What to Do When the Debt Collection Calls Start
With so many people deep in credit card debt, losing their jobs, and falling behind on their credit card and mortgage payments, the debt collectors that work for the credit card companies are going to be calling you just about every day from morning till night trying to collect payments. So what do you do about them? Do you avoid them? Do you answer them? Do you change your number? Just how do you deal with debt collectors and debt collection calls?
One popular tactic that you may have heard of is to send a cease and desist letter to your creditors to tell them to not contact you by phone. For many years this tactic was effective but it should no longer be your first line of defense. When you send a cease-and-desist letter to your creditors you stand out amongst all the other consumers who are behind on their payments and you make it seem like you know what you are doing. In many cases the creditor will flag your account for more aggressive debt collection and possibly lawsuits.
Whereas if you stay under the radar and just take the debt collection calls you will not stand out and just will be like credit card company and start the debt negotiation and debt settlement process because you are smart consumer and want to use debt negotiation to settle your debts instead of bankruptcy or other options.
So how do you deal with the collection calls when they start at eight o’clock in the morning and do not end until 8 PM at night or later? Well for one you do not ever answer a debt collection call live. You have them leave a message to call you back and then you call them back when it’s convenient for you. They are going to be calling you five, 10, 20 times a day there is no way you can answer each one of those calls or would you want to. You have enough stress already with finding money to pay your bills that you don’t need to have more stress by answering 10 debt collection calls a day.
I would recommend you get a prepaid cell phone or a second cell phone line and give this number to your creditors to call. Remember to only contact your creditors from this new number because they can track any other number you call them from. Make sure you turn the ringer off on this new phone so you won’t hear the calls either. Make sure you delete all the other numbers from your profile so they will only have this number to contact you.
This will provide you with much needed relief from debt collectors. This will allow you to deal with them on your own terms when you are ready. If they ever do leave a message make sure you check it in a timely manner. You also want to be proactive about staying in touch with your creditors and debt collectors. Do not avoid them because this can make the situation worse.
Credit Card Debt Management Tips – How To Consolidate And Eliminate Bad Credit Debt
Credit card debt management is something that many American consumers are struggling with. The average American has over 8 credit cards in their wallet and paying them back on time each month can be a real challenge if you don’t have a good system in place. This article will teach you how to combine all your credit cards into one payment and also eliminate thousands of dollars in interest over the years.
If you have several high interest credit card bills then one of the best credit card debt management options is debt consolidation. Debt consolidation allows you to combine all your high interest credit bills into one low interest payment. Basically the consolidation company will pay off all your debt and then you will be paying them back with a single monthly payment at a lower interest rate. Just a few points in lower interest can result in saving thousands of dollars over the course of the payback period.
While this probably sounds like a great option for credit card debt management, there is a significant tradeoff. You will have to back up the consolidation loan with a large secured asset typically your home. Therefore if you ever were to default on that new loan you could end up losing your home.
If you are struggling to pay your bills each month and are going through a financial hardship then debt settlement might be the better option. Those that qualify for a debt settlement are able to eliminate 40-60% of their unsecured debt on average while paying back the rest on a payment plan or in one lump sum. This is seen as the best alternative to filing bankruptcy and only those people with a financial hardship should apply.
Debt settlement is seen as a legitimate alternative to filing bankruptcy. If you have over $10,000 in unsecured debt and are experiencing a financial hardship then a debt settlement can make financial sense. Check out the following link for a free consultation from a certified debt relief specialist in your area.
Debt Consolidation
Are those past due bill collectors calling? Is your current Job not paying enough money, therefore you are unable to stop the calls by making payments towards you debts? Weary about trusting a company to help you solve your debt issue without costing you more money?
With the current state of the US Economy and lack of substantial paying jobs more and more people are finding it difficult to get out of debt whether it is from school loans, credit cards or health related debt. Many companies provide a “Solution”, but at what cost can and will this solution be attained?
There are several options to solving debt issues, and which option is best for you? On a beginning note if you are a person with a debt of $5,000 or less the likelihood that a Debt Consolidation or Debt Settlement program would not be the best choice. In addition if you have no collateral or payment towards the start of the Debt Consolidation or Debt Settlement process then perhaps a different approach would be best such as Bankruptcy or a co-signed loan with a constituent who has a higher credit score to eliminate or lower the interest and provide a low monthly payment.
