Are old charge-offs still giving you the blues? (Photo Credit: CC BY/Caitlin Doe/Flickr)

Maintaining good credit can be challenging, particularly after a life-altering event like job loss. Understand that if a creditor throws in the towel and charges off one of your debts, that doesn’t mean that you’re in the clear. It’s quite possible that you will still be liable for that bad debt – even after it disappears from your credit report.

Charge-offs: The light side

Imagine this scenario involving a charge-off on your credit report. While the credit item may say it’s going to drop off your credit report at a certain time, that debt may still have legs because the rules for collecting a debt and the rules for reporting a debt aren’t the same, reports Bankrate. The Fair Debt Collection Practices Act (FDCPA) provides the guidelines for debt collection, while the Fair Credit Reporting Act (FCRA) holds jurisdiction over how a charge-off is reported.

On the plus side, the FCRA mandates that a charge-off must be removed from your credit report after 7 years. That includes whatever debt collection agency owned the debt. Check your credit report about a month after the charge-off is supposed to occur. If the bad debt is still there, dispute it with the three credit reporting agencies: Equifax, Experian and TransUnion.

Student loans, tax liens and Chapter 7 bankruptcies cannot be charged off.

Charge-offs: The dark side

Thanks to the FCRA, bad debt will disappear from your credit report. Unfortunately, the FDCPA makes it possible for debt collectors to pursue your debt almost in perpetuity. As there is a lucrative secondary market that purchases bad debt, there is still cause for concern on the part of the consumer who needs debt repair. Each collection agency will likely try to collect at least once before selling your charge-off.

Can a consumer escape from that bad credit card debt amassed during a span of unemployment? Because there is typically a statute of limitations, the answer is yes. The amount of time in which a debt is subject to collection via the court system varies by state, although it is usually 4 to 6 years for credit cards and 6 to 10 years for installment loans, payday loans or auto loans. Contact your state’s attorney general for more specific information.

Know your debt collection rights

If a charged off debt is past your state’s statute of limitations for collection, it cannot be legally pursued and you can ask not to be contacted against regarding that debt. If a debt collector continues to chase, you may have the option to levy a counter-suit.

Legal action will require time, money and the advice of a lawyer, however. The best way to get out from under a debt collector that is pursuing your debt in a legal fashion is to either pay what you owe in full or come to a settlement.

Sources

Bankrate.com
Equifax dispute form
Experian dispute form
TransUnion dispute form

How to deal with collections

Renters, Experian wants to help you with credit repair. (Photo Credit: CC BY-ND/Christopher/Stumble Forward)

Renters interested in rebuilding their credit scores now have another tool at their disposal, reports The Detroit News. The credit bureau Experian, which acquired the property management database company RentBureau last summer, will begin factoring rental history into credit scores. This move will help scores of consumers, but it may also hurt, experts say.

Millions affected by Experian’s decision at launch

Experian RentBureau, which collects rental history data from property management companies across the U.S. on a daily basis, makes renter data available almost instantaneously through a powerful database delivery system. Before the acquisition, RentBureau had collected up-to-date payment history data on about 8 million renters, a number that is expected to expand exponentially thanks to the new connection with Experian’s database of more than 215 million U.S. consumers. A few million consumers will appear in the Experian RentBureau database at roll-out.

Not only will Experian RentBureau make it easier for consumers interested in credit repair, but it will make the tenant screening process much simpler for resident screeners and property managers, enabling them to better protect their investment. Debt collector recovery rates have also increased through the use of the RentBureau system.

Getting credit for being on time

Experian RentBureau Managing Director Brannan Johnston said the service could help one-third of Americans who rent rather than own.

“It’s a huge thing for those individuals who don’t have a credit history, whether they are a recent college grad, an immigrant or maybe even a divorcee,” said Johnston.

Experian began adding positive rental history data in December, reports The Detroit News. By 2012, the company will also begin uploading negative information regarding evictions and skipped rent. Experian currently has no plans to add late payment data, which is not easily reflected in the company’s credit reporting system, but that doesn’t mean that renters can slack off and expect their credit to get off Scot free.

“If you skip out on your apartment, chances are that the manager is going to turn it over to collection and the collection agency will report to a major bureau,” said Johnston.

The credit reporting industry hasn’t caught on – yet

Credit bureaus Equifax and TransUnion, as well as credit-scoring company FICO, do not have plans to incorporate RentBureau information at this time. FICO spokesman Craig Watts said that once FICO has analyzed RentBureau data internally, the company will make a decision as to whether it should factor in to a consumer’s overall credit score.

Tips for renting without a credit check

In some cases, it is possible for a consumer to rent an apartment without undergoing a credit check. Much like consumers with bad credit who are able to take out short term loans, other methods of evaluating a tenant’s worthiness are available. Ask around. About.com suggests using Craigslist and Sunday newspaper classifieds to find landlords who do not use traditional credit checks. In general, a no credit check rental agreement will need a co-signer and should expect to pay more each month.

Sources

About.com

The Detroit News

Experian

How RentBureau works

Rebuild credit with secured credit cards. (Photo Credit: CC BY-ND/Secured Credit Cards)

When it’s time to apply for a car loan or home mortgage, it helps to have a good credit score. However, all is not lost for those whose consumer credit history has seen better days. Although it can be expensive, using a secured credit card with an initial deposit requirement can help rebuild a credit rating so that large-scale loans are no longer out of reach. Here are some things to consider before applying for a secured credit card.

Know how secured credit cards work

In order to apply for a secured credit card, have an active savings account to serve as collateral for purchases. Generally, the credit limit on the secured credit card will be the money held in savings, although it can be a smaller amount. The card issuer will only take money out if you’re 30 to 60 days delinquent. Once bills on the secured credit card are paid on time for six months to a year, the credit score may have recovered enough to where unsecured credit card options that require no upfront collateral become available.

Issuer must report to the credit bureaus

If the issuer of your secured credit card doesn’t file with the major credit bureaus, the card can’t help you. Showing that you can make payments on time is essential for rebuilding your credit score. Keep in mind that a secured credit card will have an interest rate and grace period, so it pays to shop around for the best terms. Bankrate.com is great for comparison shopping. If you have a savings account that earns interest to go with your optimal-rate card, you’ll be on the road to credit repair.

Watch the fees and spending

Two major but often unavoidable drawbacks to secured credit cards are upfront and annual fees. Ideally, you won’t need a secured credit card for long, so the annual fee won’t hurt much, but the upfront fees can exceed $100 or more. Minimal or no upfront fee is best, but one’s eligibility for such a card will depend upon his or her credit rating.

In terms of usage, try not to use a secured credit card more than you can handle each month. Your goal should be to pay the balance in full monthly and keep total spending at less than 30 percent of the credit limit.

