarize your debts and create a Debt Reduction Plan that will show you how to pay off all your debts much sooner than you would by paying only the minimums.
Avoiding & Getting Out Of Debt
After reading this section, you will be able to reduce or eliminate your debts in as little time and/or with as little interest payment as possible. Believe it or not, you will succeed to let the dream come true.
Strategies For Getting Out Of Debt
Debts can also be classified as temporary or chronic debts.
In most cases, there are very good reasons to take on debt. For example, students take loans which are a good thing but we insist that you must know how to handle and pay off your debts after graduation.
More Debt-Help Tips
Also taking debts for setting up a business is good but it depends how the structure is going to be setup. You must have a clear plan, and know how much money you would need and the most important, how to pay it back. In such cases, debt is a part of the business success.
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