If you have ever wondered if your credit score makes a difference, in day to day credit situations, the answer is a resounding... yes. In fact, the lower your credit score the harder it will be for you to obtain any type of credit. However, it is not impossible as long as you are willing to pay the price.
The price you pay is the percentage of interest your loan or credit card will carry. Since financial institutions are in the business of making money, most don't think twice about issuing credit cards to individuals who have been deemed a 'high credit risk'. To say this practice is big business is putting it lightly.
Currently, the average credit score is 720. As a rule, if your score falls under 600 you will probably pay more in interest than someone with a higher rating.
Several factors are used to determine your credit score. They include: payment history, total debt owed, length of credit history, types of credit used and new credit.
The best thing you can do to improve your credit score is to pay your bills on time. As noted above, this is the most important criteria when it comes to determining your rating.
It is also important to keep your balances as low as possible. This will go a long way in improving your credit score. Why? When your credit cards are almost 'maxed out' you are considered a higher risk, because this shows you probably have a need to reach for a credit card, instead of paying with cash.
Just because you currently have bad credit doesn't mean that it cannot be improved upon. There are steps you can take to 'fix' the situation.
Unfortunately, this process won't happen overnight. Depending on the extent of your ailing credit it will take months, sometimes even years, until you are fortunate enough to have good credit. Look at it this way, it probably took quite a while for your credit to deteriorate... you can't expect the bad stuff to disappear in just a matter of weeks.
Step number one. Obtain copies of the credit reports. You will need one from each of the three major credit bureaus... Equifax, Experian and Trans Union. There are two ways to get your credit reports, at no cost. Every individual in the US is entitled to one free credit report per year, per credit bureau.
If you have already taken advantage of this offer, apply for a credit card. Obviously you won't be approved because of your credit rating, but the denial will entitle you to a free report.
Step number two. Determine a budget. This will give you some idea as to how much extra income you have that can be put toward your outstanding bills. It is always best to pay off higher interest credit cards first... even if the same amount of money will pay off two lower interest cards. You will end up saving money, in the long run.
Step number three. Change your shopping habits. Chances are impulse buying is what got you into debt in the first place. If you can curb the problem, it will make it easier to achieve creditworthiness in the future.
Follow these tips and you can repair your credit rating yourself.
Tuesday, October 07, 2008
Thursday, October 02, 2008
Debt Settlement Scams: What to Watch Out For
With the declining state of the current economy, more and more individuals are turning toward debt settlement as a means of eliminating their mountains of debt. Debt can cause stress and an overall decline in health. Creditors calling at all hours of the night even bothering you at your place of employment, no wonder many consumers reach a level of extreme desperation, even depression. Is there a light at the end of the tunnel?
There are many debt settlement companies that are completely legitimate. A debt settlement company will review your loans, your income, and assets, and determine a realistic level of payment for each debt you owe. They will then contact each creditor and negotiate a payment plan that's realistic.
Once you've made the lump sum settlement with your creditors you're out of debt. Debt settlement companies don't work for free. The fees can be based on a percentage of your loans, a set up fee, payment fees, and even closing fees.
Unfortunately, there are many debt settlement companies that are only after your money and have no intention of working with you or your creditors.
These companies exist only to bilk service fees out of desperate consumers who see no other way out. Instead of a light at the end of the tunnel there's only a brick wall.
They promise to contact your creditors in effort to lower your current balance and reduce your current payments as much as 50% or more. While legitimate debt settlement companies typically negotiate your balance scam companies offer empty promises, take your money and run!
One debt settlement scam that is gaining in popularity is the no hassle enrollment plan. This occurs when the company in question wants you to enroll in one of their plans over the phone, without any type of qualifying process or verification of your actual debts. Of course you have to pay a membership initiation fee and, most likely a monthly fee while they review your finances. If you decide not to continue in the program, too bad, there aren't any refunds.