Although there are several options to solving Debt, there will be effects to your credit score. This effect on your credit score will depend on whether you consolidate or Settle your debt. Paying attention to the two different means of eliminating your debt could be the solution to solving your debt with the least stress.
Debt Settlement means you will agree with the loaning company to make on time and recurring payments towards paying off your debt in a speedier time frame (say 2-5 years depending on the amount of the loan). Also in settling your debt you can attain a letter from the settlement company in case you need to secure a loan of monies. One of the pluses to debt settlement is that with paying off your debt, you also begin to build and repair your credit score at the same time.
Debt consolidation entails taking out one loan to pay off many others. Often this is done to secure a lower interest rate or secure a fixed interest rate. Debt consolidation can range from a number of unsecured loans into another unsecured loan, yet mostly involves a secured loan against an asset that serves as collateral (most commonly a house, car, etc). Collateralization of the loan allows a lower interest rate than without it. In collateralizing; the asset owner agrees to allow the forced sale i.e foreclosure of the asset (car, house, etc) to pay back the loan owed. So therefore the risk to the lender is reduced while the interest rate offered is lowered.
Sometimes although rarely debt consolidation companies discount the amount of the loan when the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount and this is a reason debt consolidation is often advisable when a debtor is paying off a credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank and with debt consolidation the interest rate again will be either lowered or fixed and in a very good case both.
Now these two means are differentiated we now discuss the savings. Many cases prove that a savings of 50-65 percent of what’s owed by the debtor. Some cases in the USA & Canada have proved a savings as high as 85 percent. Usually the savings accrued to the debtor will be a payment of half or a third of what’s owed to the loaner keeping in mind the history of the debtor such as payment history currently established, types of creditors you have, how delinquent the debts are, what type of purchases the debts are for, your current financial situation, and what state you live in are taken into consideration when either consolidating or settling your debt.
We know you have a debt, we know the means to solve the debt, and we understand the savings that can be achieved in eliminating your debt. Now we must know what actions not to take in eliminating your debt. What not to do would be to not take yourself deeper into debt by making more credit purchases. Cut up those credit cards, throw away those loan applications. The worst thing you could do is to get yourself into more debt or run your credit score numerous times. Second and more important on what not to do is to rush into a settlement or consolation deal with a un-researched debt settlement company (in many cases recommended by non-experts or those novice to the field), some of these recommendations and solutions actually caused people worse financial hardship and forced them to file bankruptcy, which is the worst possible mark for a person’s credit standing.
An Alternative To Short Sales For Upside Down Homeowners
If you are the one of the approximately 20% of American homeowners that is upside down on their mortgage, meaning you owe more than your property is worth, a new program known as Principal Reduction may be just what you’ve been waiting for.
A Principal Reduction, unlike a loan modification which is only a temporary reduction in the interest rate a homeowner pays, is a permanent reduction in the outstanding loan balance owed. This program is offering upside down homeowners a way to stay in their homes and erase the negative equity the American nightmare of the past few years has cast them into. Whereas a short sale will destroy your credit and get you a potentially hefty tax bill for the “forgiven” debt, a Principal Reduction program will do neither. There is no negative impact on a homeowners credit rating and the reduction in principal is not recognized as income from a tax perspective.
Upside down homeowners who owe at least 25% more than their property is currently worth and can provide full documentation for their income can qualify. The homeowner must also have a Debt-to-Income ratio of 50% or less based on the new lower monthly mortgage payment. Debt-to-Income is based on a homeowners monthly gross income versus their debts, items that show up on a credit report (credit card payments, auto loan payments, student loans, etc).
