Credit Repair and Debt Consolidation

Unfortunately, many people will overlook this option, feeling that going
with debt consolidation means they are giving in to the enemy. Credit
repair, debt consolidation is simply another weapon at your disposal for
getting and staying on track.

Professionally trained and independently certified counselors evaluate your
financial situation, assist you in creating a budget, and work with
creditors to negotiate a possible reduction in these key areas:

. Finance charges. Late fees and / or over-limit charges.

. Monthly payment pay-off time. The credit repair debt consolidation
program will help you simplify your financial monthly commitments.

. Interest payments.

. Length of time that you have bad credit.

. Time taken to become debt-free.

. Overall stress in managing your finances and therefore your life also.

Credit Repair

For those souls brave enough to attempt credit repair themselves, this
should be your mantra: "I will not tip off the credit bureaus to what I am
doing". Make sure you do not disclose your intentions to creditors or you
will not be able to repair your credit as easily as if you follow some
simple rules. Most credit repair law relates to the Credit Reporting Act,
sometimes referred to as the FCRA. In order to legally repair credit scores
or improve them, credit reports should be reviewed for inaccurate information.




Credit Score

Perhaps you have been cutting corners, tightening the budget, and working
with the credit bureaus but find your credit score is still too low to buy
a house or car. Credit repair clinics, law firms and counselors offer
services to those who are interested in improving or protecting their
credit scores.

Credit Cards

Credit cards can be the worst culprits for landing you with debt. Card
credit debt reduction strategy is your most valuable possession. Credit card debt help can be achieved through various means, but I would like to mention Lexington Law Firm as a credible resource. Credit card debt consolidation will improve the way you
live and help you rise above the rest by eliminating credit card debt.

Bureaus

If for some reason, you cannot access your credit reports on line, the
credit bureaus provide toll free numbers and mailing addresses to use
instead. Some of the credit bureaus allow you to dispute information on
line. Many government agencies and the credit bureaus themselves advise
that only time and patience will improve credit scores. Some companies that
offer prepaid and secured credit cards charge a fee to report account
activity to the credit bureaus. You will be involved throughout the
process, because the credit bureaus will only communicate directly with
you.

Conclusion

The bottom line is this: Whatever you do, do not miss the chance to repair
your credit through credit repair debt consolidation. Some companies
suggest that debt consolidation may improve your overall credit score, but
as a strategy for credit repair, debt consolidation may not be the best
choice.

Counselors will provide you with a free budget analysis to help you
determine if the credit repair debt consolidation is right for you. Credit
repair debt consolidation is just what you need to get out of debt and
repair your low credit score right away.

It is recommended that you use professionally trained and independently
certified counselors to give you qualified advice, and any information in
this article should first be checked with these qualified professionals
before applying any advice.

It Takes Credit to Make Credit

Using a credit card wisely is an important step in building a good credit
rating. If you're trying to re-build your credit or if you're young and
just starting out, pay close attention the next time you receive a new card
offer in the mail. When you're trying to build a positive credit history
for yourself, using the right credit card makes sense. Making small
purchases and then making your payments on time each month is a simple,
reliable way to build an outstanding credit report.



What to Look For On a Credit Card Application

If you receive a credit card application that appears to offer a low monthly
interest rate, don't make a decision until you turn it over and closely
examine the Disclosure Box. In it you'll find a more important measure
of credit terms - the Annual Percentage Rate, or APR. By federal law,
the Disclosure Box will also tell you whether or not the card has what is
called a grace period - a number of days, usually 25, until your purchase
starts to accrue finance charges. If a card has a reasonable grace period
and you pay off your balance at the end of each billing cycle, you won't
have to pay finance charges. It isn't difficult to find credit cards that offer
these grace periods, so if the Disclosure Box doesn't declare one then throw
the application in the trash and look for a better offer.


If you don't have any credit history at all, a credit card company
won't want to give you a very high credit limit, but that's probably best
when you're just starting out. You don't want to be tempted to go into
serious debt with your very first credit card.



Calculate Your Monthly Finance Charges

Ideally you want to pay off your balance each month to avoid paying any finance
charges, but when that isn't possible it's important to know the actual cost of the
items you purchase. The annual percentage rate, divided by 12 months, gives
you the periodic rate that will be applied to your outstanding balance each month.
You can estimate what your monthly finance charge will be by multiplying the
periodic rate times the outstanding balance. It may sound complicated at first, but
taking the time to learn this simple equation can make a big difference in how you
use your credit card.


When you're able to see how much you actually spend on an item that
you don't pay off at the end of the month, it might help you to resist the
temptation to over-use your card. An item that you want to buy might be on
sale at the time you purchase it, but if you don't pay off your balance at
the end of the month then those finance charges can dramatically increase
the actual amount you'll end up paying.


Use Your Credit
Card as a Tool

Credit cards are only one of the tools available to help you build a positive
credit history. Making on-time payments for other forms of credit, such as rent
and utilities, are also important. Depending on your situation, within 1-2 years
your credit rating will be improved enough that you no longer need to use your
card for new purchases to maintain your good credit. Use these tools wisely, and
they'll help build your financial future!

Three Ways to Raise Your Credit Score

It used to be that "people" made decisions about your credit worthiness.
You knew your banker and your handshake was all the collateral you needed.
Those days are long gone, and now a single number - your FICO score -
determines your credit worthiness.