Another popular debt settlement scam is one in which the company tells you that your creditors have agreed to the repayment plan and they haven't even been contacted. Or the settlement company has sent a letter to the creditor telling them the payments are being held in a trust account and have to reach a certain balance before they'll be paid. The consolidation company comes up with a monthly payment that the consumer pays them every month. A good chunk, as much as $50 to $100, goes to the settlement company as service fees. The money is held in a "trust" account until the balance reaches a certain level.
The consolidation company then pays the creditor. But if the creditor hasn't agreed to this plan, and most won't, they can continue to collect on the debt through whatever means legally available.
This type of plan could only make matters worse, because most creditors will not wait that long to receive full payment. In all likelihood, they could still take you to court.
Be aware that debt settlement is not the same thing as debt consolidation, or debt counseling.
There are many debt settlement companies that are completely legitimate. A debt settlement company will review your loans, your income, and assets, and determine a realistic level of payment for each debt you owe. They will then contact each creditor and negotiate a payment plan that's realistic.
Once you've made the lump sum settlement with your creditors you're out of debt. Debt settlement companies don't work for free. The fees can be based on a percentage of your loans, a set up fee, payment fees, and even closing fees.
Unfortunately, there are many debt settlement companies that are only after your money and have no intention of working with you or your creditors.
These companies exist only to bilk service fees out of desperate consumers who see no other way out. Instead of a light at the end of the tunnel there's only a brick wall.
They promise to contact your creditors in effort to lower your current balance and reduce your current payments as much as 50% or more. While legitimate debt settlement companies typically negotiate your balance scam companies offer empty promises, take your money and run!
One debt settlement scam that is gaining in popularity is the no hassle enrollment plan. This occurs when the company in question wants you to enroll in one of their plans over the phone, without any type of qualifying process or verification of your actual debts. Of course you have to pay a membership initiation fee and, most likely a monthly fee while they review your finances. If you decide not to continue in the program, too bad, there aren't any refunds.
Another popular debt settlement scam is one in which the company tells you that your creditors have agreed to the repayment plan and they haven't even been contacted. Or the settlement company has sent a letter to the creditor telling them the payments are being held in a trust account and have to reach a certain balance before they'll be paid. The consolidation company comes up with a monthly payment that the consumer pays them every month. A good chunk, as much as $50 to $100, goes to the settlement company as service fees. The money is held in a "trust" account until the balance reaches a certain level.
The consolidation company then pays the creditor. But if the creditor hasn't agreed to this plan, and most won't, they can continue to collect on the debt through whatever means legally available.
This type of plan could only make matters worse, because most creditors will not wait that long to receive full payment. In all likelihood, they could still take you to court.
Be aware that debt settlement is not the same thing as debt consolidation, or debt counseling.
Tuesday, September 30, 2008
Why Use a Debt Consolidation Company or Service
Facing a mountain of debt? Consider using a debt consolidation company or service to aid you in rectifying situation. As the unemployment rate and the cost of goods and services continue to rise, more and more people are choosing this option.
A debt consolidation company does just that ... consolidates your unsecured debt into one payment. This makes it much easier to keep track of things.
Instead of issuing checks to several creditors each month, you simply issue one payment to the debt consolidation company. In turn, they distribute agreed-upon payments to creditors.
hen you work with this type of company they will contact your creditors on your behalf. They have the ability to negotiate with them, in regard to lowering your interest rates and removing fees for things such as late payments and over limit balances.
The majority of creditors are willing to negotiate because they would rather recoup some money rather than no money at all. This also will help to ensure that they will not have to take you to court, in the future. Doing so, means they would have to pay for their own legal representation.
In some cases a debt consolidation company can lower your payments, up to 50%. This means you will pay off your debt in half the time, saving hundreds and even thousands of dollars in interest alone.
There are Internet-based debt consolidation companies that will work with you in the comfort of your own home. You can easily fax required documents and make your payments online.
A debt consolidation company does just that ... consolidates your unsecured debt into one payment. This makes it much easier to keep track of things.