The program is funded by a $5 Billion dollar hedge-fund that is essentially involved in a large scale Note Purchase program. The hedge-fund buys large groups of Notes, all of which are upside down homeowners, on what is known as the secondary market. The hedge-fund gathers Notes from clients across the country and leverages the portfolio to buy the entire group of Notes at a substantial discount to current market value. Due to the fact that an upside homeowner is likely to walk away from their property in the near future, the banks are often accepting these offers in order to rid their books of these potentially toxic assets. The hedge-fund then adjusts two items on the existing Note. The outstanding principal balance is reduced to 95% of current market value and the interest rate is changed based on the homeowners credit quality. In the end, the homeowner receives a permanent reduction in their principal balance, often to the tune of a few hundred thousand dollars, and the hedge-fund makes a profit on the difference between the purchase price and the new 95% of market value principal balance. A true win-win scenario for everyone. Even the banks walk away ahead as they have now rid themselves of future foreclosure risk and have the influx of capital to put to work in their business, which is lending. Homeowners who are disenchanted by the loan modification process and restrictions placed on them and want to stay in their homes, rather than just walk away from their property, or be forced into a short sale now have a viable option which appears to be far superior to either.
The economic recession has not only made things a nightmare for home owners, it has also made life hellish for people that have large credit card debts and have fallen behind on their payments. president Obama is trying to provide some relief these people by trying to get his bailout bill passed. Never before in our credit card history era has there been a bill like this that has been proposed, but is it enough? Lets take a closer look at it in detail to find out.
There are many people that owe so much on their credit cards that it seems like they will never pay it off. The Obama bailout bill will not erase any of the principal amount that is owed on any of your cards but it is designed to help lower interest rates to a more manageable level , and it does this in several ways. If you have fallen behind on the monthly payments of your by just a few months, the credit card companies will raise your interest rates into the stratosphere. The proposed bill says that for instance you decided to start repaying your bills and do it for a full six months you can regain the old interest rates that were there before you started missing your payments. This is a great compromise proposal as it takes into account the good faith efforts of the responsible credit card holders and treats them on a case by case standing. Another benefit to this bailout bill is that it would prohibit the companies from increasing interest on your past buys on one condition: that you are not late on those payments by 60 days or more.
Now once you have started to repay your monthly payments again for 6 months it does not stop there, because lenders can revaluate you again every 6 months after that so you should not let your guard down just because you have gotten past the first 6 month hurdle.
In closing, while I still think some of the principle should be shaved off, this is still a pretty good bill as it gives credit card debtors some breathing space to collect their thoughts and give them enough incentive to start paying again instead of trying to go through the bankruptcy route which will ruin not only their FICO score but any chance of borrowing any more money later on.
Everyone is hoping it will pass in a week or so, and if it does pass it will be one of the most monumental moments in credit card history.
Can You Fight Charges on Mortgage Fraud?
If one of the booming industries then is real estate, the recent financial meltdown has brought the said industry to its knees. This is probably the reason why there has been a recent increase in the number of mortgage fraud cases. The surprising thing about these cases, however, is that more than half of them were borne out of a collusion between a borrower and a mortgage industry insider.
There are many ways by which mortgage fraud can be committed. This could include income and employment fraud, reverse mortgage fraud, phantom help, identity theft, short sale fraud, bait and bump, equity stripping or skimming, lease buy-back, and house flipping.
Oftentimes, in mortgage fraud cases, the victim may not be as innocent as they seem. This is usually the case when the borrower pockets the extra money without looking into where the money came from. In cases like these, mortgage industry insiders who should have known better can be held accountable.
In order to keep yourself from becoming involved in a mortgage fraud case, you have to be vigilant. If you think the deal is too good to be true considering how much you are making in a month, then it probably is. If you are not sure whether to trust the real estate agent you are talking to, ask for a license. Dealing with a licensed individual can give you more assurance that he has lesser chances of “tweaking” any information that you give.
You should also make sure that you do not sign any blank document or documents where important information has been left out. If there are clauses in the document that is not clear to you or you do not understand, never hesitate to ask the agent for a thorough explanation.
Be wary of people offering you loan modifications services. If they do not have the necessary license, are asking for a direct access to your bank accounts, or are requiring you to make an upfront payment, do not deal with them.
In case, even after you have taken all the necessary precautions, you still find yourself facing a mortgage fraud case, one of your best options would be to find a lawyer knowledgeable in handling mortgage fraud cases. As soon as you get wind that you might have been implicated in a mortgage fraud case, you should get in touch with the Department of Financial Institutions. You should also gather as much evidence as possible to prove that you are innocent.