Sources

Bankrate

FOX Business

Rebuilding credit can be an expensive path

Factoring savings into credit scores won the grand prize in a contest for ideas on how to boost a falling national savings rate. Image: CC Bureau of Econoic Analysis/Wikimedia Commons

Earlier this year an asset management company announced a contest for the best ideas to increase the U.S. savings rate. The winner of the $50,000 grand prize suggested a “Savings Credit Score” that factors savings into a person’s credit score. A FICO spokesperson praised the idea but said current credit scoring models made it impractical.

Credit based on saving instead of spending

“Raise the Rate” was a contest promoted on Facebook by TIAA-CREF asking for ideas about how to raise the national savings rate to 10 percent in the next two years. The winning idea was the Savings Credit Score proposed by Johnathan Chan, a 2009 graduate of Northwestern University. By incorporating savings rates into the credit scoring system, Chan told American Public Media’s Marketplace that currently credit scores are based on spending and debt. If savings were factored in, people would be motivated to improve their chances for going to college or buying a house by tucking more money away. Chan’s definition of what would qualify as savings included investing in home equity as well as personal savings accounts.

Can a Savings Credit Score work?

To incorporate personal savings into credit scores, Chan suggested such things as reporting savings on income tax returns and coordinating credit bureaus with online financial tools such as mint.com. FICO spokesperson Craig Watts told the New York Times that banks already consider savings and checking account history in lending decisions. Since lenders don’t report that information to consumer credit bureaus, it’s not available for FICO to factor into credit scores. Watts said, however, that FICO wasn’t discounting the idea of having more information available for better lending decisions

Saving needs a shot in the arm

According to the Bureau of Economic Analysis, personal saving as a percentage of disposable personal income in the U.S. was 5.7 percent in October and has been rising since the financial crisis. A survey by TIAA-CREF released in November showed that most Americans realize saving is essential for financial security. However, 82 percent surveyed didn’t know what it takes to save and 39 percent aren’t saving for retirement. The interest rate on savings accounts isn’t helping. According to Money-Rates.com, as of July 24, 2010, the average interest rate for savings accounts under $10,000 was 0.80 percent.

Sources

New York Times

Denver Post

Marketplace

Knowing your credit score is the most basic fundamental of credit repair. But it’s even more important to know what affects  your credit score. And even more important than that is knowing what you can do to improve your credit score.

Your credit score is free

Thanks to financial reform, doing something about your credit score is easier than ever. Free credit report services are advertised all over the Internet. Until now, those free credit reports didn’t include your credit score. You had to pay extra for that. But part of the recently passed financial reform bill ensures that you can get a free credit report that includes your credit score once per year.

Why is your credit score so low?

When it comes to credit repair, most people don’t know how they affect their credit score. For instance, Wallet Pop reports that many people assume if they pay their bills on time, their credit score is good. The truth is, even if you always pay on time, when your credit cards are maxed out, your score is lower than it should be. When credit bureaus see borrowing to the limit, they see risky behavior. To improve your credit score, tackling excess credit card debt is your first priority.

Credit repair: pay off credit cards first

To raise your credit score, pay off credit card debt first. There are two basic types of debt. Installment debt is secured by collateral, like a car loan. Revolving debt is your credit card balances. For some people, credit card debt revolves forever, which is not good for the credit score. Since credit card balances are unsecured, credit report companies like FICO say they’re more risky than installment loans. So paying off your credit cards will do more to raise your credit score than paying off your car.

Pay off collection agencies last

Unfortunately, if you’ve been taken to collections, your credit score is already hurt. Paying the collection agency won’t change the numbers. Bankrate.com reports that by the time your debt goes to collection, your creditor has already written you off. Although paying the collection agency will end the harassment, the payment won’t erase the delinquency from your credit report. Bear in mind that a surprise call from the collection agency can result from missed payments on everything from utility bills to library fines. The key to protecting your credit score is to avoid collection in the first place.

No thanks to charge cards

To keep your credit score from dropping, keep refusing that charge card every department store tries to sell you. This is because opening and closing credit accounts can lower your credit score. Wallet Pop said FICO credit bureau research has found that opening any type of credit account is automatically seen as more credit risk. If you do get that charge card and pay it off in full, your credit score will rebound in a few months, but it won’t rise above the level it was before you bought that new outfit.

Don’t cancel your credit cards

Sometimes when it comes to credit repair, it looks like the deck is stacked against you. Especially when canceling credit cards can lower your credit score. When you cancel a card, the line of credit it carries goes away. With less credit available, your credit score goes down. Instead of canceling, just zero the credit card out and throw it in your dresser drawer. New credit card rules prohibit credit card companies from canceling cards you don’t use–which used to hurt your credit score–so you don’t  have to worry about that anymore.

Use installment loans wisely

Taking out an installment loan for credit repair is risky, but it can work to pay off credit card debt with personal discipline. If you have a bunch of maxed out credit cards, the new installment loan won’t negatively impact your credit score as much as those debts. For this strategy to lower your credit score, you have to make yourself pay off the credit card debt with the installment loan, and throw the credit cards in the drawer until the installment loan is paid off.

Get professional credit repair help

Speak to a professional today and take proactive steps to repair your credit. For a FREE credit consultation, call 1-877-563-2076.

What is bad credit and how does it affect our lives

With the recession looming clear in all our lives, problems related to bad credit have been more evident of late. Dreams of buying a home or any property for that matter seems close to impossible with banks going super strict on approval for loans. Bad credit is a sure shot way of determining your name on the list of unapproved loan applicants. Even on the rare occasion of your loan being approved, you will be asked to pay a higher rate of interest, thanks to your debt. Landlords renting out their apartments also look into your credit history before they choose you as a tenant. So what can keep you away from becoming homeless? Credit history repair is the only solution to this problem but comes with its set of hassles. As tiring as it can be, credit repair is possible, and here’s how.

What is the solution to the above problems faced?

By logic, if you are facing problems due to bad credit, the sensible thing would be to try and clean up your credit report and gather good credit. Easier said than done, this process often leads to more trouble than solving the issue of bad credit. The best way to go about it would be to take it one step at a time as given below:

What to do:

• First things, first. Get hold of that credit report as the first step towards your goal of good credit. Know exactly where you stand and evaluate what you can do to repair the damage. A credit report can be obtained for free, as per the recent rule implied by the federal government. There are a few credit repair agencies that claim to provide you with a free credit report, but tread with caution here as some agencies take you for a ride. They promise you a free credit report, but only after you sign up for months of their service.

• Once you have a credit report in hand, evaluate it with care to eliminate any errors that may have been included. Calculate how much you owe. Keep all relevant documents with you so that you can cross check. Next step is to calculate your monthly income and monthly expenditure. Check on how much of this amount goes towards paying off your debts. Make a conscious effort to clear your debts while also making sure that you earn enough.