Instead of issuing checks to several creditors each month, you simply issue one payment to the debt consolidation company. In turn, they distribute agreed-upon payments to creditors.
hen you work with this type of company they will contact your creditors on your behalf. They have the ability to negotiate with them, in regard to lowering your interest rates and removing fees for things such as late payments and over limit balances.
The majority of creditors are willing to negotiate because they would rather recoup some money rather than no money at all. This also will help to ensure that they will not have to take you to court, in the future. Doing so, means they would have to pay for their own legal representation.
In some cases a debt consolidation company can lower your payments, up to 50%. This means you will pay off your debt in half the time, saving hundreds and even thousands of dollars in interest alone.
There are Internet-based debt consolidation companies that will work with you in the comfort of your own home. You can easily fax required documents and make your payments online.
Wednesday, September 24, 2008
Double Your Living Space With Outdoor Garden Rooms
Garden Rooms are an extension of your living room; and of course dining room, bedroom, and family room. A small house can seem to have doubled in space when the backyard, side yards and front yard are divided into livable areas each with a specific purpose.
If you're buying a new house that is in the process of being built decide now what the priorities are for your outdoor spaces. For example if entertainment is high on the list you'll need a level patio for dining with ample room for tables and chairs. Evening lighting extends the usability of the area well into the night. The dining room shouldn't be too far removed from the kitchen as getting the food to the area while it's still hot will be a challenge.
The first task is to measure the yard and draw a scale map. Include any trees, fencing, slopes or terraces. Note which way the yard faces. A yard facing the west will need some shade area from the brilliant late afternoon sun. A north yard has the advantage of shade but will be considerably cooler in the Spring and Fall months.
An automatic watering system cuts down on chores and can actually conserve water when it's preset. No forgetting to turn the lawn sprinklers off and flooding the garden. More than one station is efficient for watering different zones. Trees may only need to be water once very 10 days to two weeks while a perennial border needs at least an inch of water on a weekly basis. Two, or more, watering stations make it possible to accommodate both.
House builders can install the pipes needed for a watering system at the same time the plumbing for the house is installed. And they can provide for outside lighting as well. If you're considering a natural gas powered fireplace for evening fires it can be installed at the same time as the gas for the home's heating system.
If your home is custom built, expanding the plans to include the outdoor rooms shouldn't be a problem. And even if your home isn't being custom built, your house builder can lay the foundation for a backyard patio at a more cost effective rate if it's done at the same time as laying the foundation for the house.
After you've decided on your backyard priorities and have your scale map, sketch out where you would locate major hardscape features such as a gazebo, play yard for children, water features, and patios. Establish a budget for each feature and for the yard as a whole. Remember you don't have to complete the entire yard at once.
Flexibility is important. You may have your heart set on a huge swimming pool and then find out that since you have children, the pool will have to be fenced even within your own backyard. Or that bedrock may prevent excavation of a pool without expensive blasting.
If you're buying a new house that is in the process of being built decide now what the priorities are for your outdoor spaces. For example if entertainment is high on the list you'll need a level patio for dining with ample room for tables and chairs. Evening lighting extends the usability of the area well into the night. The dining room shouldn't be too far removed from the kitchen as getting the food to the area while it's still hot will be a challenge.
The first task is to measure the yard and draw a scale map. Include any trees, fencing, slopes or terraces. Note which way the yard faces. A yard facing the west will need some shade area from the brilliant late afternoon sun. A north yard has the advantage of shade but will be considerably cooler in the Spring and Fall months.
An automatic watering system cuts down on chores and can actually conserve water when it's preset. No forgetting to turn the lawn sprinklers off and flooding the garden. More than one station is efficient for watering different zones. Trees may only need to be water once very 10 days to two weeks while a perennial border needs at least an inch of water on a weekly basis. Two, or more, watering stations make it possible to accommodate both.
House builders can install the pipes needed for a watering system at the same time the plumbing for the house is installed. And they can provide for outside lighting as well. If you're considering a natural gas powered fireplace for evening fires it can be installed at the same time as the gas for the home's heating system.
