Bankrate.com lists the 12 most common myths about filing for banruptcy. If you are considering bankruptcy as a financial option, you may want to check this out.
From Bankrate.com: 12 myths about bankruptcy
Like most big, bad scary things, bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment. It’s not nearly as frightening once you know the truth.
(This article is continued at Bankrate.com…)
]]>Liz Pulliam Weston outlines steps toward getting a “killer” credit score.
From MSN’s Money Central: 9 ways to build a killer credit score
It’s not just that you’ll need good credit to get decent rates when you’re ready to buy a home or a car. Your credit history can determine whether you get a good job, a decent apartment or reasonable rates on insurance. One seemingly minor misstep — a late payment, maxing out your credit cards, applying for too much credit at once — can haunt you for years.
(This article is continued at MSN Money Central…)
]]>Do you have bad credit? This can affect your life negatively because, basically, you need to have good credit to receive more good credit. You might be applying for a credit card, attempting to secure a loan, or trying to purchase kitchen appliances, a car or a house - all these transactions require you to have good credit. People differ in their need for bad credit help. Some people require a complete overhaul of their credit report while others only require help via a quick fix or clean up.
The first step in repairing bad credit is to clean up one’s credit report. The second step is maintaining a good credit history.
]]> With the first step, you don’t necessarily have to have bad credit in order to want to clean up your credit report. It is advisable to check it often and carefully even if your credit is good. One prudent practice is to fix your credit report five to six months prior to applying for car loans or a mortgage.Everyone who has had credit denied to them can get a copy of their credit report. You can secure this from banks and credit bureaus which are responsible for reporting negative data about you. It is recommended that you analyze your credit report twice a year just to guarantee accuracy.
After getting your report, check on the data contained in their order of importance. It must contain: one’s full name and any previous names; Social Security number; contact number; lawsuits; liens; bankruptcy data; one’s credit history; one’s previous and present address; employment history; and marriages.
The most vital items to check on the list are: one’s name, Social Security number and address; inaccurate account histories that list late payments despite up-to-date payments made; accounts that were not opened at all; lawsuits that one was not involved in; liens which were never acquired or liens that have been discharged in relation to a bankruptcy yet are still listed; bankruptcies that are over 10 years old; all negative data about you that is over 7 years old; credit inquiries that are more than 2 years old; a missing notation on a disputed credit card bill; closed accounts inaccurately listed as open; and all accounts which have actually been closed but are not shown to have been closed by you.
There may be mistakes on your credit history due to human error, or an identity theft, or perhaps old records that need to be updated. Regardless, these need to be removed from your credit report.
Submit dispute letters in order to clean up your credit report. You can give these letters through the Internet, via fax or regular mail. Don’t try to call because you won’t be entertained by the officials in charge.
After checking your credit report, you need to find ways to reestablish good credit. Be forewarned that this process may take up to 18 months with a lot of hard work on your part since you have to show proof that you can be financially responsible. By persistently trying to post positive transactions on your credit report, you can eventually prove worthy of good credit status.
First of all, pay back all your debts. Begin with those items that fall under the public records section of the credit report.
Second, save as much money as you can in order to prove that you can manage your money and credit.
Third, if you must make payments, use cash rather than credit. Should you insist on maintaining credit cards, pay off every outstanding balance and maintain only two cards at the most.
Fourth, set up a savings account that will prove you can manage money. This may also be utilized as collateral later on.
Fifth, create personal links with the loan officer or branch manager of the bank where you established your savings account.
Sixth, call on those creditors with whom you already have a clean slate to help you reestablish a credit line. They might assist you by checking at how regularly you paid prior to developing problems, as well as determining how long it took you to get back on track.
Seventh, you might be able to convince an acquaintance who trusts you to enter into a cosigning agreement for you but make sure he or she is knowledgeable about cosigning loans before they do so.
Eight, if you can be approved for a secured credit card, do so since this is a smart way for a customer with bad credit to reestablish good credit fast.
Ninth, you might want to apply for a retail card from furniture stores, appliance chains, and gas stations. These retailers might provide you with credit even with all your credit problems. Should you be denied, attempt to buy products using a layaway plan since this may eventually prove to the store that you can handle a charge card.