• Reducing your overall debt is essential in building good credit, and to increase credit score. At the same time, take note not to reduce it to zero, as it indicates no activity and will affect your credit report. Please note that it is advisable to use your credit card within 80% of the allowed limit. Using your credit card more than 100% of the limit can cost you around 100 points. In the same way, availing a new credit card or more within a short span of time can also be a bad mark on your credit history.

• Payments made on time can help in credit history repair. A late payment penalty is detrimental to good credit. Paying off all your debts will not suffice in giving you a better credit score or report. You might have to notify the payment collectors that your debt has been paid off and that they should remove any negative mark on your credit report.

What to look out for:

• A major concern in your struggle with obtaining a clean credit report will be to decide if you require professional help of credit repair agencies or if you can solve your credit issues on your own. The do-it-yourself plan will require a considerable amount of time spent on doing your base work on understanding the situation. Do your homework well with the help of books, the internet or by asking around for good remedies based on what experienced people have to say. On the other hand, if you are considering professional help, it is necessary to watch out for the good ones and the bad ones. Distinguishing the genuine agencies from the frauds is essential and there are steps to do the same. The Better Business Bureau is one such place that can help you decide on which agency to opt for. Ask ample amount of questions and make sure you get the answers.

• Be prepared to invest your time on this procedure of credit history repair as it can get tedious. Credit repair does not happen overnight and although is possible, will take its own time to fall into place. Any agency that promises a miracle with credit repair within a few days is sure to be a scam, as tried and tested cases of credit repair has proved that it is a time consuming process to say the least.

• Once you set out on the path of credit repair, do not give up. As we mentioned earlier, bad credit is easy to ignore but can prove disastrous the longer it is pushed away. Work towards meeting your goal of good credit and stay alert for any indications that will not allow you to increase credit score, like a negative remark by a payment collector whose debt is already paid or an unaccounted debt on your credit report.

The vital need to repair credit

All in all, as mammoth a task it seems to be, credit repair is absolutely necessary in today’s times. Keeping yourself equipped with all necessary documents and credit report is a wise thing to do while on the mission of availing good credit. Keep your goals clear and work on it step by step till bad credit is a thing of the past in your life. Say hello to good credit and watch all those unfinished dreams come true!

Get professional credit repair help

Speak to a professional today and take proactive steps to repair your credit. For a FREE credit consultation, call 1-877-563-2076.

The contents of your credit report can make or break your next loan application and your ability to borrow money. A good FICO score is the key to success. However, if your credit has taken a beating in recent times, you will have to do a little dusting off. The good news is there is still hope and you can easily impress a scrutinizing loan officer by implementing a few simple strategies discussed in this article.

How lenders grade your credit worthiness

There are various factors that lenders look at when it comes to underwriting a loan. To keep track of all these factors in today’s credit-driven environment, lenders use FICO scores to put everyone on a standardized scale. Doing this is useful in making quick decisions about a borrower’s:

- loan balances

- ability to pay

- payment habits

- history of seeking credit

To repair your credit, follow the steps below and your FICO score will improve accordingly.

Step 1: Make a plan

Planning to apply for a loan in advance of actually putting in your application can affect your outcome tremendously. If you have a poor credit score, a window of 3-6 months will give you plenty of time to make important changes. What is most unfortunate is how little attention people devote to planning.

A poor (or, less than stellar) credit rating can not only affect your approval status, but it can also affect the amount of interest you will pay. As such, planning before applying not only improves your chances for getting approved, but it also saves you money in the long run by lowering your borrowing costs.

Step 2: Decrease your loan balances

In simple terms, if you are using all of your credit (or worse, exceeding it), you are not likely going to be approved to add yet even more credit to your portfolio of debt.

As a general guideline, you should not exceed 75% of the credit limit on each account. Notice how I’ve said the credit limit for each account rather than all of your accounts combined. If you have a credit card with a $1,000 limit, pretend that the limit is actually only $750 and commit to sticking to this personally-imposed reduced limit. Apply the same formula to all of your other cards and their respective limits. This practice can impact your score dramatically, which will ultimately help you borrow money successfully. Use the next 3 – 6 months to bring down your limits to ideal levels.

Step 3: Know about your ability to pay

Aside from usage, there is another factor that relates to loan balances that can affect you. If you have too many accounts open and not enough income to service those accounts, lenders might classify you as a risk that they’re not willing to take.

Unfortunately, if this is the case, there’s little you can do. You could pay down your balances, which would be good for your FICO score anyway, but it won’t eliminate all the excess credit you have (which will still affect your debt ratios).

If you are tempted to close down some of your accounts that you don’t use, think again. Closing down various accounts is not always a good idea because that can affect you credit negatively. The only advice I have here is to refrain from opening up useless accounts in the first place (like department stores or specialty cards that you really don’t need in the long run) and simply lower your balances. Working to improve other factors will help your score overall.

Step 4: Improve your payment habits

If you have had many late payments in the past, your score is bound to be bruised as a result. However, if you start to improve your payment history from this day forward, your improved activity will be reported and you will start to notice boosts in your FICO score. Vow to make all of your payments on time – from this day forward!

Step 5: Do not seek credit

If you plan to apply for a loan in the next 3 – 6 months, do not seek any credit whatsoever between now and the time that you apply. Each time you seek credit, you get what is known as a ‘hit’ on your report. Hits lower your FICO score slightly. While they don’t make huge impacts, having plenty of them (and, being subsequently rejected) is not a good situation for prospective lenders to discover when they pull your report.

Put the above strategies into play and you will start to see dramatic improvements in your FICO score. To borrow money, lenders just want to make sure you are a good credit risk. They actually want to lend out as much money as they can. That is how they profit, after all. However, before profits, lenders have another priority and that is to protect their capital. If you do all your homework, and launch a plan in advance and put the strategies discussed in this article into play, you will come out ahead.

Get professional credit repair help

Speak to a professional today and take proactive steps to repair your credit. For a FREE credit consultation, call 1-877-563-2076.

Apply for No Credit Check Payday Loans HERE!

Bad credit is common

A lot of people get installment loans, even though they have bad credit. People from many types of backgrounds have bad credit. People end up with bad credit because of medical bills, large, emergency expenses and other accidents. Even those who are careful with money end up with bad credit because of medical emergencies and other unexpected events.

For some people, bad credit builds up slowly. It’s easy to slowly, gradually build up a balance on a credit card. Your debt can out of hand and ruin your credit before you know it. If you have bad credit, what do you do when an emergency comes along? Even if you have bad credit, you can get installment loans for Personal Money Market. Best of all, it won’t show up on your credit report, so you don’t risk making bad credit worse with installment loans.

Details: What is an installment loan?

An installment loan is a short-term loan for up to $1,500. You’ll have access to your cash as soon as two hours after you apply for your loan. The application is fast and easy. There are no credit checks, which makes the process faster. Even with bad credit, applying for installment loans takes just a few minutes.

