Expert Debt And Credit Repair

Guide To Everything You Need

To Know About Your FICA Score

I came to a realization that people and especially Americans cannot do without credit. I didn’t just think of this on my own, though.

Statistics have it that:

1) There are 1.3 billion payment cards in circulation in the United States of America alone! Statisticians conducted a research survey and discovered that the average American family has a total of 13 payment cards ranging from store cards, credit cards, gas cards, debit cards, etc.

2) A staggering 96 percent of Americans retire being fully or partly dependent on other family members, the government or charity organizations.

3) $5,800 on average is carried by Americans on credit card debt – month to month.

These are real statistics that show how much we depend on credit as well as a good credit score to acquire so many things in life ranging from a house, a car, student loans and other necessities.

Your 3-digit FICA credit score can determine what you can get and how much it will cost. Lenders and creditors just assess your credit score, which is calculated on your history of creditworthiness and obtain accurate information on whether you as a lender would be able to repay a loan on time or not.

It’s essentially the personal equivalent of your business Paydex score.

There are several things that you can implement in order to improve your credit score from an all time low to a high.

Here is what you can possibly do:

1) Use your cards lightly

Avoid stacking up your balances on your credit cards whether you end up paying off the bill at the end or not. You can up your credit score by limiting charges to your credit card not to exceed 70% of your card limit. To limit your charges you may track your charges by frequently assessing account with your card issuer.

2) Pay your credit card bills

Although paying your installment loans like mortgage, car loans, etc. on time has a positive effect on your credit score; what is considered more is your ability to pay off or service revolving loans like store and credit cards. A good technique is actually paying off your credit cards, which are closer to their limits and working your way down.

3) Check your limits

As much as possible avoid maxing out your card to the limit. If you have a monthly charge to that card that causes it to max out, get a card with a greater limit since that can lower your score when the formula is used.

4) Acquire Goodwill

‘Good customers’ can easily get goodwill from the card issuer. Good will is a request to the issuer to erase a record of delinquency or delayed payment, which may stain the credit score when the formula is applied.

These are just some of the tips for making your credit score better but they are not limited to only these.

There are other ways and you may discuss the most suitable options for your needs with your financial consultant on the possible ways that there are to dealing with credit scores.

We thank Yan for this contribution and you can see the original article at Qondio.

Credit Card Debt

The need that some people have for so many things cluttering their lives is really having an effect on the ever increasing credit card debt. As every year passes, the number of people that become victims of the banks willingness to grant ever increasing credit card limits, is growing to plague proportions. And if the limits are not raised enough then the consumer has plenty of options available to get credit cards from other suppliers.

The recent Global Financial Crisis should have been the wake up call for the banking institutions as credit card debts are spiraling out of control but nobody is prepared to bit the bullet and say “enough”. Consumers of credit are left to struggle each month making the payments on debts that they should never have been allowed accumulate in the first place. The problem is not going away and the financial institutions are continuing to allow credit in ever increasing amounts to people who can ill afford to be in debt.

If you have several credit cards then you are at risk of becoming a statistic in this credit-debt-bankruptcy spiral. In most bankruptcy cases credit card debt is the prime reason for the financial crisis. The last thing on peoples minds when they are over-purchasing on their credit card is the additional interest they will be paying on top of the ticket price and how long they will be paying for the item because of the high interest rates.

Take control of your life and systematically reduce your reliance on credit. Start by eliminating any extra credit cards that you might have. When new offers arrive in your mail consign them to the rubbish bin. There is absolutely no need for you to have any more than one credit card and link it to your bank account. Create a family budget and allocate a regular amount each month to reducing your credit card debt and set that as a scheduled payment to your credit card.

If you are a young adult and have not yet climbed onto the credit card train then my advice to you is to avoid it like it is the plague. Most of the debts that I see accumulated on credit cards are for ridiculous, unnecessary items that would have lost their glamour a day after purchase. Without such debts you will be able to live an enjoyable family life free from financial stress.

