This is a guest post:
If you’re in the market to take out a new line of credit, you must be aware of the extreme importance of your credit score. Your credit score is nothing but a three-digit number that is there in your credit report. With a good score, it is more likely that you’ll be able to take out a loan with an affordable interest rate. There are many people who have committed various credit mistakes and have tarnished their credit score. This is the most possible reason for the lenders turning down their loan offers. Most financial experts opine that one should initially go for credit repair before taking out a loan so that they may settle on the best loan in the market. If you go for professional debt help, it is possible to boost your credit score but not all debt relief options boost your credit score. Have a look at the ways in which you can boost your credit score through various debt relief options.
Debt consolidation firms – Do they help you in augmenting your credit score?
When a person is tired of handling his multiple credit card debts and the outrageously high interest rates associated with them, he can opt for debt consolidation. Debt consolidation is just bundling your payments into a single monthly payment so as to facilitate the debt repayment procedure. However, the first thought that comes to the minds of the debtors who opt for such debt help firms is whether or not this will tank their credit score.
Debt consolidation as well as debt management does not hurt your credit score as much as you may think. It will only be mentioned in your credit report that you’re repaying through a debt consolidation or a debt management firm and this will, in no way hurt your credit score. Once you start making timely payments on your credit card accounts through the debt consolidation or the management firm, you can start boosting your credit score thereby.
Debt settlement firms – Is it harmful for your credit score?
Well, just as opposed to debt consolidation and debt management, debt settlement can tarnish your credit score to a great extent. When you opt for debt settlement, you don’t repay the whole amount that you owe your creditors. Your debt consultant will negotiate with your creditors and waive off a portion of the principal amount that you owe them. Since you’re not repaying the whole amount, this will hurt your credit score and you can feel the negative impact each time you go to take out a loan. The better your credit score is, the more will be the negative impact on the score.
Therefore, if you’re keen on saving your bucks while taking out a new line of credit, make sure you have an exceptionally good credit score. If you don’t, take the needed steps to repair your credit score and then apply for a loan. Get assistance from professional debt help companies and improve your score in the long run.
You see their commercials on tv all the time, with the incredibly catchy tunes. Many people feel that FreeCreditReport.com is just a scam site, and that they don’t really give you what they advertise. I’m going to let you know a little more about how they work, as well as what to expect when you sign up.
When you sign up for FreeCreditReport.com, you are required to enter in your credit card information. This might seem odd, since you’re supposed to get your credit report for free, however this is where most people are misled. What is happening is that you are signing up for a free trial of their monitoring service “Triple Advantage”. While you are subscribed to it, you are able to get your credit reports for free. This is how they’re able to advertise it the way that they do.
Now, if you need to use a credit monitoring service, then you might consider signing up for their service. Since FreeCreditReport.com is owned by Experian, they also provide you with your Experian Credit Score for free. You’ll have to remember that this score isn’t your FICO score, which is used by the banks and credit companies for determining your credit worthiness. It’s still a good thing to know, however, because it does a decent job of giving you an idea on how you are doing with your credit repair. The biggest advantage is that they monitor your credit for you, alerting you to any changes that will impact your credit. They will also let you know if there is any possibility of identity theft occuring with your credit.
Overall, they provide a great service, however I’m not sure if the price is worth it. I don’t know the exact price that they are currently charging, but if this is something that you’re looking for, then you should definitely check them out. Just make sure you do your research and know what you’re signing up for before you do it. If you want to know how to access your credit reports for free without signing up for any service, then enter your name and email address in the upper right. I’ll walk you through all the steps you need in order to get your credit reports and repair your credit. What’s it going to cost, you ask? Nothing, just sign up and you’ll start getting the helpful emails.
I would like to discuss Payday Loans today. If you’re like most people, you’ve been in a situation where you’ve thought about getting one of these, but are unsure of whether you should or not. I’m going to tell you right now, I do not like Payday Loans at all.
Here’s some background; My wife and I got in a little financial trouble a couple years ago, and thought that borrowing from one of these Payday Loan or Fast Cash places would help us out. Actually, it helped us out a ton, for about a week. For the next 8 months, it helped the loan company out even more. Because we borrowed the max amount of $445, we had to pay back $500 for each loan. The worst part of it, though, was that we didn’t make the extra $500 to be able to pay the loan back completely and pay all of our bills AT THE SAME TIME. This is the killer right here. If you’re already strapped and can barely get by, then a Payday Loan is the absolute worst thing you can consider. We kept having to borrow $445 and pay back $500 every 2 weeks, just so we could pay back the loan. It was costing us an extra $110 every single month for that $445 that we initially borrowed. It finally took a bonus from work to be able to pay it off completely and not look back.