Reverse Mortgage Loans
There are a lot of myths dancing around about Reserve Mortgages these days. It seems that most people think that if you’re age 62 or over and need money to help pay for home improvements or a cruise to the Bahamas, a reserve mortgage is perfect for such desires – not so! Reserve mortgages were created with a very specific purpose in mind.
What is a reverse mortgage?
A reverse mortgage loan is a federally insured private loan for senior homeowners that enable those over the age of 62 to translate a portion of their home equity into cash. In dealing with reverse mortgages, no repayment is necessary until the homeowner decides to sell the home, decides not to use it as the principal residence, or dies. In case of death, the home is sold or refinanced by the inheritors to pay off the mortgage and the remaining equity is given to the heir.
Reverse mortgage purpose:
A reserve mortgage loan was created with one purpose in mind: to help seniors on a tight budget obtain money for living expenses. This type of loan is specifically for helping those seniors who may lose their house otherwise, or not be able to buy food or pay medical costs. The cash obtained from a reverse mortgage can be paid all at once in a single lump sum of cash, as a regular monthly cash advance, as a credit line account, or as a combination of these payment methods.
Disadvantages of a Reverse Mortgage
A disadvantage for those seniors using a reverse mortgage loan for frivolous spending is that if they are ever in dire straits, which is the purpose of the loan, they may have already dissolved their home’s equity. Another disadvantage is that unless one is expecting to stay in their home for at least five years, reverse mortgages are not very beneficial. Up-front costs are very high and unless one is certain that they will be in their home for over five years, the benefits are close to none.
Using a Reverse Mortgage for Need
The benefits of a reverse mortgage are straightforward: If medical bills and climbing expenditures are making it difficult to live day to day, and one is planning on staying in the home indefinitely, then it is the perfect way to obtain extra cash to keep afloat, without the hassles of an extra monthly payment.
Credit Card Debt – How Consumers Can Legitimately Eliminate 60% of Their Credit Card Debt
Credit card debt is one of the most popular crises in America with so many cards and their unlimited facilities. People forget to keep a count on their cards with these offers. These companies lure people with various attractive offers and bonanzas all throughout the year. It has been found that n America alone, people use plastics for almost all their monthly expenditure. This increases their dependency on these cards. Usually they keep around 7-8 each. This increases the liability. The credit card debt mounts incessantly until finally they end up losing track of their bills. This is the time that maximum credit issues crop up.
In these situations, instead of panicking for your irresponsibility, try and sort out some plan so that your credit amount reduces. There are methods whereby cc holders can legitimately eliminate 60% of their credit card debt. Always remember that if you try to give up your card by settling with the debt consolidation company, this will have an impact on your credit score. Do not listen to suggestions offered by some lay people who might misguide you on many terms. Always seek an authentic and reliable debt management source so that you do not fall prey to false promises.
The ongoing severe liquidity crunch has done added blunders to all the Americans. Settling the debts as early as possible is one of the prior responsibilities of all citizens. However, many are unable to pay the debt. Here comes the debt management cell. However, the bailout package offered by the government has come to your rescue. This financial support of the government towards the credit card companies allows them to be flexible enough to settle the debts. The card holders are required to pay only a certain percentage of the entire credit card debt. The rest of the money is not required to be paid. Often this way the card holders legitimately eliminate 60% of their credit card debt.
You should keep in mind that if you have more than $10,000, you will be entitled for debt settlement. Do not consult a debt settlement company directly. It is always better to seek the help of those companies which are associated with some kind of a debt relief network. Some of the top-notch companies have the ability to erase your debt problems in a hassle-free way and legitimately eliminate 60% of their credit card debt. Before seeking the advice of such a debt relief organization, you must note whether the organization has a transparent and proven track record.
The debt relief network is allied with various debt settlement companies. Hence, contacting a debt relief network always assures you of legal elimination of your over-burdened debt miseries and makes your future secure.
Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the legitimate debt services. To compare debt settlement companies it would be wise to visit a free debt relief network which will locate the best performing companies in your area for free. Click here to visit our recommended services.