Although there are several credit models, the most commonly used is FICO,
based on a model created by Fair, Isaac Company. Their consumer website is
myfico.com, and you can find information about the FICO credit scores
there.

Your FICO credit score can be used to determine your interest rate and how
much credit a lender will give you. So taking care of your score, and
keeping your credit clean will save you money.

Preserving your FICO score, and improving it, is not difficult, but it may
take time. Here are some tips to maintain and improve your score, based on
three credit situations.

Strategy One: Obtain a Credit History

There are many reasons you may have no credit history. Maybe you're just
starting out, maybe you pay cash for everything and have never needed a
loan. In any case, if you have no credit history, your FICO score is
likely to be low.

The easiest way to raise your score is acquire a loan, and pay it off on
time. In general, installment loans are weighted more heavily than credit
cards. In other words, you will improve your credit score faster if you
buy goods with an installment loan, rather than acquiring a credit card.

Another way to acquire a better credit history is to take $1000 and open a
6 month CD account at a financial institution. Now, get an installment
loan for $1000, using that CD as collateral. Now, here's the trick. Take
the $1000 loan, and open another 6 month CD account at another institution.
Take another loan for the $1000 at the second institution. Do this one
more time.

Now what you have is 3 loans. Pay the minimum payment for 6 months. In
the last month, cash out your CDs and pay the loans off. You now have a
credit history, and did not go into long term debt to get it.

Strategy Two: Maintain Your Good Credit History

Good job - you have paid your bills on time, and do not have high credit
card debt. Here's some ideas to keep your FICO score as high as possible.


First, don't close your old accounts. One part of your credit score is
based on the amount of credit available verses amount of credit used.
Closing old accounts can lower this part of your score.

Second, paying off your credit cards every month is good money management,
but you may be able to improve in this area. Here's the scenario: you
have a $2000 credit card. Every month, you charge about $1800 to that
card. And, every month you pay it off. But here's what happens - your
credit card company reports your credit information monthly to FICO. If
they report it before you pay off your card, it looks like you carry a
balance on your credit card every month. You may find your FICO score
improves if you pay off your credit card at a different time of the month.


Strategy Three: Repair Your Poor Credit History

For whatever reason, if you have a poor credit history, there are things
you can do to improve your score. Some of them take time, and you will
probably be best served by talking to a credit counselor to be sure that
you not only repair your credit history, but also eliminate what caused
that poor credit history in the first place.

The most heavily weighted part of your score is based on your payment
history. The first thing to do to start repairing your credit history is
to pay your bills on time. The mortgage is the most important, followed by
installment loans, and finally credit cards.

The next largest portion of your FICO score is based on how you use credit.
The fastest way to improve this is to pay down your credit cards.

One final thing to look for is errors in your credit report. Get a copy of
your credit report from all three primary agencies, and look at all the
entries. You can find the agencies here: experian.com, equifax.com, and
transunion.com. If there are any errors, start the process to have them
removed. Call your creditors - sometimes they will remove negative
information.

Your FICO score is an important part of your financial life, and using
these strategies may help improve your FICO score. Before making any
drastic changes to your finances, consult with a financial advisor.

Raising your credit score

Raising your credit score

If you ever plan on buying a house or purchasing a new auto, raising your credit score is the most important step. Credit in America is the most importance factor in the buying process. Whether you successfully complete that major purchase or not is determined mainly by the strength of your credit score.

The amount of money that you will pay in interest will be determined purely on what your credit score reports to the lender. Plan and simple.

Lenders tend to have set parameters as to what constitutes the best rate that a borrower will receive for a loan. Usually, the best rates are for individuals who have credit scores of 720 and above. If your credit score is just six points below a cut off, you do not qualify for that particular rate. This can result in you paying thousands of dollars more over the course of a loan.

The difference in what you pay on a loan between the two scores on a mortgage of say, $350,000 is astounding. Based upon the example of the two scores above, the first borrower if he was able to get a rate of 6.25 percent, his base mortgage payments would be $2,155 per month. For the borrower who misses the tiered cutoff, may drop to a bracket that is one half to three quarter points higher in rate. This is a base monthly payment of $2,270-2,328 per month. That is nearly $175 per month between the two interest rates! The difference between these two rates over an eight year period is over $16,000! Do you now see the importance of having a high credit score?

This places great emphasis on raising your credit score as high as you can get it; along with shopping carefully for the best deal when purchasing a home. Making a determined effort to do everything that is required to eek out the lowest eighth of a point possible.

But first we must increase your credit score to the highest limit as soon as possible. This calls for a short period of making some adjustments in your financial life. The hallmark of any advice on raising your credit score begins with paying your debts on time, lowering the balances on the credit that you do have and not taking out any additional credit. I cannot emphasize this stronger. Having worked as an automobile salesman fresh out of college, I remember numerous customers coming in to buy a car and mentioning somewhere in the process that they were also buying a home. Do this and your credit score will drop like a rock from several factors. First, you will have your credit report reviewed by several lenders (auto dealerships like to submit your credit report to several lenders at once to get a quick approval). Second, you will be adding additional debt on to your credit. One factor in determining your credit score is how wisely you use credit. A new purchase appears on your credit report as zero amount paid off! Keep this in mind as you consider raising your credit.