This tip is a valuable financial lesson that many people can implement, and it can completely transform their financial situation. Typically, people tend to wait until the last minute to pay their bills, which results in late payments, late fees, and extended loans. The goal with this is to develop the habit of scheduling your payments to be automatic. IF you have already missed a payment in the past, this tip is even more important for you. By scheduling your payments automatically, you are making the dedication that the money will be in the account by the time the bill needs to come out. This, at the same time, if properly managed, can help direct your entire attention on paying your bills on time, rather than purchasing something out of instant gratification. Also, by showing lenders that you have set up automatic payments, it shows a level of dedication towards fast credit repair.
If you are considering using a debt relief or debt consolidation company, arm yourself with information. For a fee, they negotiate with your creditors on your behalf, resulting in lower balances or interest rates. Legitimate debt relief companies will obtain a written agreement from each one of your creditors, detailing the terms of the agreement, your obligations, and what will be reported to the credit bureaus. In some cases, if your balances are lowered the creditor might report bad debt or a charge-off, which will negatively impact your credit history and score. Also keep in mind that debt relief companies generally charge higher interest rates than your bank or mortgage lender, particularly if you have less than stellar credit. So you might not save much in the long run, especially once you factor in fees. It’s up to you to do the math.
Your credit score (often referred to as your FICO score) provides a snapshot of your credit status. It's determined by a variety of factors, and obviously, you need to understand the components that affect your credit score before you can start to repair it. Although the exact formula used by the Fair Isaac Corporation, which compiles the score, is proprietary and not publicly disclosed, here's basically what it looks at, and how each factor is weighed:
Taking out a loan to pay off debt is counter-intuitive, right? Especially when taking on a new loan requires hefty fees, rolled into your total balance, or a long repayment period. The InCharge Debt Consolidation Alternative, or debt management plan, is a program that gives you all of the benefits of debt consolidation without having to take out a new loan. With the debt management program, all of your payments are consolidated into one monthly payment that you pay to InCharge. InCharge then pays each of your creditors. InCharge helps you secure lower interest rates on many of the credit cards you do have (with exceptions), meaning that more of your monthly payment will go to pay off the balance, and less to interest. This will help you pay off your debt faster. The InCharge debt management plan is designed to help you get out of debt in 3-5 years, paying less than you would if you continued on your own, or even with traditional debt consolidation with higher interest rates.
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Although the number of bankruptcy filings since 2005 seems high, not everyone decides to file bankruptcy to deal with their financial issues. There are other options for consumers who find themselves unable to pay off their debts and facing multiple collections actions, and those other options might be a better choice for some consumers. These options include:
A home equity loan might be a good option for you. If you’re looking to find a loan, LendingTree (the parent company of MagnifyMoney) might be able to help. With its online marketplace, you’re able to use one form to potentially be matched with up to five offers at once. First choose the type of property you need the home equity loan for, such as a condo, single family home or a townhouse. Then finish completing the form by adding your personal information and you’ll instantly receive offers available to you.
If you've already used up your free credit reports for this year, you can order your credit reports directly from the credit bureaus for a fee. The bureaus all offer a three-in-one credit report that lists all three of your credit reports side-by-side. The three-in-one credit report costs more than a single credit report, but less than the combined price of purchasing your individual credit reports.
There is still one way to legitimately get your credit fixed fast, usually within 7 days and many times within 3 days. This fast method of credit repair is called “Rapid Rescore” and is ONLY available to mortgage companies. The rapid rescore program was created for the mortgage industry to use when clients had legitimate easily solvable disputes. Examples of some of the easy disputes typically had to do with the timing of updates. For example if a client had recently paid down a balance, received a higher credit limit or resolved a dispute in advance and is in possession of such proof. They can use this proof, submit it to the broker or loan officer who in turn submits it to their “local” credit bureau. The update is manually verified with the creditor, updated, then rescored. The hope and desire is that the client will have a higher credit score due to the changes and qualify for a better rate.
No one can legally remove accurate and timely negative information from a credit report. You can ask for an investigation —at no charge to you — of information in your file that you dispute as inaccurate or incomplete. Some people hire a company to investigate for them, but anything a credit repair company can do legally, you can do for yourself at little or no cost. By law:
The Walmart® Credit Card offers a three-tiered cashback program to benefit avid Walmart shoppers. You receive 3% cash back on Walmart.com purchases (including purchases made on the Walmart app), 2% back on fuel purchases made at Walmart or Murphy USA (excluding Murphy Express) gas stations and 1% at Walmart & anywhere your card is accepted. Your cash back will be issued monthly as a statement credit for all earnings during that period. Note: This card can only be used at Walmart Stores, Walmart Supercenters, Neighborhood Markets, Walmart.com, Walmart and Murphy USA Gas Stations and Sam’s Clubs.
Since a good portion of your credit score is based on your ratio of debt balances versus your total available credit (called Utilization Rate – and about 30% of your score), a great way to improve your Utilization without paying down debt is by requesting a credit line increase. Simply call each of your credit cards or revolving debt holders and ask them if they’ll increase your total credit line. If and when they do so, your credit utilization ratio will automatically improve, and your score will rise accordingly. For instance, if you owe $5,000 on a tradeline with a $10,000 limit, your utilization ratio is at 50%. But if this same creditor increases your available credit to $15,000, your ratio instantly sinks to 33% – which is far closer to FICO’s ideal ratios! You may be able to achieve this with a simple phone call (and some convincing), and the worst they can say is “no.” Either way, it’s not requesting a new tradeline or opening new credit so your score will never go down.
“Credit repair leverages your legal right to three standards: Credit reports must be 100% accurate, entirely fair, and fully substantiated,” Padawer said. “Too many lesser credit repair companies skip over those last two standards — which involve communicating with your creditors — in favor of depending upon simple credit bureau disputes by themselves.”
The Capital One® Secured Mastercard® offers qualifying cardholders a lower security deposit compared to other secured cards. You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness. Typical secured cards require you to deposit an amount equal to your credit limit, so this card has added perks for people who qualify for the lower deposits.
They may be willing to waive some of the late penalties or spread the past due balance over few payments. Let them know you're anxious to avoid charge-off, but need some help. Your creditor may even be willing to re-age your account to show your payments as current rather than delinquent, but you'll have to actually talk to your creditors to negotiate.
If you recognize the account but believe the information being reported is not correct, you should reach out directly to the financial institution that reported the information. For example, if you recognize the credit card, but do not recognize the late payment - speak with the credit card company. Often the bank or credit card company can fix the issue and update the credit bureaus directly.
A debt consolidation loan streamlines existing debts into one new loan. Most unsecured consumer debt can be consolidated, including credit cards, medical bills, utility bills, payday loans, student loans, taxes and bills sent to a collection agency. Having one monthly payment instead of several can make it easier to get your finances in order and could allow you to save money on interest fees. When shopping around, it’s essential to find a loan with a lower interest rate and better terms than the original debts.
If you have impossibly high interest on those credit cards, then do cancel them. It doesn’t help to have open credit cards if the interest rate makes it nearly impossible for you to get the balance down. In fact, banks currently have hardship programs, where they will reduce your interest rate TO ZERO if you agree that they will cancel your cards. Yes, you wll take an immediate hit on your credit score, but that will quickly improve as you pay down your credit cards, which you can now do because you don’t have those usurious interest rates to pay.