Archive for December 17th, 2007
Are you unhappy with the score you found on your free credit report? There are many factors in your debt that may be affecting your credit rating. Credit and debt go hand-in-hand, it is only natural to owe money.
The amount you debt you carry, and the type of debt you carry, can greatly influence the numbers exhibited on your credit report. So how exactly does debt affect your credit score? The two most important factors, the type of debt, coupled with the debt to credit ratio, are significant in the relationship between debt and credit ratings.
The Type of Debt
Holding a diverse range of debt (credit card, auto loan, mortgage, etc.) is actually a good thing when it comes to calculating your credit score. Lenders do not like to see people with too many eggs in one basket. Consider the benefits and shortcomings of each type:
Credit Cards – Credit cards are a tricky form of debt to deal with. On one hand, having a longstanding history of timely payments (higher than the minimum due, or better yet, the full balance) strengthens your credit score greatly. Conversely, if you constantly transfer balances from card to card, you can hurt your score greatly. Having multiple department store credit accounts with balances is another aspect that is damaging on a credit report.
Mortgages – Mortgages give you one of the most valuable commodities which lenders look at – a long payment history. If you buy a house, you will probably be making payments for many years. If pay in a timely fashion, it will establish a solid record and add additional points to your credit score.
Utility Bills – Regardless of your housing situation, as a renter or home owner, you will pay utilities on a regular and on-going basis. While these sometimes miniscule payments seem unimportant, in the long run, they are an important part of your credit score. Usually, the factor surrounding utility bills that will affect you the most is whether or not you pay on time. It is easy to forget payments, or send them in at the last minute, and in the long run, this will be negative for your credit score.
The Debt to Credit Ratio
If you hold a credit card with a $500 limit, and you carry a $499 balance, it means that you are utilizing 99% of your available credit. This available credit limit, in relations to your available balance, is known as the debt to credit ratio; and having one that exceeds 50% is not favorable in the eyes of most lenders. If the same $499 balance was carried on a card with a $5,000 limit, the debt to credit ratio would only be 10%. This is a much more impressive number in the world of credit reporting. Carrying high balances on your credit cards will lower your credit score, especially if you have multiple cards with very high balances.
Consider what types of debt you are carrying, and how the debt is allocated (i.e. if it is all on one credit card, or all in past due utility bills). Look for a careful balance between these areas, and you may start to see improvements in your credit ratings. Also, many of the free credit report offers found online include tools to calculate and monitor these items. For a more simplified look at your reports, visit www.annualcreditreport.com.
December 17th, 2007
The amount of consumer debt in the Untied States is simply staggering. Individuals and families all across this country struggle everyday just to make ends meet. For many the answer to their money problems is implementing a debt management program that gives them the opportunity to build a sound financial future.
Once you start managing your debt you will see exactly why you have as much debt as you do and how it is affecting your monthly budget. What you find when you start the process can be quite an eye opening experience, because most people really have no idea where their money is going each month. Probably the most difficult part of this process is just getting started, but by using a few of the tips in this article hopefully we can point you in the right direction.
The first step of your debt management program is to list out all your debt. That\’s right, get a pencil and piece of paper and make a list of all your creditor\’s, the current balance you owe to each, the monthly minimum payment, the interest rate, and how much interest you pay them each month. Add up each column and look closely at the results. If you are struggling to pay your bills and make ends meet what you see could very well be the reason. Like most people most of your monthly cash is probably tied up paying on all that debt. What if that debt didn\’t exist, how much cash would that free up every month?
The next step to successfully taking back control of your money is to build a workable plan around a monthly budget to start paying down your debt. Because dealing with money is more of a psychological exercise for most people a good way to do this is to start with your smallest debt first. By paying it off first you will get the satisfaction of quickly paying off something off and keep motivated as you work your way through the bigger debts. Remember to roll the minimum payments of your paid off debts into the next one up the list until you are debt free.
As you implement and follow a debt reducing plan you will also need to be aware of your spending patterns. Paying down debt and becoming debt free can take time and patience and it doesn\’t take much to derail the whole process. This is where knowing the difference between your wants and needs can play such a large role in your success with money.
Look at it this way; you need a car because life in this country pretty much demands it. You don\’t need a $35,000 car with $400 plus dollar a month payments. You may want one but your surely don\’t need one. Apply this same line of thinking to everything you buy and the process will not only be much easier but will also go quicker. And once you are out of debt continue to follow this thinking.