How short-term installment loans work

With a traditional payday loan, you repay the entire loan with your next paycheck. With installment loans for bad credit, you can pay back your loan with a multiple payments over your next few paychecks. Installment loans can help you maintain or improve your credit score by getting you the cash to make a payment on time or keep bills out of collection agencies.

To apply for installment loans for bad credit, click the “apply now” button and follow the step-by-step instructions. With an installment loan, you’ll get your cash electronically deposited in your account right away, but you can pay back your loan using a few separate payments.

If you want to get installment loans for bad credit, apply now!

The loan industry is one of the largest financial marketplaces in the world today. Spending largely drives the economy and many consumers need loans to do their fair share of the spending. An unfortunate by-product of the loan industry is that many consumers and borrowers fail to repay their loans. Through unforeseen circumstances, such as job loss, or catastrophic medical bills, consumers are often left in debt and in amounts they cannot afford to repay. Credit scores suffer and securing a loan in the future now becomes more difficult. These types of situations create a separate niche within the loan industry known as bad credit loans. Having bad credit does not preclude you from getting a loan.

The new type of loan

More and more people in today’s economy are suffering from bad credit scores. Lenders have identified this niche and adjusted their requirements for making loans to accommodate this ever-growing market. Everyone is forced to adjust in an economy like the one we are experiencing. Lenders are no different.

As long as there are lenders, they will need borrowers. Borrowers need lenders and so adjustments are made by both entities.

What are lenders looking for?

There are essentially two things that lenders want to know about a prospective borrower in regards to making a bad credit loan. There are many other factors and considerations that lenders use, but the bottom line is this: Does the borrower have the means to repay the loan and does the borrower have intentions to do so? We are told credit scores are important and to some measure they are. However, the aforementioned factors are the most important.

Explain your credit report

For example, if you lost your job and were unable to make your monthly obligations on time, obviously your credit score suffered. However, if your complete credit history shows that you did pay your monthly financial obligations in the past, creditors will likely overlook your bad history with a simple explanation letter. Mostly everyone who takes out a loan has intentions of paying it back. Circumstances beyond your control may have prevented you from doing so. No one understands this better than lenders. You once paid your bills on time, and lenders only want to know that you plan to do so in the future.

Don’t get discouraged, you’re almost there

Regardless of how your credit score was damaged, if you are in a position where you are back on your feet financially, are able to pay your bills on time and have a history of doing so, you may be able to get a bad credit loan. All too often, consumers with bad credit tell themselves that they are not good enough, that there is no way they can get a loan. Nothing could be farther from the truth. It will take some effort, it may take some documentation, and it may take some shopping around to different lenders. Persistence is the key in securing a bad credit loan.

Photo from Picasa

Why Monitor Your Credit Report?

You’ve probably seen the TV commercials for FreeCreditReport.com that feature a young man singing about the misfortune he’s encountered due to negative information on his credit report. If you’ve ever tried to apply for a mortgage, auto loan or credit card and run into some of the same stigma that goes along with a bad credit history and a low credit score, you know how frustrating it can be – especially if you weren’t previously aware of the negative information on your report.

While errors on your credit report can exist, many of these uncomfortable situations occur because people simply aren’t aware of what’s on their credit reports. Of course, this is only one of the reasons for monitoring your credit report. Let’s look at this and a few others in more detail:

1. To Know Where You Stand

In these economic conditions, you’ll typically need a credit score of at least 620 to qualify for new credit and a score over 720 to get the best terms. Does your credit score fall in this range? If not, you can take action to improve it before applying for credit by paying down your debt and loan balances and building a good payment history. Since too many inquiries can lower your score, going in knowing that you’ll be approved will prevent these black marks from building up on your credit report.

2. To Protect Against Identity Theft

Identity theft is a major concern for most Americans, and it should be – repairing the damage caused by an identity thief can take years and can cost you thousands of dollars. Generally, the worst situations occur when people aren’t aware that a thief has gotten a hold of their personal information – the sneakiest criminals can open several accounts in your name and run up mountains of debt without you ever knowing it. By monitoring your credit report consistently, you’ll be able to catch any fraudulent behavior and repair the damage before it’s too great.

3. To Catch Errors Early On

According to some experts, up to 80% of Americans may have errors on their credit reports. These errors can be relatively minor – like a misspelled last name or an incorrect address – or they can be much more serious. For example, if one of your creditors mistakenly reports that your debt is in default, your credit score could take a major nosedive.

Fortunately, there is a process for correcting these errors, which involves notifying the credit bureaus in writing with supporting documentation to back up your claim. The downside is that this process can take time. If you’re planning to apply for a line of credit in the near future, taking the time to check your credit report for mistakes and fix those that you find now will prevent you from being incorrectly declined due to errors.

Obtaining Your Credit Report

The US government allows you to get a free copy of your credit report from each of the three major credit bureaus – Experian, Equifax and Transunion – once a year through the website AnnualCreditReport.com. Most financial experts recommend pulling one report every four months, which gives you ample time to correct any errors you find on each report. Staying on top of the information contained in each of these reports is an important part of protecting your financial future.

This debt relief has a sting to it? Try $39 million for a gallon of scorpion venom!

So if you’ll recall from last time, you’d chugged a gallon of eggs. Now you simply must maintain your figure and do the dirty work.

Latex house paint goes for $16.50 per gallon, and you’ve been putting that off for too long, haven’t you? When you’re done, why not clean your car? Armor All is $31.92 per gallon, while Rain X is $39.92. You’ll probably notice that the flowerbeds need some attention, so a gallon of Roundup may be necessary at $63.20 per gallon (assuming you live somewhere where it doesn’t snow).

Just don’t spend too much time outside, even if you live in San Diego as I used to, because winter is relatively cold and you don’t want to develop a cough. Robitussin DM tips the scales at $109.76 per gallon; however, there’s no earthly reason you should need that much of it – unless you’re spiking the holiday punch bowl (be a decent person and don’t do that, please). GHB could conceivably achieve more potent effect, but that would be illegal and I could not condone or promote such illegal action at $2,560 per gallon. I provide you with this link so you’ll know enough to avoid it. Otherwise, debt relief will be the least of your problems.

Blood is Less Expensive than Printer Ink

That’s right. Once you factor in the processing fee, human blood costs around $1,514.79 per gallon. It isn’t supposed to be sold in the U.S. according to Cockeyed.com, but the $200.00 processing fee per unit (500ml) is provided for vampiric entertainment purposes only. Not something I’d ever sink my incisors into, but I’m not a fan of movies with Robert Pattinson. If I absolutely had to apply red liquid that wasn’t a suitable beverage anywhere on my person, I suppose I’d go with Cover Girl nail polish at $892.80 a gallon.

