Category: Credit

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Settling Credit Card Debt On Your Own

No one wants to borrow money from anyone because once the debts start piling up it becomes difficult to manage them in a short while due to which the International Debt Collection management can really make things worse where you have to keep running from pillar to post to clear loans where simply borrowing another loan to pay off the first one is too humiliating to face.

When you’re overwhelmed by debt, paying a company to help settle your credit card bills may seem like an expense you can avoid. It’s natural to wonder, “how can I settle credit card debt by myself?”

And it is a great question. Wanting to settle your debt for less than you owe obviously makes the most sense if done in the most cost-effective manner possible. There’s tons of advice out there regarding debt settlement. Some of it is useful but dangerously incomplete. And some of if it is just plain old bad and should be avoided.

Here is a basic plan for settling credit card debt for less than the principle amount owed.I’ll discuss some key concepts to this plan and shed some light on how the process works. First, let’s clear up a couple of things…

The Truth About Settling Credit Card Debt On Your Own

It’s NOT as easy as you may think and there are plenty of pitfalls to avoid. It requires significant time to do the process, it’s not a simple call to a collections agency. You must document, communicate, negotiate, and follow up when settling credit card debt

Don’t expect to be able to simply talk a collection’s agency into settling for 10% of your debt over the phone. If you are negotiating on your own, 60% is a much more reasonable and attainable goal.

Generally, most people to choose to try to settle credit card debts on their own are able to do so for 75%. However, the real professionals are able to negotiate debt settlements as low as 10%. But this is because they are able to invest significant time into the process and they know exactly what they are doing.

It is not uncommon for people to have no success at all getting any reduction of debt when they try to do it themselves — some can’t even get a break on double-digit interest rates. Unfortunately, folks such as these either remain in debt for life or must reach out for professional assistance.

Attorneys and arbitrators, the common professionals hired to negotiate debt settlements average around 50% and then charge around 15% for their service fee putting the total cost around 65% of your total debt.

So, how are they able to settle your debt for 10-50% of the original total? The secret lies in the volume of debt that the professionals represent. You see the professionals deal with the creditors every single day; they are dependent on each other. And when a professional approaches a creditor representing millions of dollars in debt from many clients, he’s able to negotiate what is effectively a “bulk discount.” By representing and being able to guarantee cash for a larger segment of the creditors receivables, a professional is able to gain significant leverage saving his clients big time.

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What Is The Best Way To Fix A Bad Credit Rating

Millions of Americans have blemishes on their credit files that prevent them from getting auto loans, mortgages or credit cards. Unfortunately many people in their efforts to improve their credit fall prey to unscrupulous credit repair scams. The truth is that it is almost impossible to remove accurate negative information from a credit report.

Correcting past credit mistakes and improving your credit score takes time, commitment and effort and can easily be accomplished by paying your bills on time and following the following steps.

When you want to get a car, then you should apply at Title Loans Florida site. There is the availability of the best loan with the less interest rate. An improvisation in the credit score will increase the chances of getting a loan. The paying of the bills is possible from the site to have the benefits.

Start by focusing on getting installment loans paid on time every time. Installment loans are loans with fixed interest rates and are normally associated with big ticket items such as home loans, autoloans and student loans. .These types of loans are weighed more heavily than the credit cards when calculating credit scores.

Your goal is to pay these accounts on time and never be more than 30 days late making a payment for at least the next year to qualify for auto loans/credit cards and for the next two years to qualify for a mortgage.

Determining who gets paid when for credit score/rating purposes is as follows:

Student Loans, Mortgages and Auto Loans Credit Cards and other revolving debt, Non-reported debts such as utilities and cell phones

Non-reported debts will not show as late payments on your credit report – however, if you do not pay them or make alternative payment arrangements within 90 days, they will go into “collection” and will then show up as a bad debt on your credit report.

If you have open collection accounts on your credit report, almost all lenders will want to see them cleared up before they lend you money. Collection accounts also hit your credit score hard when they are new, you can see your credit score drop up to 100 points if you have one account in collection.

Generally, the only exceptions made are for medical bills, most lenders tend to over look these types of collections and will not required them paid off.

Paying off accounts that are in collection takes some planning , start with the most recent accounts first these are the ones that affect your credit score the most. Always contact the collection agency directly and attempt to negotiate a lower payment. Almost every collection agent out there will take fifty cents on the dollar -or less- if it means you can pay the account off now.