Denied Mortgage Refinancing? Here is Help
Many homeowners are trying to refinance a mortgage. However, with such a bad housing market and economy, some people are getting denied. Here is some advice what to do when denied a mortgage refinancing, and how you can get approved.
Many homeowners, on top of not having good credit, also have seen their home value drop, or are facing other financial hardships. This is preventing many people from getting help refinancing a mortgage. However, there are some things a person can do to help increase the chances that they will get their mortgage refinancing application approved. Here are some tips that can help nearly any homeowner get help, and approval, when refinancing a mortgage.
Know Why
You should know why your home loan refinancing application was denied in the first place. Mortgage lenders and banks are reporting that up to 33% of all applications for mortgage refinancing are being denied. For the most part, in this housing market, most of the rejections are due to problems with the home or the current mortgage and not due to the homeowners finances. Often times, in such a bad housing market, homeowners owe more than their home is actually worth, or have a bad debt to income ratio. These are both big problems that can easily lead to getting rejected when refinancing a mortgage.
After a Mortgage Refinancing Denial
Homeowners who have been denied should not give up. Instead, take control of your situation, understand the reason for rejection, and work on that issue to get the mortgage refinance approval you need. While it may be disheartening to see that your mortgage refinancing application has been denied, do not take it as a personal attack on you.
Gather yourself together, and look into a few crucial things that may help you get the approval you need. One of the absolute first things you should do is obtain a copy of your credit report. This can be gotten for free, and is a major key in figuring out why you were denied, and what you can do to get approved. Carefully review this credit report and all associated financial documents you have. Check them for errors and mistakes which can cost you money, or get you denied a mortgage refinancing. A lot of people find minor mistakes which can easily be overlooked but result in getting a mortgage refinancing denial letter.
Another thing that you may be able to do that would drastically increase your odds of approval is correct your loan to value ratios. This simple means paying down as as much and many credit cards and debts as possible. The less debt you owe, the more “free” money you have every month. Mortgage lenders and banks look to ensure that a homeowner makes more than enough money to make the monthly mortgage payment. Having a lower debt to value ratio on your existing debts can dramatically increase your chances of getting approved for a mortgage refinancing.
In Conclusion
Many people are talking about how hard it is to get mortgage refinancing right now due to a bad housing market and tough economy. However, that is not true at all. In fact, getting help with a mortgage refinancing is probably easier and better for more homeowners than it ever has been before. Homeowners who have been denied a mortgage refinancing need to brush it off, and regroup. After you have reevaluated your application, turn it in again. This time though, you will know why you were denied, and have taken appropriate action to right the problem. This will help you get approved for a mortgage refinancing.
2009-2010 Mortgage Interest Rate Predictions
Predicting mortgage interest rates can be tricky. We do have some good information to work with though and make a good prediction. Here are my 2009 and 2010 mortgage rate predictions, and how I made them:
Early in 2009, home mortgage interest rates were around 4.69% for a standard fixed rate 30 year mortgage. These were some of the lowest recorded interest rates in history, and homeowners across the country saw the low rates and took advantage by refinancing or loan modification. Mortgage lenders and banks became flooded with applications from all types of homeowners, and had to do something to slow down the massive amount of paperwork that was piling up. A mortgage rate increase of .5% took effect around May of 2009, which was expected. I thought this would happen as a way for mortgage lenders and banks to catch up with the already filed applications.
This rate increase was minimal enough to still allow truly struggling homeowners a chance to refinance, but enough that homeowners just looking to save money, with no real financial hardships, held back on applying until rates were lower again. This rate of 5.19% is still low enough to help homeowners save themselves form defaulting on their mortgage, or being foreclosed on and losing their home. This is still a good rate to refinance or get a home loan modification. So right now, a typical 30 year home loan will have a 5.19% fixed interest rate. This is where my predictions come into play.
I predict that mortgage interest rates will again be lowered to their prior lows of around 4.69%. This will be sometime around the middle of October this year and should last until April 2010. October of this year will be just about when mortgage lenders and banks catch up with the prior applications, and be ready for a new wave. If you can wait a little you should, however if you are risking your home or finances, take action now.