Human blood may be pricey, but did you know that a gallon of black ink that will work in your home computer’s printer runs $2,701.52? That’s enough to give me a fever ($3,433.33 for a gallon of thermometer mercury) and mess with my blood sugar ($9,411.76 for Humulin L insulin). That stinks so bad that even a gallon of Chanel No. 5 won’t hide the stench (or the price, $25,600 per gallon). Gives me flashbacks to the time when my dog was sprayed by a skunk and then rolled in a fresh pile of Alpo after-effect (no LSD required or advised, but in case you’re wondering, that would go for $122,880 per gallon).

Toxic to Your Budget

And finally, Thailand cobra venom costs $152,835.82 per gallon in lyophilized powder form. If that isn’t good enough for you, scorpion venom tops the Cockeyed.com list at $38,858,507.46 per gallon. This brings us back to debt relief and why you would need scorpion venom. If you’re a doctor in the Australian outback, I could see the need. But don’t you owe enough on your med school loans? Thankfully, short term debt relief is possible with – you guessed it – payday loans.

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"Your eyes feel so very heavy. You will pay only the minimum balance on your credit card…"

We all know by now that making only the minimum payment on your credit card balance each month is a recipe for long-term debt. If that sounds appealing to you, then by all means, continue to fatten the pig. It loves the sloppy seconds (thirds… fourths…) of Joe Consumer. The best way around becoming a swine in such a situation is to pay your credit card balances in full.

But the minimum payment – the amount you must pay in order to keep ahead of accumulating interest – can be so enticing. It’s there in bold print on your bill, and would take so little out of your checking account. You’d be rid of it and have free reign to spend that money on something delicious. There it is, each and every month on your bill. It pops, and so many people have become conditioned to accept.

It’s Psychological Anchoring

It’s related to hypnotism and hypnotic conditioning, according to Neil Stewart of the University of Warwick. He writes in his Association for Psychological Science article “The Cost of Anchoring on Credit Card Minimum Repayments” that the minimum payment is a powerful suggestion that serves as a psychological anchor.

Think about it. Credit card debt is out of control. As a nation, Americans are on the hook for more than $2.5 trillion. Of that total, over $950 billion is tied up in credit cards. In the United Kingdom (from where Stewart hails), that’s nearly £175 billion with just over £55 billion on credit cards. Lenders are required by various agencies to collect at least a minimum payment each month, but you can be certain that if they could ask for less, they would. Compound interest is already a financial gale force; lack of basic regulation would prove to be a perfect storm.

Hypnotic Triggers Surround Us

This isn’t “hoodoo” or mysticism; it’s how our brains work. The power of suggestion is the cornerstone of advertising, politics/religion, sexuality and so many human affairs. Stewart suggests that anchoring in the financial sector involves using numbers to bias our judgments and decisions, even if the message is rather implausible. Call the minimum payment suggestion on a credit card statement a Jedi mind trick, if you will. You know they’re the droids you’re looking for, but the lure of the message is too hard to ignore. People should pay more, but the minimum payment suggestion is front and center like a hypnotic focal point.

Stewart’s Survey Opens Your Eyes

The author draws from a 248-member survey sample of credit card holders in the United Kingdom. They are split evenly by sex, and the ages range from 18 to 65. Of these, 196 participants carry credit card balances over. Ignoring the lure, 113 pay in full, while 83 made a smaller payment. Thirteen of these make the minimum repayment.

Perhaps Americans are more susceptible to financial hypnotism, or perhaps they are less educated than their British counterparts? I base this assertion on the marked difference in percentage of consumer credit debit being in credit cards between the nations.

So Stewart Spices it Up a Bit

Using data from a market research company, Stewart looks at a scenario where mock credit card statements were sent. Some included minimum payment information, while others did not. The outstanding balance remained the same. What he found is slightly different than what you might expect: those presented with a suggested minimum payment were not necessarily less likely to pay in full, but they definitely paid less when partial payments were made. Removing that hypnotic suggestion had a dramatic effect; mean repayment amount went up by 70 percent.

What Does This Mean for Real Credit Card Debt?

The author points out that if a consumer has a credit card debt of around $4,000 at a 20 percent APR, just a two percent reduction in the amount paid quadruples interest charges over the year. Including minimum payment numbers “roughly doubles interest charges,” Stewart found; it proves to be almost irresistible hypnotic conditioning. By the numbers, minimum payments amounting to $909 (about 23 percent of the $4,000 balance) would lead to $109 in interest charges. If the hypnotic trigger is not present (no minimum payment listed), repaying $1,603 (40 percent of the $4,000 balance) leads to a mere $49 in interest charges. “Anchoring on minimum-repayment information may be costly,” writes Stewart.

But Would Additional Warnings Help?

Not necessarily, and this is where financial education enters the picture. While additional warnings have been proposed, multiple sources Stewart engages have found that “warnings about the dangers of making only minimum repayments are likely to lead to disengagement rather than behavior adjustment.” In general, warning someone about anchoring and related hypnotic conditioning tends to prove ineffective; Americans’ general misunderstanding of compound interest certainly doesn’t help matters. However, Stewart does suggest that going one better than listing a minimum payment amount is necessary. Tables that show a variety of repayment scenarios and their impact would tend to help break the trance, so to speak. Credit card debt would lessen nationwide and make credit repair more likely. Remember, when it comes to hypnotic conditioning, nobody is being forced to do something against their will. It would be worth examining our own customs and motives when it comes to personal finance.

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Do mortgage brokers profit excessively from yield spread premium charges? Will borrowers ever discover credit repair?

The subprime mortgage crisis helped make a mess of America’s economy, to the point where credit repair has become a questionably attainable goal at best. The path toward more house than Joe Consumer can handle financially was paved by upside down transactions with mortgage brokers. When compared with direct lenders, working with mortgage brokers generally stretches out the time it takes in which to close a mortgage loan and introduces the consumer into murkier financial waters.

Swimming with Yield Spread Premiums

A yield spread premium (YSP), according to the Center for Responsible Lending (CRL), is “a bonus a lender pays to reward a mortgage broker for placing, or steering, a borrower into a higher-cost loan than the borrower qualifies for.” That would typically include hefty prepayment penalties that keep the consumer stuck in the loan long enough to extract higher profits. The CRL points out that resulting foreclosure cases harm not only the borrower, but society as a whole in the form of lessened property values and tax revenues.

Studying the Gross Profits of Yield Spread Premiums

That’s what Antje Berndt, Burton Hollifield and Patrik Sandas of Carnegie Mellon University and the University of Virginia set out to expose in their paper “The Role of Mortgage Brokers in the Subprime Crisis.” They play a large role in the recent American mortgage market, as they are a centerpiece of subprime loans. And by the authors’ estimate, subprime mortgage loans accounted for at least 75 percent of all mortgages originated as late as 2006.

“What were the explicit and implicit incentives for mortgage brokers to match borrowers with different types of mortgages?” ask the authors. Furthermore, “Did these incentives change during the run up to the crisis?”