Negotiate with your creditors to get the best deal you can by telling them you only have X amount and can send it now, there may be some back and forth, and you may have to speak with the collection manager. Once you have negotiated a deal, always have the collection agency send you the deal in writing before you send any money. If you do not get the deal in writing before you send the money there is an excellent chance that the collection agency will just deduct the funds from the amount you owe and tell you that that they have no record of the deal and that you owe the balance outstanding on the account.

Once you have paid the account, save a copy of the deal and a copy of your cancelled check. After 60 days obtain a copy of your credit report to ensure that the collection agency updated your file. In most cases they usually fail to update your file and you will have to send a copy of the deal to the credit reporting agency. They will update your file and the debt will show on your credit file as “Settled for less than full amount”. This makes no difference to your credit score though, as far as your credit score is concerned the debt has been settled.

Keep in mind that a bad debt will “fall off” your report in 7 years. They no longer report it after that time. If the debt is close to the seven year mark do not pay it off, rather use your money to pay down your credit card debt.

Credit Card debt looks best on your credit report when it is paid on time and the account has been open longer than one year. The amount owing on any credit card should not be more 30 percent of the credit limit. For example if you have a credit card with a $5000 credit limit you should never owe more than $1500 on the card..

Any extra cash should be used to pay bad collection accounts, then pay down your highest balance credit cards then pay down your installment loand

None of these things will save you money. These are merely tactics to quickly improve your credit rating. Then you can worry about how best to use your money.

Huge thing to remember: check your report for incorrect items. Any lender who has denied you credit must legally provide you with a copy of the report they used to turn you down. Usually this is in the denial letter somewhere with 800 number to call credit agency to get report.

Finally, if you have to declare bankruptcy you should be aware that the bankruptcy will hurt your score badly for the first couple of years, there is nothing you can do but wait that out. Each lender has a different criteria for handling bankruptcy. It will usually be easier to get a mortgage than a credit card or auto loan after a bankruptcy. Bankruptcies will fall off your credit report in 7 years, too.

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Credit Repair Services: What To Look Out Fo

A lot of these credit repair services or credit fix services do nothing more than take your hard-earned money and then proceed to do what you can do yourself. That’s if you’re lucky. Some will take your money and do nothing at all.

The best way to repair your credit is to see where you are first in terms of your credit and thereafter checking out Blue Water Credit for more help. Order a copy of your credit report from the three credit bureau agencies. This gives you a chance to see what debts you have and which are not paid on time.

Bad credit can stay on your credit file for as long as seven years depending on the severity. If you have a charged-off an account which means you did not pay on this account for as long as 4 to 6 months, this will remain on your file for seven years. How do you know if it is charged off? In some cases, it will say it right on your credit report, (Charged off). Another way to tell is with the credit rating.

If you have an I-9 that means the account has been charged off. So the “I” means this was an installment loan such as an automobile loan, or a loan for furniture or appliances. Installment loans mean you have monthly payments (equal monthly payments with the exception of the first or last – sometimes), and you have an assigned date when this loan will be paid. Maybe you took out a car loan for 60 months or five years. You know in five years, assuming you make all payments on time your loan will be paid off. So you know what the date is.

When you have an R-9 that means the account has been charged off as well. The “R” means this is a revolving account such as a credit card, or a gas card, or a department store account, such as Macy’s, or Target, or Wal-mart. When you make purchases on revolving accounts you don’t know what they payoff date is going to be, unless of course, you pay your balances in full every month. However, if you have a balance of $3,500 with an interest rate of 18% and you pay the minimum payment every month you really don’t know when this account will be paid off. Of course, there are computer programs that will compute this for you. However, the point is these are revolving accounts. Your balance revolves from month to month.

The best way to clean up your credit is to start making payments on your debts. Anything you have not paid on for a period of seven years should fall off your credit report, with the exception of taxes owed, child support, student loans, and government-related loans, or tax lien judgments. These will always stay on your credit. If you did not pay on a credit card for seven years this will indeed fall from your credit report after that time has elapsed.

If you have something on your credit report which is not yours and you have no knowledge about it whatsoever, then you need to send in a letter to the credit report agency to dispute it.

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