When you are thinking about a Cash Advance Loan, you don’t think about the fact that it will most likely take months to be able to pay it off for good. Yeah, the $55 seems like an ok fee to get you out of a bind, but really, really, consider it. If you’re planning on getting enough money to pay it back and have enough to pay all of your bills, then go ahead. A Payday Loan would actually be ok in that situation, if you don’t mind the enormous fee that you end up paying. If you are barely getting by, however, then go another route. A Payday Loan will only put you even more in debt, and can be extremely difficult to get out of. Seriously think about it, and if you are most people, find a different way to get the money.
I’m sure that most of you have heard something about Lexington Law, and have wondered if you should consider hiring them to help you repair your credit. While a lot of people might consider them a scam, in reality they don’t exist to scam you. What they do, however, can be very secretive about what they offer. I’m going to give you an overview of what they actually do for you, and let you know the biggest secret of them all. Keep reading to find more.
For a one time $99 setup fee, and $39 per month you can sign up for the Lexington Regular plan. In this plan, they will happily assist you with disputing an unlimited number of items on your credit reports. They don’t say what type of disputes they will send, though. This comes into question when you preview their next option.
Their second plan is a $99 setup fee and $59 per month option that is called the Concord Standard. In this plan they agree to send Goodwill Letters to help attempt to remove some of the smaller late-pays that may be on your reports. They will also offer to ask a creditor for complete documentation and verification of an account that is on your report. This is recommended for seriously late accounts. Finally, they also offer send a Debt Validation letter to attempt to remove accounts that are Charge-Offs and Collection Accounts. Now, I’m pretty sure that if you’re considering using their services, you’ll at least be in this condition, with some seriously late accounts, as well as a charge-off or two. While the first plan may sound like a good deal, there’s a great chance that it isn’t going to suit your needs at all.
Plan #3 is called the Concord Premiere plan, and is available for a $99 setup fee and $79 per month payment. In this plan they provide everything that you get in the other plans, as well as offering a credit monitoring service on top of it. They will look at your report each month and tell you how you can use your credit better to increase your scores. They also let you know when any changes are made to your credit reports. On top of that, they allow you to dispute Inquiries that are on your credit reports. Then, if that’s not enough, you get a $25,000 Identity Theft insurance policy. Wow, it sounds like you’re really getting a great deal here, especially for only $79 per month. Keep reading, though. This is where it gets good.
They try to make it sound like they’re doing a lot for you, especially with the Standard and Premiere plans. If you go to their website, you’ll see how they have all these attorneys ready to help you repair your credit. You can even go online to let them know which items you want to dispute.
What they don’t tell you, though, is that you can do every single bit of that process yourself, for a fraction of the price. In fact, some of it can even be done over the phone or online. You never know how long it will take to remove some of the negative items, and they’re counting on it taking some time. That’s why they implement the monthly payments. They’re hoping that they only end up getting a few items removed at a time, causing you to keep having to pay them month after month. I’m going to tell you how you can do each piece of their process on your own. If you choose to sign up with them, at least you’ll be more informed.
Filing A Dispute: Filing a dispute can actually be really easy. If you are disputing personal information, such as a name or an address, then that can be done over the phone or online. If you are disputing an account on your credit report, you will get better results if you file your dispute in writing, instead of doing it online. It is also best to do it in writing because then you have a paper trail in case you need it for anything later. If you want free information on how to file a dispute, then just enter your name and email address in the box to the upper right and I will send the process straight to your email.
Disputing An Inquiry: I don’t know why this is offered only on their “Premium” service, because it is extremely easy to do. All you have to do is call the credit bureau and tell them that the person who did the inquiry did not have your permission to check your credit report. This can also be done through a simple letter, too. You just have to let them know that you didn’t give them permission to pull your credit and you should be able to have them removed. ** This is important ** : Do not start disputing all of your inquiries on your account at once. If you are doing this to repair your credit, then only dispute one or two at a time. Then wait for a few weeks before doing it again. If you start naming off a bunch of inquiries to dispute, then it is very likely you could have your report frozen and flagged for fraud and identity theft. You do NOT want this, because then you have to deal with just one more thing. Besides, the inquiries don’t affect your credit score as bad as the negative accounts that are on there.