Start today with a positive attitude to reducing your dependance on your credit cards and eliminating all but one card. This card should then be brought under total control so there is no outstanding credit on the card. In other words you should be using the card only to purchase things that you can afford to pay for at the end of the month when the bill arrives. In the case of emergencies the card could be used to pay for something that may not have been budgeted for but immediately you must set in place your debt reduction plan again and eliminate the debt.

There is only one person responsible for the debts that you have accumulated on your credit cards and so start to take action today to gain control of your life again. Make additional payments, work extra hours or an extra job and get your credit/debt under control before you become another statistic of this financial nightmare

In many countries now there are various types of home loans available to the purchaser of a home and in particular if you are a first time home buyer. Variable rates, fixed rates and interest only are just some of the loans available and each has a place in the system and give benefits to the purchaser. For example right now interest rates are low because of the Global Financial Crisis and so the best deal around at the moment is to lock in these low interest rates with a fixed interest loan. As interest rates inevitably go higher your mortgage interest rate will remain at today’s low rate.

Some lenders offer the option of making a 1% interest payment and at first glance most people reject this option outright because every month the borrowed amount is increasing. There is nothing being paid off the capital amount and interest is being added every month and so the mortgage will never be paid off at this rate. It is advisable to talk to your accountant or financial adviser about this type of payment arrangement because it can be very beneficial to you.

In some circumstances, the increase in your outstanding amount each month is of course interest, and this interest amount can become a tax deduction. If your regular mortgage payment is $2,400 each month and the 1% option payment is $1,000 then the $1,400 you save each month should be deposited into a savings account and let run for about 5 years when you would have around $100,000 saved to pay off your mortgage. Everybody’s circumstances are different and your financial adviser can detail a plan ideal for you. It may well be that you can benefit best by paying a chunk off your mortgage and claiming the tax deduction each year. While someone else may be best advised to wait a longer period.

I personally am of the opinion that the deferred interest should never exceed the value that your house is increasing each month. In other words if your house value increases $2,000 each month then it would be a workable situation to have deferred interest of $1,400 each month because the mortgage is staying relative to the house value. If house values start to decline you should quickly stop deferring interest and reduce the capital loan as fast as possible.

Having equity in your home is certainly something to desire, however, the investment return on home equity is zero. And the only way to benefit from having equity in your home is to sell the home or take out a further mortgage on your home. So it makes sense to forego a part of the equity in your home each month and convert it into a tax deduction. In this way you will have the cash savings that you are banking each month and you will also have some equity and a sizeable tax deduction.

A little trick that I learnt with my mortgage is to stop making the payments monthly and pay weekly or every two weeks and this can reduce the time it takes to repay your mortgage by many years – in some cases 10 years or more. Speak to your banker and make sure they will accept a changed payment schedule and then have the payment deducted from your account automatically. You will never notice the difference from your weekly budget but because interest on your mortgage is charged daily you are significantly reducing the interest charged on your account.

Another valuable tip that I discovered is that my loan was connected to an index and my interest varied in line with that index, I found that I could choose the index and that some of the choices moved a lot slower than others. The Monthly Treasury Average Index was the one that I chose because it seemed the slowest to move over a period of time.

When you are applying to a financial institution to borrow money you are generally asked to sign a form that will grant the lender authorisation to check on your credit score with your countries credit reference agency.

A credit score check is quite often the first thing that a financial institution (lender, insurer, bank or credit provider) will do to establish the type of loan product that may be available to you. Your credit score may well be a deciding factor in the setting of your interest rate if you are successful in your application.

Once you have given your permission to the lender to access your credit history the credit check is reasonably straightforward. The lender will be able to view all the information held on your financial history including bills unpaid and in some countries all details of credit applications whether successful, or not. Some of this information in your credit score report you may not even be aware of yourself.

If you are intending to borrow money or apply for a new loan you should get a copy of your own credit score from your local credit reference agency and make sure that the details contained in the report are correct. Sometimes information that should have been removed is unintentionally left on the file. Sometimes the information should have been on the file of someone with a similar name. If you find inaccurate information you should contact your credit reference agency and ask them to clear these incorrect items.