How Does the Yield Spread Premium Work?

Lenders provide the mortgage broker with a set of incentives. One example the authors give is a lender paying the broker a kick-back for offering more expensive loans to consumers. Sure, it gets them in a home for a while, but it works against their financial best interests. The broker, given this incentive, is working to aid the borrower first and the consumer a distant second. Or at least that’s the theory that the authors explore. They search for evidence in the records of one of the largest subprime loan originators – New Century Financial Corporation – from 1997 through March 2007. The authors study info on borrower creditworthiness, loan purpose, appraised value of the property, property location and type, type and terms of the mortgage loan, loan service records and info on broker involvement. This leads to the profit portrait.

How Does the Loan Origination Process Work?

In five steps, here’s what New Century does:

1. Brokers attract borrowers to complete loan applications. Applications are sent to a New Century account executive (AE) or the company’s Web portal.
2. AEs forward apps to New Century managers for documentation review.
3. If documentation is in place, AEs send loans through the underwriting process, where the approval or denial decision is made, based upon the consumer’s credit and mortgage histories. The interest rate and terms are set at this time and the home is appraised.
4. If approved, the loan goes to a closing agent.
5. After loan documents are sent, documents are sent via closing agent to a funding officer, who sets the wire process in motion.

Think New Century was Approving Every Subprime Consumer?

You’d be wrong, say the authors. Of the 330,000 subprime loans funded in 2006, there were nearly that many who were either withdrawn by the consumer (buyer’s remorse) or denied outright. Either way, brokers were being compensated for a good year’s work in the subprime market, it would seem.

Speaking of compensation, loan origination and credit fees play a significant role in a broker’s payment. But then there are those YSPs. The more higher-rate loans brokers originate, the more they stand to make in profit. Think that customers were being nudged (perhaps too gentle a term?) toward YSPs? Considering that brokers don’t have to disclose the yield spread premium until after the closing statement is signed, there’s very little mess until after the consumer has already opened a vein to sign the contract in blood, so to speak. YSPs account for around 65 percent of broker revenue, according to the authors. The average dollar revenue per loan was around $7,000.

Underwriting the Risky

Based upon a borrower’s characteristics (credit quality, willingness to pay, etc), the broker presents financing options to the consumer. One or more lenders receive funding requests from the broker, and the lenders make the ultimate decision. “The loan will be originated,” write the authors, “if the lender’s surplus is positive so that the lender agrees to the funding, if the gains from trade between the borrower and the broker are positive, and the fees will be set so that the surplus is split between the borrower and broker in proportion to their bargaining power.”

Other Mortgage Loan Profits

A hybrid mortgage loan (aka a fixed-period adjustable rate mortgage) is another profit machine for brokers, pumping up their returns by about 28 percent. Mortgages with “limited documentation or stated documentation” increase broker profits by 33 percent and 18 percent, respectively. Those mortgages that have prepayment penalties (yield spread premium territory) offer 29 percent greater profits. In the case of a refinancing where cash is taken out, the authors found that broker profits nearly doubled.

Some other factors that influenced ability to reap excess profit included broker experience and strength of broker-lender relationship. Lenders likely viewed such brokers as have greater bargaining power over consumers, particularly with mortgage contracts where documentation was minimal and the consumer was gullible enough to sign on. Complex mortgages with minimal documentation for the consumer (not to mention a skilled broker) roped in their share of what amount to many foreclosures. That’s hardly an environment for consumer credit repair, it would seem.

High Profit Loans and Borrower Delinquency

You can only ask so much from borrowers with limited means. As the underwriting criteria for New Century and numerous other mortgage lenders was too slack, the result was expensive mortgages without people who could pay for them. Yield spread premiums created the profits brokers desired and the lenders were happy just to see loans originated, regardless of realistic ability to pay in many cases. Thankfully, the Obama administration has paid close attention to restructuring the mortgage loan market, but will it be enough to allow consumers to find avenues for credit repair? That remains to be seen. In the meantime, if you’re looking to take out a mortgage or refinance, here’s a mortgage calculator. Do the math before a lender or broker does it for you and has you paying their yield spread premiums.

(Photo Credit: http://www.flickr.com/photos/fibonacciblue/ / CC BY 2.0)

Credit repair is possible, but only if you increase your debt literacy. (Photo: flickr.com)

Do you consider yourself to be financially literate? How about when it comes to debt – is your level of debt literacy high enough that concepts like credit repair are second nature to you? Chances are your opinion of your debt literacy is higher than the reality. This is much in keeping with a trend numerous studies have observed in Americans: their level of debt literacy is less than adequate to deal with a complex financial market where important decisions – even on the average consumer’s level – can make the difference between a lifetime of saving or an endless cycle of debt. One recent study for the National Bureau of Economic Research by Dartmouth Economics Professor Annamaria Lusardi and Harvard Financial Management Professor Peter Tufano entitled “Debt Literacy, Financial Experiences and Overindebtedness” shows us just how far Americans have to go before debt literacy and credit repair become a part of the everyday financial lexicon.

Survey Methodology

Saving, investing and being prepared for retirement are vital elements of financial health and well-being. However, runaway personal debt and a widespread lack of basic debt literacy understanding tend to take the place of the more positive aspects for many Americans. What the authors attempt to do with their study is to examine the connection between financial literacy and debt. As the authors see it, debt literacy amounts to “the ability to make simple decisions regarding debt contracts, in particular how one applies basic knowledge about interest compounding, measured in the context of everyday financial choices.” To measure debt literacy, the authors worked with a market research company to create and conduct a survey that asks a broad consumer sampling three questions designed to assess their understanding of basic debt literacy concepts like compound interest. The questions were intended to be solved via reasoning alone, so they were simple enough that calculators were not needed. Afterward, participants were asked to rate their own knowledge of debt literacy.

What Did They Expect to Find?

If numerous studies on the financial knowledge of the U.S. consumer were any indication, it wasn’t going to be a fairy tale ending. Douglas Bernheim documented Americans’ lack of financial knowledge as early as 1995. They fail to understand basic financial concepts, “particularly those relating to bonds, stocks, and mutual funds,” and are quite fuzzy on such things as terms and conditions on large-scale loans and mortgages. This trend looks to continue on into the future, as a National Council on Economic Education study of high school students shows “a widespread lack of knowledge.”

Is this a uniquely American phenomenon? Sign point toward “No,” as a survey of Health, Aging and Retirement in Europe (SHARE) indicates poor scores on financial numeracy and literacy scales. Even a member of the U.K. Treasury reported that United Kingdom borrowers have “a poor understanding of mortgages and interest rates.” As a whole, studies in America and Europe show that those with a lower level of debt literacy were less than likely to have a well-developed retirement savings plan, accumulated wealth, stock investments or low-fee mutual funds. They were more likely to have more expensive mortgages, however.