The last and most important way to reestablish good credit is to pay your bills on time. This is the most essential method for maintaining a good credit history. Remember, no one will trust you if you don’t pay your bills on time and all your efforts at reestablishing good credit will go to waste.
Dave Poon is an accomplished writer who specializes in the latest in Finance. For more information regarding Bad Credit Help please drop by at http://www.gofinancialsphere.com/
]]>Steve Bucci, aka The Debt Adviser, writes an advise column for Bankrate.com. In a recent edition of his column, Mr Bucci provides sound advise to those people marrying someone with bad credit.
From Bankrate.com: When good credit marries bad
Dear Debt Adviser,
I recently got married. I knew that my husband’s credit score was really bad. What I don’t understand is why my credit score has now dropped and all my credit cards are lowering my limits? I haven’t done anything except get married. How do I fix this?
– Michelle
(This article is continued at Bankrate.com…)
]]>By Todd Green
A post on CreditBloggers details the tribulations of a poor soul that can’t open a bank account due to having a negative file over at ChexSystems. For those that don’t know, ChexSystems is a company that reports adverse checking account activity. This is sort of like a credit reporting agency for referencing checking account history.
From CreditBloggers: ChexSystems: The Credit Reporting Agency You Don’t Want to Have a File With
According to their website, “ChexSystems, Inc provides deposit account verification services to its financial institution members to aid them in identifying account applicants who may have a history of account mishandling (for example, people whose accounts were overdrawn and then closed by their bank).”
(This article is continued at CreditBloggers…)
]]>Credit.com has started a new section on their website called “Credit 101.” This series provides an excellent introduction to the basics of the credit system. The first article, The Building Blocks of Credit, covers the fundamentals of credit. This article’s objective is to help the reader better understand and leverage their credit history.
From Credit.com: Credit 101: The Building Blocks of Credit
If you’ve ever applied for a job, rented an apartment, bought or leased a car, opened a bank account, applied for a mortgage or been issued a credit card, you’ve participated in the world of credit. At Credit.com, we believe credit can be a positive force in every aspect of your life. To put this power to work for you, however, it’s essential that you understand your own credit — and what your credit information says about you to the growing number of companies that use credit information to make life impacting decisions about you. These companies include lenders, insurance companies, employers and utility companies.
(This article is continued at Credit 101…)
]]>Some members of the Motley Fool community discuss making big bucks from using credit cards. This intriguing follow up from a previous article reports specifics on how “fellow fools” have actually cashed in from using cash back and reward cards.
From Yahoo! News: Make Big Bucks From Credit Cards
To back up a bit, in my earlier article I explained:
(This article is continued at Yahoo! News…)
]]>by Todd Green, The Credit Pro
Caroline Mayer of The Washington Post has written an interesting article outlining two studies done on the debt collection industry. These opposing studies were prepared by ACA International representing the debt collectors and by the Federal Trade Commission in defense of the consumer. Interestingly, Ms. Mayer unexpectedly concluded that the dept collector study was quite intriguing instead of being ”self-serving dribble.”
From The Washington Post: Debt Collectors: The Good, the Bad…
I bet you didn’t know that. Neither did I until I read the latest study from ACA International, the association that represents debt collectors. Normally I would throw such a study away, discounting it as self-serving dribble. But the study’s findings are so intriguing I had to share them. And of course, I’d love to hear your thoughts on them:
(This article continues at The Washington Post…)
]]>By Chris Studer
Consolidating student loans is one of the most effective ways to improve your FICO score dramatically. A FICO score is perhaps the most important factor in shaping your financial future. Just a few additional points on a FICO score can literally save tens of thousands of dollars over a lifetime by locking in low interest rates on houses, cars, and other items purchased with credit.
How FICO scores are determined
A FICO score is derived from a complex algorithm that weighs different aspects of your past and present financial situation in order to predict how good of a credit risk you are likely to be in the future. Each factor is weighted differently depending on importance with 35% of the score based on payment history, 30% based on the amount of debt owed, length of history contributing 10%, new credit 10%, and types of credit 10%.