Be very very careful when it comes to the issue of how to avoid paying credit card debt, because there is a very significant number of fraudulent companies out there that will have no hesitation about exploiting another person’s misfortune and financial woes for their own personal benefit. They will provide too good be true solutions to the struggling credit card owner, that will do nothing more than land the credit card owner is hot water with the law. If you REALLY want to avoid having to pay credit card debt, then the best piece of advice that you will come across is (start dramatic drum roll now)….be financially responsible, live within your means and ensure that you avoid exacerbating current debt with additional loans.
I cannot stress the importance of ensuring that the full balance on your credit card is paid in full each and every month. Why? More than simply ensuring that you keep yourself organized, paying off the full balance means that no interest will accumulate or be charged to your credit card whatsoever. Too many of us have a nasty habit of impulse buying, meaning we splash out on things we cannot afford currently, and pay for on credit. Ensuring that you only ever charge what you can comfortably afford is another excellent way to ensure that you stay in the black, and do not need to worry about heavy interest rates.
If you have managed to get yourself stuck in credit card debt hell, then you may want to consider a debt settlement program which is whereby a professional 3rd party will negotiate with your creditors on your behalf, to ensure that both you and the creditors can reach a mutually equitable and agreeable solution to the outstanding debts. Debt settlement programs can also mean that a percentage of the initial capital sum is slashed.
Discharging Credit Card Debt Or the Recent Credit Debt Stimulus Package?
Can you really benefit from discharging credit card debt?
Discharging credit card debt was a very big subject in the 1990s because many companies claimed that they were able to dispute the amount of money that you owe to your creditors and get your debts erased. However, there are now new laws that state that you have to have “old” debt in order to experience any discharging of credit card debt in your finances.
Something that has recently come upon the American public is the credit debt stimulus package that gives Americans freedom to be able to discharge money that they owe to their creditors. This is the fastest way to paying down any of your credit debt.
In a recent survey, Americans are said to make 3 to 5 purchases every day with their charge cards and all these purchases could have been made with cash, but a charge card was used because it offers convenience.
This type of convenience has caused people many problems with their personal finances because this “convenience” can slip out of control as many Americans have now realized. In the past you were not able to make a charge per purchase unless you had five dollars that you were spending. But now, you can go out and buy a $.99 soda just with your wrist.
Discharging credit card debt is partially available with the new credit debt stimulus package. Many creditors in the past have been discharging credit card debt but it was only when their credit report was negatively affected that they began to look for other ways of wiping this debt clean. Going to credit debt stimulus package can lets you take advantage of the billions of dollars that was given to the American public and help wipe out your debts.
Click here to get a free debt relief rate quote on all your unsecured loans.
2010 Mortgage Interest Rates
Getting the lowest interest rates possible makes a refinance more beneficial for a homeowner. Mortgage rates have been low most of the year. However, I predict things will change in 2010. Here are my mortgage rate predictions for the rest of 2009 and 2010.
While the housing market is in bad shape right now, mortgage rates are low to encourage activity in the market, and help homeowners save their home from being lost. With rates as low as they are, homeowners can usually refinance their mortgage into a better, cheaper, more affordable monthly payment. This helps prevent the housing market from getting worse, and spurs activity and interest in existing home loans, and for new home buyers. However, I do not think the housing market will get any worse than it is right now, and that is why my mortgage predictions for 2010 call for an interest rate hike.
While this mortgage rate increase will not be major enough to seriously discourage homeowners from getting refinancing, they will be noticeably higher. Right now, a typical fixed rate mortgage can be had for around 5.15%. This rate is extremely low, and not too much higher than the lowest rates have been all year. However, I believe that around April of 2010, things will change, and interest rates will rise slightly. I predict that mortgage rates in April of 2010 will rise to around 6.2% due to a recovering housing market, and a promising economy. These mortgage rate increases will represent progress being made in stabilizing home values for homeowner everywhere across the country. Although it seems small, this would represent a lot of money over the course of a home loan.
Homeowners who can, should take advantage of the lowest mortgage interest rates possible when they decide to refinance their mortgage. In my opinion that time is right now, as I predict interest rates to rise. However, each homeowners situation is different, and the time to take action may be too. While there is no proof mortgage interest rates will rise, the housing market has pretty much bottomed out, meaning the only way to go is up. Decide for yourself what is best, but these are my mortgage rate predictions for 2009 – 2010.