A good debt management program is the key ingredient to successfully getting your financial life back in order. With a proper budget and strategy your money will start working for you instead of against you and you will have the financial freedom we all dream about.
If you are serious about reducing debt and want more information about a Debt Management Program please visit the website Debt Reduction and Consolidation by Clicking Here.
December 17th, 2007
Though Debt Settlement has yet to become fully developed as an industry, there seem to be standards through out the board. Those being, the fees. They all want paid, and it is not cheap. You will spend AT LEAST 12% of your total debt for your average debt settlement company to assist you in settling your unsecured debts. In addition to the continuing late fees from the bank. So the advertisement of 40-60% is not all it is cracked up to be “READ THE FINE PRINT”. O’ Ya, don’t forget to pay your taxes when that 1099c comes from the bank, there is another 14% based on amount saved. So the “SALES PITCH” of 40-60% just fell to 25-15% saved . Well if all they are going to get you is 15-25% why do you need them? You don’t. You need a company that has a track record that produces real debt settlements, with a SOLID guarantee. If they are so darn good at what they do, “and that is what they tell you”, then why pay one dime till the work is done? You don’t pay anything till the car is back and running from the mechanic correct? How about the pool man or the yard man, or even the barber? Are you going to pay before your hair is cut? NO, and you should not pay till your debts are settled.
You might consider looking into a company and you may even find they have good reviews and have even paid thousands of dollars to be a member of some organization. That is meaningless as these organizations have no say in the acts of the company. Most of these organizations are actually run by owners and director of settlement companies . Who’s fooling who?. The BBB, to my knowledge has never been to “ANY OF THEIR OFFICES”, and they can only go on the word of a consumer who may have been ill advised or did not understand the program and or the risk involved do to untrained “sales people” and huge turn over rates. Unless the company is certified and there are STANDARD FOLLOW UP PROCEDURES on a weekly or monthly basis, even the certifications are worthless. Accountability is everything. A simple trophy on a website does not guarantee results.
For those of you that are already in a financial downfall, why create another debt to resolve the problems you already have. You do this as your problems may get even worse off than they are. You pay into a debt settlement company for one maybe two years, and will have paid “THOUSANDS OF DOLLARS” you cant afford, and have little saved for settlement. This does not sound to me like they have your best interest in mind.
In most cases your creditors can and will settle for pennies on the dollar with the right approach. But why pay anything till the work is done and the work is guaranteed? If your willing to prepay the yard man for 3 years, or the lady cutting your hair for the next three years, you should pay for debt settlement before the work is done. Either way your not getting a refund if your not happy with the results.
No debt settlement company can help you unless and until you have money to use for settlement. So till you have these funds, They are simply a mail box for you, and should they stop the calls from the collectors, thats great. Or is it? If the bank can’t call and can’t write, what can they do? They can and in most cases will file suit. Though a law suit is not the end of the world, they are not much fun. They will still settle, but at a much higher rate.
Debt Settlement like many other industries should charge based on results. Unless their real interest is something other than the clients well being why would they not, right? Well, are they digging you deeper in debt? If they do not charge based on results, and actually get paid before the creditor gets paid clearly they are out for their own buck. And from who? The weak, the uneducated or perhaps the ill or elderly or maybe a family who lost a job or loved one. They get paid before the bank? Why?
If your willing to pay for services two or three years before the services are delivered, you have not finished your home work. Have a look at the BBB report of Credit Solutions of America. over 750 BBB complaints!. How many of those clients do you think got a refund when times got even harder, they could not pay for the program any longer. and had to file BK? I think little or NONE!
After over a decade in the credit and finance industry I have developed a Credit Repair company and Debt Settlement company to assist consumers without the risk of being taken for a ride. There are some real good people in the Debt Settlement industry, and there are some real crooks. Watch your step! Watch the guarantee, and if you read the fine print you will see I have the only “GUARANTEE” in the industry that has the clients best interest in mind.
PAY NOTHING TILL THE WORK IS DONE
Tom Bates
CEO Founder, Absolute Debt Solutions Inc.
CEO Founder Absolute Credit Repair Inc.
Tom Bates
toll free 1-877-817-5739
http://www.absolutecreditrepairinc.com
December 17th, 2007