]]> How student loan consolidation directly improves your FICO scoreBecause the second heaviest weighted factor (30%) is based on the amount of debt owed, reducing this amount can make a drastic impact on your credit score. Lenders also look at debt to income ratio when determining the amount of credit they will make available. Particularly for those who are just starting their careers, the lower monthly payments that result from consolidating a student loan can make a highly favorable impact on debt to income ratio.
Borrowers who refinance their student loan often save well over 50% on monthly payments. For example, the payment on a $30,000 student loan before refinancing is approximately $350. After consolidating, the average payment is around $166, a savings of more than $2,200 per year.
Indirectly improving your FICO score with student loan refinancing
Young adults who are just leaving school and starting their lives, families, and careers already have the chips stacked against them when it comes to finances. The majority of people rely on credit cards to help leverage cash flow in the years following college. But credit cards, especially for those who can’t pay off the balance immediately, can become a source of angst and take a toll on your FICO score.
By choosing to redirect the money saved from student loan consolidation, borrowers can pay down high interest credit debts. Using the above example, redirecting $2,200 per year toward paying off high interest credit card debt can add up significantly. The total over 5 years can result in $11,000 worth of high interest debt repayment.
How student loan refinancing works
Student loan refinancing works by first locking in a low fixed interest rate as opposed to the variable interest rate customary of most government loans. Once a specific repayment amount is determined, the loan is then spread out over a longer period of time, resulting in a lower monthly payment. There are no penalties for early repayment of a consolidated student loan, so borrowers can leverage the lower monthly payments to improve their FICO score and pay off high interest debts early on.
Benefits of improving your FICO score
The effects of a student loan consolidation on a FICO score should not be overlooked. Consolidating student loans is one of the simplest ways to make a huge improvement to your score. The ability to secure credit at low interest rates will most definitely have an impact on your financial future and the lifestyle you are able to lead. With a better FICO score you can have access to higher limits of credit, get loans faster, and reduce the amount of your hard-earned income being spent on interest payments.
ScholarPoint Financial, Inc. is a national online consumer lending company specializing in student loans. We believe in combining state-of-the-art technology with world class service to help students and parents easily gain access to data, become informed, and enjoy the process of obtaining a college loan. Learn more about Student Loan Consolidation at http://www.scholarpoint.com/
]]>The most important part of qualifying for a mortgage isn’t how much of a down payment you can make, it’s how good your credit score is. The better your credit, the more easily you can secure a mortgage loan, even without a fat bank account or a high-paying job. The first and most important action you should take is to get your credit report from each of the three major credit bureaus, Experian, Equifax, and TransUnion. You have to get all three reports because the companies and utilities that extend you credit don’t report to all three bureaus. The result is that each consumer has three credit reports with three different sets of information. You can access the reports for free at least once a year. If you find errors and report them (see below for details), you can get a revised report for free.
]]> Your credit score is based on the information in the credit report. In the simplest terms, the score indicates how likely you will be to pay back a loan in full and on time. According to Steven Burman, president of Credit Advocates and an expert credit counselor, it reflects your credit history, how much debt you currently carry (called outstanding debt), how much debt you’re already approved to carry in the future (add up the credit limits on your credit cards for the answer), how long your credit history is, and how timely you are in paying bills. The higher the number, the better your credit is, ranging from a low of 300 to a perfect score of 850. Do everything you can to improve your score — it’s even more important than saving money, in my opinion! Why? Because the higher your score, the better the interest rate you will get. If you have a very high score, you may even be able to buy a house with no money down.Improve Your Credit Rating
Steve says that you have to take personal responsibility for your credit, and I agree. The first time many people see their credit reports is when they are about to purchase a home or a car. Because it can take about 3 months (and sometimes much longer) to change a credit score, if the score is wrong or low at that time, it could be too late to fix it. You could lose that fabulous apartment! Don’t let that happen — start changing your score today. Here are six proven ways to improve your score:
1. Check and correct your credit history
Thirty-five percent of your score comes from your credit history, according to Steve. Unfortunately, 70 percent of credit reports contain errors — mistakes that can adversely impact your score! Mistakes range from the misspelling of names, to reporting wrong addresses or places of employment, to confusing the accounts of people with the same name, to including outdated information. You can and should report errors to each of the credit bureaus since they do not share information. You can file disputes by phone or by mail, but you may find that it is most convenient to dispute errors online. Once the credit bureaus receive a dispute, they have 30 days to investigate. If they cannot verify the information in that time, it is deleted or corrected by default. Once you dispute information, the onus is on them to prove it. If your payment was late once or twice and the creditor reported it to the credit bureau, you can ask the retailer or credit card company to issue a letter of correction. For example, many retail stores would prefer to keep your business by issuing a correction than lose it by refusing to. Always follow up on promised corrections by rechecking your credit report. If some of the accounts on your report are old and closed, tell the credit bureau that you don’t recognize them. They will investigate, find that you are not a customer, and remove them. It’s best if your credit report lists only active accounts. Even when some of the accounts are closed, having dozens of them may make lenders assume that you are not a stable credit risk.