Survey Questions and Analysis

Here are the three debt literacy questions utilized in the authors’ study. The first involves compound interest:

Suppose you owe $1,000 on your credit card and the interest rate you are charged is 20 percent per year compounded annually. If you didn’t pay anything off, at this interest rate, how many years would it take for the amount you owe to double?

A)     2 years;

B)      less than 5 years;

C)      5 to 10 years;

D)     more than 10 years;

E)      Do not know;

F)      Refuse to answer.

Ignoring interest compounding would lead to doubling in 5 years; someone who knew about interest on interest might have selected a number less than 5; someone who knows the ―Rule of 72 would know that it would be about 3.6 years (i.e., correct answer (ii) ―less than 5 years.). Answers above five years reflect misunderstanding of the concept of interest accrual.

Fewer than 36 percent of respondents got this one right. Considering how many people carry revolving balances on credit cards, that’s a troubling statistic, but less than surprising. Many consumers have difficulty grasping percentages and fractions, and compound interest deals with these. The authors found a particular problem in this area for respondents aged 65 and older – many can’t do simple interest calculations.

How Long Will it Take to Pay Off Debt?

That’s something else any consumer with credit card debt should know, so the authors posed this as their second of three questions:

You owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12 percent (or 1 percent per month), how many years would it take to eliminate your credit card debt if you made no additional new charges?

A)     Less than 5 year;

B)      Between 5 and 10 years;

C)      Between 10 and 15 years;

D)     Never, you will continue to be in debt;

E)      Do not know;

F)      Prefer not to answer.

Slightly more than 35 percent of respondents knew that making the minimum payment amounts to an endless cycle (choice D). That’s it. The remainder show a less than solid grasp of debt literacy on this question. Hopefully they’ll do better with the final question.

Interest, Time and Money

You purchase an appliance which costs $1,000. To pay for this appliance, you are given the following two options: a) Pay 12 monthly installments of $100 each; b) Borrow at a 20 percent annual interest rate and pay back $1,200 a year from now. Which is the more advantageous offer?

A)     Option (a);

B)      Option (b);

C)      They are the same;

D)     Do not know;

E)      Prefer not to answer.

Only seven percent got this question correct. “Most chose a) even though the stream of payments to finance the purchase of an appliance at $100 per month in (a) has an APR of about 35 percent versus the 20 percent in option (b),” write the authors. Personally, this question threw me. As I read it, no interest is implied by choice a). But perhaps I’m missing something.

Demographics of the Debt Illiterate

The study authors found that debt illiteracy is indeed widespread. Respondents 65 and over showed the least debt literacy on the first question, while younger subjects (under 30 years of age) tended to get the first question correct but miss the final two. Gender and race divisions emerged, as did those between married respondents and unmarried. Among the unmarried, it is interesting to note that those who list as being divorced, separated or widowed performed at a lower level than those who had never been married. Surprising no one, respondents with higher income (particularly those earning $75,000 per year or more) scored higher than those in lower income tax brackets.

But Who Thinks They’re Literate?

On a scale from 1 to 7, where 1 means “very low” and 7 means “very high,” the study authors asked respondents to rate their financial knowledge. The average overall score was 4.88, and most considered themselves to be at least above average. Over half of those surveyed marked themselves as a 5 or 6, while only a wink over 10 percent actually chose 4 or lower. Rankings tended to mirror the demographic groups found in the three-question knowledge portion of the survey, but there were two notable differences. In particular, the over 65 age group rated themselves highly but scored lower at an average of 5.3, while the divorced/separated/widowed did the same but clocked in at only 4.79. Again – surprising no one – those who rated themselves high on average had higher incomes and accumulated wealth.

Four Clusters, Four Levels of Debt Literacy

The authors identified four distinct groups among the survey respondents. On one end of the scale are the “in control” group, comprising 26 percent of the sample. They are “firmly engaged in the traditional financial system. These individuals all have credit cards, but do not carry any revolving balances. They have relatively high (but not the highest) levels of experience with mutual funds, stocks, and bonds. They also had the highest incomes. On the other end are “fringe” users who partake of alternative financial services more often, such as payday loans, tax refund loans and pawn shops. Their likelihood of having ever invested in a stock, bond or a mutual fund—or held a mortgage—is about one fifth that of the “in-control” sample.

The middle groups make up what the authors claim to be 43 percent of Americans. The “borrower/saver” group (12 percent) has “the highest level of experience with savings and investments of any of the four clusters, with 98 percent having experience with savings or CD products, 83 percent owning mutual funds, 83 percent owning stocks, and 65 percent owning bonds or savings bonds. They are more extended than the “in control” group in that 95 percent carry revolving credit balances. The final 31 percent are the “overextended” group, who have “less experience with savings and more markers of extended credit.” They typically only pay the minimum on credit cards and have much more experience with penalty fees and much less with stocks and bonds. The authors consider this group to represent the “average American.”

Know Your Debt Level

This is the final question the authors asked participants:

Which of the following best describes your current debt position?

A)     I have too much debt right now and I have or may have difficulty paying it off;

B)      I have about the right amount of debt right now and I face no problems with it;

C)      I have too little debt right now. I wish I could get more;

D)     I just don’t know.

In November 2007 when the data was initially collected – barely predating the recession – around 40 percent of respondents had a negative relationship with debt. It seems likely that the numbers would skew even higher.

Lack of Education Will Cost You

That’s exactly what is found with Americans in credit card debt. Those who the authors found to be less financially knowledgeable tended to pay higher fees and finance charges. In fact, the authors estimate that a third of the costs such consumers pay on credit cards are a direct result of a paucity of debt literacy. In total, credit card holders paid $26.8 billion in penalties. Those less educated financially educated make up about 28.7 percent of the cardholder population, but account for a whopping 42 percent of those charges.

Richness of financial experience and a healthy amount of financial and debt literacy are the true recipe for accumulating wealth and approaching credit repair. Considering what Lusardi and Tufano found in their study, this “widespread lack of financial skills” is something America should be concerned about. Making financial education a mandatory part of school curriculums everywhere would be a good start, because what you know is more than worth its weight in gold.

Get professional credit repair help

For a FREE credit consultation, call 1-877-563-2076. Speak to a professional today and take proactive steps to repair your credit.

Credit card fraud is a problem that can be avoided with a little vigilance. If you need emergency cash loans, apply at Personal Money Market.

Even under the most watchful eye, your identity can be stolen very quickly. In fact, according to the 2008 Internet Crime Report published by the federal government, total loss from all types of fraud was $264.6 million, up from $239.1 million in 2007. What is going on?

In this age of wide-spread information about how to protect against identity theft and fraud, it seems that many people are not getting the message. Yet the World Wide Web, which has a lot of information about how to protect yourself, also contains many more ways to become a victim of fraud without even knowing it. If this happens to you and you need to get some emergency cash, your application will most likely be denied because your credit score is not what you thought it was. Here’s how to clean up your credit report should this happen to you.

