Fast Fixes for Your Credit

I found this great article called 7 Fast Fixes for Your Credit Score on a blog called http://www.youstyle.com/. Here are the basics, with a dab of my own flavor.

Know the score: If you don't know your own credit score, you really don't know what you can get credit for. This includes a car, a house, even a job. You can fix this by getting your free credit report - yes absolutely free.

The Fair Debt Collections Practices Act gives you the right to get your free credit reports at http://www.annualcreditreport.com/.

First, the article suggest that you "Pay down your credit cards. Paying off your installment loans (mortgage, auto, student, etc.) can help your score, but typically not as dramatically as paying down — or paying off — revolving accounts like credit cards." I agree with this point.

Second, Use your cards lightly. Enough said.

Third, the author warns you to "Check your limits. Your score might be artificially depressed if your lender is showing a lower limit than you’ve actually got. Most credit-card issuers will quickly update this information if you ask." This is good advice.

Fourth, Dust off an old card. The older your account the better. A long history with timely payments - even the minimum, will help you increase your spending limit's if your available balance to too low.

Fifth, "Get some goodwill. If you’ve been a good customer, a lender might agree to simply erase that one late payment from your credit history". I disagree on this point. The likelihood of you getting some goodwill is slim and it is a waste of time, effort and hope.

Six, Dispute old negatives. "Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as “not mine.” The older and smaller a collection account, the more likely the collection agency won’t bother to verify it when the credit bureau investigates your dispute." I agree with this point, but only so far. Be careful with trying to file to many disputes with a credit bureau. In fact, it's best to dispute only one account at a time with the credit bureaus. If you try to do dispute too many accounts at the same time, you could be accused of trying to get out of your financial obligations by filing a "Frivolous Complaint". If this happens you may be banned from filing any disputes with the Credit Bureaus. It is important to only dispute one account at a time.

Seven, wage war on negative and inaccurate information. The author states, and I agree that "your credit score is calculated based on the information in your credit report, so certain errors can really cost you."


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Credit Card Default

If You Miss One Payment, You’ll Pay For It - BIG TIME

Credit Cards are not all bad. I know that you’ve been in a needy situation that your good ‘ol Credit Card has bailed you out of. I know I have. Maybe you’ve been at the mall and a ’Cutie’ asks you “would you like to apply for this really awesome card“? For the heck of it you reply, “what the heck, I might get approved“. Then you get approved and you’re like, “what the heck?“

Congratulations, you’ve got the card. The Cutie his happy and approving of you on a personal level. Feel like you are in the Credit Card Elite. You feel really good about yourself. You are credit worthy. You’ve got instant Cash on a card.

You’re only going to pay a small amount of money to use the card. At least that is what the ‘Cutie’ told you. You think it was something like “0% interest until September or October 2008″?. Anyway - cool, you’ve got credit. About a week later, the card comes. You’ve already spent some of the balance in your mind.

Along with the card came an upscale brochure telling you about all of the benefits of using the card. The brochure is glossy and has a nice shine. You read the front and back of the brochure. Next you see your Credit Card Agreement and it’s a bunch of “blah blah blah”. Terms and conditions - ”blah blah blah”. You know that if you pay your credit card bill on time you won’t have any problem.

Then the unexpected happens. You use your credit card to pay for this unexpected situation. Your minimum payment goes up but it’s not too much to handle. You continue to pay on time - every month. Then something unexpected happens again. This time, you cannot make your credit card payment on time, but it you can still make it by the end of the month. By then it may be too late.

You missed your Credit Card Payment by only one week. Now your 0% interest rate has skyrocketed to the “Default Rate” of 24.24%. If you can’t make all of your Credit Card payments on time, for at least six months, your debt will continue to grow at the Default Interest Rate. You say to yourself, “what the heck, I’ve been making my payments on time for months but my bill is still getting bigger“. You are in what I call the ‘Default Dungeon’.

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Debt Relief: Helping yourself is the Best Method

The fraud and abusive practices of credit repair organizations, is so bad that the Federal Government has had to amend The Consumer Credit Protection Act to protect American consumers. The Consumer Credit Protection Act.

I recently resigned from a debt elimination company, because I saw first hand, how client account’s would sit in file cabinets, untouched, for months. The company doesn’t contact many of the client’s creditors, while the client’s credit card accounts collect dust, and interest in large filing cabinets. Many of this companies clients, never hear from the debt elimination company, after signing their contract for services. In the meatime, debt collectors harass the client’s on thier cell-phone at work and at home.

While working at this debt elimination company, I settled hundreds of accounts and saved my clients thousands of dollars on all kinds of debt. Although I did good things for my client’s, I realized that the consumer is their own best weapon, for the elimination of their own debt.


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WARNING!

WARNING!: Debt Companies that Offer Escrow Accounts Will Grow Your Debt

Today, I was talking to a young New Yorker who has large amounts of credit card debt. He was ultra the ultra competitive type. Do you know the type of guy I’m talking about? If you say ”I saved the world today” he will have to one-up you and say “I saved the universe twice today”? Well he was that type of guy.

We got to talking about credit card debt and I told him that many of my clients have a lot of unpaid credit card debt. Of course, Mr. Ultra Competitive had to one-up my clients. He replied, ”I bet they don’t have as much debt as I do”.

The thing that made my ears perk up was when he stated that he knew about this hot new debt elimination program.

He said “what you do is make a small monthly payment, to the company and they put your money into the their ’escrow account’ then the company your pays your debt out of the escrow account.

I replied "debt elimination via 'escrow account' is one of the new rip-off's in America.

For one, the debt elimination company usually requires you to pay a fee usually 15% of your overall debt.

Second, the debt elimination company doesn’t pay anything until you have a “reasonable settlement amount” in your escrow account. Meanwhile, you are paying them and they are not paying anyone.

The problem that I have with these escrow elimination companies, is that they lead (or mislead) you to think that once you put your money into the companies escrow account, your bills will be paid out of a pool of funds. These so called escrow debt eliminations companies, lead people to think that they are pooling their money in with the companies money and that their bills will be paid, with the company’s money,
This concept is a big rip-off. Do not fall for it

The Smart Debt Consolidation Blog, helping Americans get out of debt one click at a time.