2. Pay down high balances
The amounts you owe on revolving credit accounts are responsible for 30 percent of your score. Steve says the fastest way to improve your credit rating is to pay down balances. After he advised one client to use all of his available cash to pay down his credit card bills, the client’s credit score went up by 100 points. Keep revolving credit accounts under 30 percent of the available limit. For example, if your credit card limit is $10,000, keep the balance under $3,000. High balances adversely affect credit ratings. Plus, credit card debt is expensive to carry. Some cards charge up to 24 percent interest on unpaid balances. Are the designer jeans and fur jacket really worth that? Pay off your credit cards! You can also negotiate with your credit card company to reduce or eliminate interest charges and sometimes even reduce what you owe.
3. Make history with your credit
It’s good to have some activity and history on the account. “Many people think closing accounts will make their credit look better, but it depends,” says Steve. “Look at the accounts you are closing and keep the oldest one. Length of credit history counts for 15 percent of your total score.”
4. Think twice about new credit
When you open a new credit card account, the creditor makes an inquiry to one of the credit bureaus to evaluate your history. The number of recently opened accounts and credit inquiries accounts for 10 percent of your score. (Note that checking your own credit report doesn’t count as an inquiry, however.) “If you start applying for loans at an auto dealership or a bank and each one does an inquiry, it’s a negative,” says Steve. When a store sends you a sales pitch saying you’re preapproved for credit, resist the temptation to fill out the application form. One credit card is all you really need. At any rate, closing an account doesn’t mean it automatically disappears from your credit report. You have to ask them to remove it. Better yet . . .
5. Pay with cash
Using debit cards and cash are good ways to control your debt (and therefore maintain a great credit score).
6. Pay all your bills on time
Late payments can have a substantial negative impact on your score. For example, you can raise your score by as much as 20 points simply by paying bills on time for 1 month!
For more information on improving your credit rating, visit the Federal Trade Commission’s credit repair page at www.ftc.gov/bcp/conline/pubs/credit/repair.htm. To dispute information in a credit report, here is how to contact the credit bureaus:
Equifax Information Services, LLC
Disclosure Department
PO Box 740241
Atlanta, GA 30374
800-685-1111
www.equifax.com
Experian
475 Anton Boulevard
Costa Mesa, CA 92626
or
955 American Lane
Schaumburg, IL 60173
888-397-3742
www.experian.com
TransUnion LLC
PO Box 1000
Chester, PA 19022
800-888-4213
www.transunion.com
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
877-322-8228
www.annualcreditreport.com
Annualcreditreport.com is the official site that helps consumers obtain the free credit reports they are entitled to annually, as required by law.
Reprinted from: Invest in Your Nest: Add Style, Comfort, and Value to Your Home by Barbara Kavovit © 2006 Rodale Inc. Permission granted by Rodale, Inc., Emmaus, PA 18098. Available wherever books are sold or directly from the publisher by calling (800) 848-4735 or visit their website at www.rodalestore.com.