Using a Secured Credit Card to Rebuild Your Credit the Right Way
One of the top strategies of many individuals and credit repair companies is to use secured credit cards to repair credit and low FICO scores in addition to laying a foundation that new accounts can be built on. However just getting one of these cards is not enough to quickly boost your scores and help you out, you need to know how to use it the right way to get the most out of it.
How To Use a Secured Credit Card to Rebuild Your Credit
First when you get your card be sure to use it on occasions. Your credit report will list any and all your active accounts last active date and if you never use the card there will be no activity to show and your scores will not rise as much as they could.
When you are using your card to purchase items make sure that the total balance on the card never exceeds 45-50% of the total limit. Once you cross over this number your scores start to drop. In fact
to be safe keep the balance to limit ratio at 30% or lower. Or better yet pay it off in full each month and you will not have to worry about this.
You also want to be sure you never send in a late payment or the positive effects the card is having on your FICO score will be quickly erased. By late I mean 30 days or more late. While you can get away with a few days late you will get charged a late fee by the lender. In order to make sure you do not ever pay late I always tell people to sign up for auto pay with the lender. While not all secured credit card issuers offer this service to their customers many of the do so take advantage of it and safe guard your FICO score!
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How Do You Choose a Trusted Debt Management Service?
If you do not want to negotiate with your creditors personally or you think that you do not have the communication skill to negotiate the terms with your lenders, you might consider hiring a credit counselor to handle the job for you. Debt Management Plan (DMP) might help you from sinking into deep debts, however, how do you evaluate the honesty of a debt management company?
Services offered
Firstly, you need to ask them what services they are providing. Normally, they provide a wide range of services such as credit counseling, money or wealth management, budgeting savings and debt management classes. Before you sign up with that company, make sure that the advisor has discussed with you the personalized DMP which takes your financial situation into consideration. For company which pushes you to sign up with them and requires you to pay a huge upfront fee, you had better opt for other company.
Certified credit counselor
You have to ask them if the consultants in that company are all licensed and certified. They should be well trained to give the best advice to their clients on how to manage the money well. The counselor should spend some time in reviewing your financial status and come out with customized plan which suits your needs. If he or she provides you with brief explanation, you are advised to say goodbye to them earlier.
Formal written agreements
Since the credit counselor is a middleman between you and the creditors, he or she is responsible to handle your account and deal with your creditors on behalf of you. The consultant will be dealing directly with the creditors by negotiating the repayment terms in order to reduce the total debt. As you have given the authority in handling the money to the settlement company, it is important for you to get a formal contract from them. Furthermore, you should ask for official statements from them so that you can check if they have made the payment promptly to your creditors.
Information Security
The company must make sure that all your personal information is safely kept as this information is private and confidential.
How to Settle Credit Card Debt
Settling a credit card debt means getting a creditor or collection agency to accept less than full payment on the debt. For instance, if you owe $1,000, you might convince the creditor to accept $500 as payment in full. It takes time, patience, nerves of steel and a thick skin to settle a credit card debt, but it can save you thousands of dollars you can’t afford.
Instructions:
- Stop making your credit card payments. Companies have no reason to settle with someone who continues to make timely payments. Most credit card companies only settle when they believe that if they don’t make some kind of deal, they won’t see a penny of the money they’re owed.
- Ignore threats. At some point, your account will be turned over to a collection agency that may call threatening to sue you, garnish your wages and take your house or car. Take heart in the fact that most agencies won’t go to the effort and expense of actually filing a lawsuit.
- Make an offer. Many debts are settled for as little as 7 cents on the dollar. Therefore, your opening offer should be no more than 25 percent of the debt. Do not make an offer you can’t afford.
- Expect that your first offer will be refused.
- Use the threat of bankruptcy to keep the company talking. Remind its representatives that if you declare bankruptcy, the company may get nothing. Continue to negotiate until you reach a mutually acceptable settlement.
- Take your time. There is no reason to rush into a bankruptcy. Every day you wait, your debt gets older and harder to collect, and your creditors are more likely to cut their losses.