A quick internet search will direct you to the applicable credit reference agency for your country and a report can be made available to you generally for around $20 US. This is the same report that any prospective lender will be researching before agreeing to loan you money and so study it carefully before you apply for credit.

The world, Americans included, is suffering from a serious disease – the disease of excessive debt. The problem has been an availability of very cheap credit in recent times, and no real regulation on who can or cannot take on debt. It has meant that many people have taken out credit cards and loans that they can barely afford. Sometimes, this has led to people taking large loans or mortgages for real estate they cannot realistically afford on their salaries. In other cases, it has resulted in people taking on several credit cards and blindly purchasing products & services and just “charging it”.

For some, it has been managable. Sadly, for an increasing number of people, it has resulted in an inability to pay their debts. This site is here to help people understand what debt is, how it can be managed and what to do if you find yourself in problems regarding debt or credit status.

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!

Overall, Americans spend over $1 trillion every year on their credit cards, and owe more than $500 billion of it. If debt continues at the current rate, then one family in a hundred will be forced into bankruptcy. Over 90% of Americans’ disposable incomes are spent paying back debts.

When you add credit card debt to the regular bills we have to pay each month, which can tax anyone’s budget. As a result, some bills go unpaid and others are paid late.

Both of these instances can damage your credit sometimes so much that you think there’s no way you’ll ever be able to get out of debt and get credit for something important like a home or a car.

The truth is that you can get out of debt and repair your credit nearly to what it was before you had credit problems. It takes some time and a little work on your part, but it IS possible.

Loan approvals and such depend on your credit score. That number is what determines if you can get credit, what your interest rate will be, and how much money potential lenders will give you. A good median score is 750, but the higher your score is, the more financially sound you are.
While it’s always a good idea to try and stay away from credit, not everyone has a hundred thousand dollars lying around to buy a home or twenty thousand to buy a car. Heck, for some people, scraping together five thousand dollars for a good used car is difficult. That’s why we need credit. So we can buy that which we cannot afford.

Where the trouble comes in is when people begin to buy everyday items such as groceries and clothing on credit cards. Then those bills begin to get bigger and bigger until pretty soon, they’re paying the minimum amount due which will take forever to pay off. Plus, a lot of people just continue charging things even when they have a large balance on their account.

Your credit score defines who you are to businesses and you want it to be as high as it can be. It doesn’t matter how bad your credit is now. There are ways that you can raise your credit score no matter how low it is now.

Why is it important to have a good credit?

With today’s society becoming more and more business oriented, establishing and maintaining good credit is vital if you plan to do any of the following:

1. Apply for employment
2. Rent an apartment
3. Open a bank account
4. Setup an account with public service or the telephone company

It used to be that establishing good credit was important only if you planned to buy a home or car, but not anymore. The simplest task, such as applying for employment could very much mean that you need a good credit.

Having bad credit could impede your ability to survive. This is sad to say, but it is a proven fact that people have been turned down top quality job positions just because of their credit rating despite the fact that that particular job could be exactly what a person needs to fix their credit. That’s a scary catch twenty-two don’t you think?

Ok, I’m caught in that scary catch twenty-two, what should I do?

Start by requesting a copy of your credit report in writing. You are entitled by Federal Law to receive a free annual credit report. There are three major credit-reporting agencies that you need to contact, you can run a search on the internet or find their information in a phone book. If you have already received a credit report for that year, you may also use any letter of credit denial by sending in a copy of that letter within 60 days of its receipt with your written request. Be sure to include a copy of your state issued ID, proof of your address and your last known addresses for the past 5 years. It is very important to include a copy of your social security card.

What does is mean to have good credit? Who cares who sees it?

Unbelievably, your credit report is public information to anybody where you are asking for a line of credit. Any time you apply for employment, an apartment, or attempt to make a big purchase, you are asking for credit and permitting the potential creditor to view your credit report. Although your credit report does not reveal a personality diagnose, it may just as well, considering it is through your credit report how others (potential creditors) will perceive what kind of person you are.

Businesses look into your credit report and determine by your ability to pay and follow through on your promises what kind of person you are.