Archive for January, 2011
It is possible to control your debt, rather than have your debt control you. Take those reins. Be the one in charge. The first step is debt negotiation. You don’t know what it is, much less how to do it? Let’s talk about it.
Credit cards are great – at least for the first couple of swipes. Then you get the bill. Like most of us, you’re probably struggling with: How am I going to pay that bill? And so, you don’t. And the bill gets higher and higher. Until it’s so high that it’s overwhelmingly astronomical. The minute the bill becomes too much to handle, it is time to call on the expertise of a debt negotiator or consider any of the offers for debt consolidation loans. If you had never thought about calling in a debt negotiator, don’t feel alone. Most people don’t even know such a profession exists.
If you know about the profession and if you are ready to make the phone call, I’ve listed a few handy pieces of information that you should know:
1. When you call, you should have a list of the current amount you owe each creditor, as well as the interest rate that each creditor demands. Be honest. Unless you give the negotiator the correct information, he or she will be hindered during the negotiation process.
2. Keep your financial records. The money you spend with your credit card and the money you send to your creditors. These expense records will help you understand how you spend money. After all, it isn’t the creditor who got you into debt, but your spending habits. The creditor, merely, gave you a tool with which to bury yourself in your own debt.
3. Know that most creditors, including credit card companies, want you to be in debt. It is not in their financial interest to negotiate a settlement with you. However, most lenders understand that if they don’t negotiate, there’s a chance that they might not see any return on their money. After several phone calls, they usually give in to the notion of negotiation.
4. Don’t beat around the bush. If you want something from your debt settlement company, ask for it. The company will either be able to give you what you want or point you toward a company that can.
5. Follow your vision. It’s more than important stick to the agreement (between yourself and the debt negotiator). If you set up a payment plan with a creditor, don’t default or make a late payment. It doesn‘t look good for either the debt negotiator or you.
With all this good advice, you must remember that debt negotiation won’t keep you out of trouble forever. You MUST change your spending habits – no if, and or buts about it – spending got you into this mess; it’s time to redefine what spending means in your life. Hopefully, you can stay out of this mess.
Is your credit score below 600? If it is, you have bad credit. Lenders might deny you loans because you are considered “high risk”. If they do qualify you for any of the loans for people with bad credit, they will most likely charge a high interest rate. So how does one begin the journey to fixing poor credit?
When was the last time you checked your credit score? It’s good to check every six months – the report (without your score is free once a year and you have the option of arguing whatever point is on the report that might be hurting your score. However, you should know that if you check your credit score “too much”, you could lower your credit score.
Bad credit can be blamed on several things. First and foremost, you should look at your own spending habits. Do you but a lot on credit? Do you have high limits AND high totals? Have you made a late payment? Most people don’t realize that late payments can influence their credit score.
Is it possible to fix a bad credit score? Yes. However, it will take time. The first step is getting rid of your debt. You don’t have to totally eliminate it. Just lower it a bit so your debt to income ratio isn’t so high. Pay your bills on time and pay a bit more than the minimum payment to your credit card companies. With a little work you move out of bad credit and into what’s considered good credit.
A little known secret: if you know someone with good credit, become an authorized user on one of their credit cards. Then, they’re credit history becomes your credit history. This can be tricky, though, because as an authorized user, you can technically purchase using their card. A person with good credit may not want to share their credit card with a person with bad credit.
With a good credit score (above 600), you can negotiate with some lenders to get a better interest rate. Be courageous and be informed. You never know what will happen until you begin to ask questions.
When an emergency happens – such as a needing to care for a sick or dying loved one, natural disaster hits your town, your much-needed car breakdown, or a tree falls through the roof of your house – is when you need your credit card or other means of going into debt quick. If there’s no wiggle room for the inevitable crisis, you’re in trouble. Better to prepare for the crisis BEFORE it happens.
Good credit is like the ancient city of Rome; neither was built in a day. It takes time and patients to fix your credit. With a good credit you may be able to buy the house or car of your dreams. You will be surprised who will want to lend you money when you have good credit.