- Get all deals in writing. Before you send in your payment, make sure that the person who negotiated the settlement with you has the authority to do so. Be certain that the payment you are sending will settle your credit card debt.
Tips & Warnings:
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Some credit counseling agencies and attorneys will help with debt settlement if you don’t feel up to handling the task on your own.
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A credit card settlement will show up as a negative on your credit report, so don’t go this route unless you are truly out of money and options.
Credit Card Debts Facts – Things You Should Know
You finally graduated from college, and just landed a job with a good pay. Suddenly, you find that every credit card company offers you a new card with high credit limit. But before you decide to sign up for any of the cards, take heed of some facts that you should know about credit card debts.
1. Interest rate
Find out and compare the interest rate charged by the credit card companies. Some of them might offer low introductory rates, but take note of the normal rate that applies after the offer period ends. You do not want to end up with high interest rate for a lifetime just because the company offers 0% introductory rate in the beginning.
2. Charges and Fees
You should be aware of the charges that the company would impose. Late charges and extra fees when your outstanding balance is more than your credit limit are only some of the fees and charges that the company would charge you. Always pay your bills on time.
3. Read the terms and conditions carefully
The fine prints should not be ignored totally. Go through the terms and conditions and note any terms that say the company can change the interest rate and credit limit without any advance notice and without the need to explain the reason for the change. If there is any such statement, check if there is any opt-out option given by the company.
4. Maintain good credit report
If your debt is still new, make sure that your debt is paid on time. Late or missed payments will generate bad credit report, not to mention additional charges added to your outstanding balance. This would certainly affect your application for loans in the future. If you have bad credit report, other loan companies might consider imposing higher interest rate if your loan is approved.
The above facts are just some points that you need to take note before you decide to sign up with any of the credit card companies. If you feel confident that you can take charge of your cards use, there is no harm in applying and using one.
Click Here to get further help with your credit card debts and to gain valuable information.
How To Ask Your Bank For Lower Interest Rate On Credit Cards
The Difference Between a Mortgage and a Deed of Trust
Often when someone gets a home loan they call it a mortgage but that is not accurate. A mortgage is not a loan, neither is a deed of trust. To receive a loan a borrower signs a promissory note agreeing to pay back the money under certain conditions.
A mortgage or deed of trust are contracts, which protect the lender’s interests in your property by setting up a security instrument. A security instrument protects the lender against default. If the borrower stops paying then the mortgage or deed of trust allows the lender to foreclose and sell the property to recoup their money. Which state you live in determines whether you use a mortgage or deed of trust.
A mortgage is a document signed by the borrower (mortgagor) and the lender (mortgagee), which creates a lien against the property. Ownership of the property, or title, cannot be transferred until that debt is paid in full and then the lien can be released. Now depending on which state the property is in depends on whether title is held by the borrower or lender during the loan period. If the lender holds the title it’s called “title theory”. If the borrower holds the title it’s called “lien theory”.
If the borrower defaults on the loan, the lender can foreclose on the property. In other words, the lender has the right to sell the property to recover funds. When a mortgage is the security instrument, the lender usually has to go through a court action to foreclose, called a judicial foreclosure.
Though a deed of trust is similar to a mortgage there are important differences. A deed of trust includes three parties: the lender, the borrower, and a trustee. The trustee is a neutral third party (title company, bank, escrow company, attorney, etc.) who holds the title until the loan is paid off.
Once the loan is repaid the trustee reconveys the property to borrower or cancels the deed of trust depending upon state law.
If the borrower defaults on the loan the trustee starts the foreclosure process and while the trustee must follow state law regarding foreclosures it stays out of the court system. Since it stays out of the judicial process, foreclosures can be quicker, less expensive, and less complicated. The deed of trust conveys “power of sale” to the trustee in the event of a foreclosure giving the trustee authority to sell the property to repay the lender in accordance to the contract.
Be careful not to confuse deed with deed of trust. A deed conveys title to and ownership of the property. A deed of trust is a contract by which the lender can secure the loan in case of default.
The main differences between a mortgage and deed of trust comes down to the third neutral party in the deed of trust and how a foreclosure is handled. You do not get to choose if you use a mortgage or a deed of trust. State law determines that.
By Craig Meriwether