If your home is custom built, expanding the plans to include the outdoor rooms shouldn't be a problem. And even if your home isn't being custom built, your house builder can lay the foundation for a backyard patio at a more cost effective rate if it's done at the same time as laying the foundation for the house.
After you've decided on your backyard priorities and have your scale map, sketch out where you would locate major hardscape features such as a gazebo, play yard for children, water features, and patios. Establish a budget for each feature and for the yard as a whole. Remember you don't have to complete the entire yard at once.
Flexibility is important. You may have your heart set on a huge swimming pool and then find out that since you have children, the pool will have to be fenced even within your own backyard. Or that bedrock may prevent excavation of a pool without expensive blasting.
Friday, September 12, 2008
When Should You Consider Bankruptcy?
If you are in midst of a financial crisis, bankruptcy is just one option. There are no set in stone rules when it comes to filing. Everyone's situation is different and must be analyzed on a case-by-case basis. Keep in mind this final action will follow you for at least 10 years and perhaps longer. While it falls off your credit report, many loan applications ask if you've ever filed for bankruptcy. Court records are open to the public and many are easily electronically accessible.
Of course your credit report will reflect your financial actions and as such will affect your ability to get insurance, loans, and perhaps even employment.
If you are questioning the possibility of filing for bankruptcy, there are several things to mull over before making your final decision.
If you have a good job that provides you with a steady income, you are probably not the best candidate. You should seriously consider modifying your lifestyle in order to begin paying back your debts. The judge has the option of dismissing a case if he feels there is adequate income for re-payment, over a specified time period. This is especially true if the majority of debt is credit card related.
The court will review your income, assets, and debts before allowing the action to be finalized. If the judge feels that you could pay off your debts by selling assets or cutting back on expenditures your request may not be granted.
With the recent changes in the law, filing is quite expensive. If your case were to be dismissed, you would be out hundreds of dollars that could have been put toward your debt.
Many credit counselors will tell you that you should other actions first. They recommend selling items such as jewelry, electronics or even antiques and using the profits to pay down your debt.
They also recommend getting a second job, if at all possible. Of course, not everyone's schedule can accommodate this option, but if you have time the additional income will probably go a long way when it comes to paying off your creditors.
Bankruptcy will not allow you to keep assets that have been secured by a loan. The asset, such as a car or furniture, will have to be surrendered to the creditor. Some debt such as back child support and student loans won't be forgiven. You'll still owe them.
Whether or not you file for bankruptcy is the personal decision. Consider your options carefully, before making your final move.
Of course your credit report will reflect your financial actions and as such will affect your ability to get insurance, loans, and perhaps even employment.
If you are questioning the possibility of filing for bankruptcy, there are several things to mull over before making your final decision.
If you have a good job that provides you with a steady income, you are probably not the best candidate. You should seriously consider modifying your lifestyle in order to begin paying back your debts. The judge has the option of dismissing a case if he feels there is adequate income for re-payment, over a specified time period. This is especially true if the majority of debt is credit card related.
The court will review your income, assets, and debts before allowing the action to be finalized. If the judge feels that you could pay off your debts by selling assets or cutting back on expenditures your request may not be granted.
With the recent changes in the law, filing is quite expensive. If your case were to be dismissed, you would be out hundreds of dollars that could have been put toward your debt.
Many credit counselors will tell you that you should other actions first. They recommend selling items such as jewelry, electronics or even antiques and using the profits to pay down your debt.
They also recommend getting a second job, if at all possible. Of course, not everyone's schedule can accommodate this option, but if you have time the additional income will probably go a long way when it comes to paying off your creditors.
Bankruptcy will not allow you to keep assets that have been secured by a loan. The asset, such as a car or furniture, will have to be surrendered to the creditor. Some debt such as back child support and student loans won't be forgiven. You'll still owe them.
Whether or not you file for bankruptcy is the personal decision. Consider your options carefully, before making your final move.
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