Debt Validation: This is a very easy concept, but it is quite powerful. There are many Collection Agencies out there that simply buy up old debt or even try to collect on debts that they don’t even own, and then purchase the debts after they have collected. When you send a debt validation letter, you are requesting that they send you proper proof that they are allowed to collect on the debt. If they do not send this proof, then you are not required to pay them a dime. On top of that, they are not allowed to put anything on your credit report. If they do not send you adequate proof as stated by the FDCPA, then every time they try to collect after that, or every single update to your credit is counted as a violation and you can take them to court. Most of them don’t want to go to court, because it could open up investigation into their shady business practices, so they will simply comply with your request to remove your file and remove the account from your credit. There is also a method that is a little more consistent that you can use here too. It’s called the 1-2 punch, and will be explained at a later date through this site or you can learn about it earlier by signing up in the form at the upper right.
Credit Score and Report Monitoring/Advice: You probably don’t realize it, but you can get the same thing at several places online for MUCH cheaper. I currently get the same thing from TrueCredit at $9.99 per month (may be $14.99 per month now), but FreeCreditReport.com offers it, as well as many other places. I will get a page up with links to several businesses online that offer this, as well as their prices.
Identity Theft Insurance: Here are 2 places that provide great Identity Theft protection for as low as $10 per month, and back it up with a $1,000,000 guarantee. That sounds a little better than a $25,000 guarantee now, doesn’t it?
Lifelock is a company that specializes in securing your identity, no matter who knows your social security number. They have become a trusted name in Identity Theft Prevention, and have very reasonable plans for individuals, as well as families.
TrustedID is very similar to Lifelock, without all the commercials. They aren’t as well known, but they provide what appears to be the same level of service when it comes to protecting your identity. I think they even offer the first month free.
I highly recommend you check out either of these two companies if you’re concerned about protecting your identity.
As you can see, there is absolutely nothing that Lexington Law will do to fix your credit that you can’t do yourself for MUCH cheaper. It’s up to you how much you choose to educate yourself about credit, and who you decide to give control of your financial future. Would you rather pay a bunch of money to have somebody else hack at your credit, hoping that they will get things done quickly and not drag it out for months and months? Would you rather take the bull by the horns and try to do it yourself? There are people of all ages and backgrounds repairing their own credit, so there’s no reason that you can’t do the same.
If you prefer to do it yourself, then read more of this site and learn more. I also recommend signing up in the upper-right form so I can send you step by step instructions on how to take action and start repairing your credit today.
If you want to learn it all right away, then I highly recommend the Credit Secrets Bible. This thing is packed full of great information and is a MUST READ for anybody trying to rebuild or repair their credit.
A Utilization Ratio is the ratio that is found by comparing your entire credit card balances with your entire credit limits. If that doesn’t make sense yet, keep reading. Imagine that all of your credit cards combined have a credit limit of $30,000. If you use your cards and add the balance of each one together, you have a combined balance of $3,000. This would give you a utilization ratio of 10%. If, by chance, your combined balance was only $300, then your utilization ratio is only 1%.
What value should you be striving for? Well, it’s a subject that many people debate, and few can give absolute proof on a certain number. What is generally agreed, however, is that it should stay between 1% – 10%. This means that your credit card balances help your credit out the most when they remain between those numbers.
Now, you’re probably wondering how having a balance of 1% is better than having a balance of 0%. To be honest, credit card companies don’t care to extend credit to people who don’t use the credit cards. In fact, if you monitor your credit score, you’ll probably notice that it drops in the month after you pay off all of your cards. Then, the next month if you carry a balance, you’ll notice that it may jump back up a few points.
Your credit score is a way to determine how well you manage credit, and your credit risk. If you never use your cards, or pay them in full every month then people don’t have any incentive to give you more credit, and they can’t accurately determine how well you manage it when you are actually using it. The banks are in it to earn money, and you’re not giving them any, so they look past you and onto the next person. If you aren’t comfortable with carrying a balance, then by all means, pay it off and continue with your routine. If you are comfortable with carrying a balance, then keep it low, and consistent.
In the end, you should notice your score rising little by little because of this. No, it’s not a quick increase like you might be hoping for, but it’s a small piece in a very large puzzle.