Author
Barbara K is CEO of barbara k!, a comprehensive lifestyle brand that offers solutions for women through innovative home enhancement/repair and automotive products. She is also the home improvement expert for AOL Coaches and author of the inspirational fix-it handbook Room for Improvement. Barbara has been featured in the New York Times, USA Today, Real Simple, and O, The Oprah Magazine, among others, and has appeared on numerous television and radio programs, including Today and Good Morning America. She lives in New York City with her son, Zachary. For Barbara K’s products, visit www.barbarak.com
Credit card balance transfer is an important feature for many credit card users. It allows them to transfer their debts from one credit card to another. This is significant if their new card has a lower interest rate than their previous one.
Credit card balance transfer feature can be a great way of consolidating your credit card debt and finding a way to dig yourself out of your debt burden. This option is in high demand and many credit card issuers include their balance transfer services upfront in promotion material. A good credit card balance transfer option can help them gain customers from rival credit card companies.
]]> There are a great number of credit cards that offer a 0% introductory credit card balance transfer fee. This way when you acquire your new card you can right way start transferring the balance from your old cards to your new ones.Thus if you are looking to get a new credit card to transfer your old balances, you should find one that has less fees or a lower interest rate than your previous ones. Also be careful about any credit card balance transfer limits on your new card. This could cause you to be able to only transfer a partial balance so you still have to maintain your old cards.
If your old credit card balances are accumulating a high interest rate, it might be time to get a new one with a credit card balance transfer option. If you have improved your credit ratings and your current credit card interest rate has not dropped, you can apply for a lower interest card than transfer your balance to it.
Instead of having to worry about multiple balances you will only have to pay attention to one credit card balance and make one convenient payment instead of multiple payments. Thus you can better plan your budget and decide how to reduce your credit card debt. The APR can vary greatly from one credit card to the next. Consider having all your high interest credit cards and department store card balances on one low interest card. You can end up saving a substantial amount of money over time. In conclusion proper use of the credit card balance transfer feature can be useful and convenient to some and to others a vital way to get out of credit card debt.
About The Author
Jakob Jelling is the founder of http://www.cashbazar.com/. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
With the price of gas seemingly going up by the day, motoring is becoming an expensive pastime. What you may not know, however, is that you can cut the cost of gas with the help of a credit card. Any old card won’t do, though. What you need is a gas rebate credit card.
As the name suggests, these cards repay a portion of your total spending on gas. The proportion is typically 4 or 5 per cent, though some cards offer higher percentages (up to 10 per cent) during the introductory period. The money will normally be credited to your account by the end of the month concerned, though you may have to wait until you have accrued a certain amount - say $20 - before you can redeem it.
]]> Many gas rebate credit cards offer rebates only for certain brands, and some can only be used at specific locations. This is excellent for people who regularly use the same gas station to fill up, but may not be so good if you are the sort of person who likes to shop around for the cheapest fuel, or if your job regularly takes you many miles from home. Likewise, if you are running low on gas, looking for somewhere that will accept your particular credit card can be tedious. Fortunately, however, there is a growing number of cards that can be used at any outlet, with any brand of gas.Another advantage of gas rebate credit cards is that they will often give you cashback on your other purchases as well, albeit at a lower rate. For example, you might get 5 per cent cashback on your gas purchases, and 1 per cent on any other purchases made with the card.
Gas rebate credit cards are becoming increasingly popular with drivers who want to reduce their motoring costs. This is especially true if you drive a truck or SUV with high fuel consumption, or if your job involves a lot of driving.
Most card issuers pay back the customer in the form of a credit to their account, but some offer gift certificates or other rewards. In some cases you are given a choice. The rewards on offer will have a greater monetary value than the cash rebate, so if you genuinely need the items concerned you may be better off accepting the rewards.
Finally, it’s important to shop around before you buy a gas rebate credit card and read the small print carefully. Work out your typical annual spend on gas, and then see which card’s terms will offer the most advantageous deal for you. One thing to watch for is that many cards impose an upper limit for the top rate of cashback. The Discover® Platinum Gas Card, for example, pays back 5% on your first $1,200 in gas purchases every year, but after that the rate falls to a less exciting 0.25 to 0.50 per cent.
Nick Davis is the owner of http://www.finest-credit-cards.com/, which aims to match you up with the ideal credit card to suit your situation. The site has an entire section devoted to gas rebate credit cards. You can view this at http://www.finest-credit-cards.com/categories/gas .
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