Check Your Report Often

Many times, credit fraud happens because people do not keep a watchful eye on their credit report. The law allows you to get a free report once per year, without having to sign up for any credit monitoring service. An example, freecreditreport.com, actually requires you to sign up with their monitoring service before you can get your credit report. This is not free, and there is a better site (annualcreditreport.com) that will give you a free report each year. Get your report from here, rather than get caught in with the fancy, yet humorous, jingles of the other site. Once you download your report, look it over very carefully for any charges that you have not made. Anything that looks suspicious, make a note of it for the next step.

Call the Reporting Agency

Once you have made a note of any suspicious activities, call the reporting agency. This will be one of the three big agencies: Experian, Equifax and TransUnion. Find their consumer number and call them about your report. Explain to them that you did not make those specific charges and request to have them removed. However, if the creditor insists that it is a legitimate charge, the reporting agency may not be able to remove it. In this case, you will need to contact your creditors next.

Call the Creditors

Typically, your creditors will be credit card companies and other types of charge accounts, including any emergency cash loans that you may have needed to borrow. But it really could be any creditor that you owe money to. Locate phone numbers and start calling each company to dispute any charge. Though this may be easier when you first get a statement, try anyway as you never know what may happen. If you cannot get any results right away, ask to talk with their boss. Repeat this as many times as necessary to get results. Once you get results, make sure they really do remove the charge from your report by calling the reporting agency once again.

Pay Off Legitimate Debts

After you have all the charges that you did not authorize removed from your report, look at all the charges and debts that you did authorize but have not paid off. The best way to get this cleaned up is to pay them off. Simple enough, but this requires a bit of planning and execution on your part. Proper budgeting, with a debt repayment plan, is the best way to get the legitimate debts cleared from your credit report.

Use Emergency Cash Wisely

There are always going to be times when your expenses will outlive your income, leaving you to survive on emergency cash. Tread carefully and use these loans wisely—otherwise, you will do more harm than good to your credit report. Keep this in mind as you are cleaning up your credit and paying off your debts.

Apply for Cash Loans HERE!

Are you among those people who believe that it is impossible to get a loan if you have bad credit history? Having a bad credit tag, stitched to your profile, does not make it impossible for you to apply for an installment loan.

If you are in this category, then it’s important for you to know that bad credit is not going to “rain on your parade.”

A Variety of Installment Loan Options Available

Although bad credit installment loans offer less money with higher interest rates, all of these loans provide a better solution.

These options similar to payday loans with no faxing are offered to people with bad credit and different needs including auto loans, tenant loans, student loans, secured loans, etc.

Need More? Try a Secured Installment Loan

If your requirement for a loan is big and you need a longer repayment period, then you should apply for a secured bad credit loan. This type of bad credit installment loan will get you 125 percent of the total value of the loan amount, but this also requires you to put up collateral to the lending institution. Secured loans are also offered at competitive interest rates by many lenders, thus making it the deal for you!

No Collateral? Try an Unsecured Bad Credit Installment Loans

In case you do not have any property or home to do formality of offering an asset as collateral, the option for you would be unsecured loans for people with bad credit. This type of loan is collateral-free, so that certain borrowers like non-homeowners can get this type of loan. All you need to provide is sufficient reliability documentation which proves your repaying ability and stable income flow.

Installment Loans Enable You to Rebuild Credit

Installment loans for people with bad credit provide a good opportunity to build back your credit score by making timely payments. You can obtain a loan amount of up to $1,500 dollars at affordable interest rates even if you have a bad credit history.

Bad Credit Installment Loans: For Any Purpose

The loan amount can be used for any personal purpose such as paying urgent medical expenses, completing your education, improving your business or home, repairs, etc. Personal Money Market can be a good option to browse and compare various quotes offered by different lenders. You may also find a large number of credit unions, private lenders and financial institutions offering these installment loans for people with bad credit.

Apply for Installment Loans HERE!

Your credit score – those three, little, seemingly insignificant numbers – has a major impact on your life. Not only does it determine the interest rates you pay on loans or credit cards, more and more companies are using your credit score to grant or deny other amenities, like cell phone contracts or life insurance policies.

If you’ve never checked your credit report, now is a good time to do so. Errors that you’re unaware of could be preventing you from getting the best rates on a wide range of services.

In fact, this situation is more common than you might expect: It’s estimated that as many as 80% of credit reports contain errors. These errors range from being relatively minor in nature (for example, a misspelled name or a former address) to being much more serious, (as in the case of accounts mistakenly reported as past due or in default). Fortunately, you can correct these errors, but it does require some paperwork on your part.

Step One: Identify the Errors

As you might expect, the first step in correcting errors on your credit report involves finding them. Legally, you’re entitled to a free copy of your credit report from each of the three credit bureaus – Equifax, Experian and TransUnion – once every twelve months. To request these, visit www.AnnualCreditReport.com. This is the only site that offers legitimate free copies of your report. Other sites, including those run by the bureaus themselves, will charge you either by the report or for ongoing credit-monitoring services.

Step Two: Notify the Credit Bureau

If you find a mistake any of your credit reports, the next step is to notify the bureau in writing. When submitting your dispute, be sure to include any background materials that support your claim, in addition to your written explanation of the situation. The agency must investigate your dispute within 30 days of receiving it and notify you in writing of its decision. If the agency decides in your favor, it is also required to correct the report and send you a copy of your revised credit history.

Step Three: Add a Consumer Note to Your Credit Report

Depending on the nature of your dispute, the credit agency may decide against your claim. This can occur if the agency doesn’t have sufficient evidence to support your claim, or if there was a genuine mis-communication between you and the lender. Whatever the reason, you aren’t entirely out of luck. Consumers are allowed to add brief statements to their credit histories to explain their versions of disputes. For example, if a late payment was due to a job loss or an unforeseen medical bill, a note explaining the situation may be enough to convince a lender of your creditworthiness.

To submit a consumer note to one of the credit bureaus, follow the same procedure described above for disputing items on your report. Draft your statement (be sure to keep it short – most of the bureaus will print a maximum of 100 words) and send it in writing to the bureau. The bureau is required to send you an updated copy of your credit report with your consumer note added. Review the updated version to ensure that everything on your credit report is accurate and up-to-date.

In difficult economic times and with the credit market getting tighter and tighter, it is important to manage your credit and finances very carefully. One of the best ways to do this is to keep track of your credit rating.

A key component of your credit rating is your credit score. You can get your free credit scores from many companies on line. You have to be careful when dealing with some companies because there is a difference between your credit report and your credit score or scores.

Your credit report. The credit report lists your creditors, payment history, status of your loans, and any derogatory reports from the companies who gave you credit. This report does not contain any scoring. You can obtain one free credit report per year from the federal government.

Your credit score. Your credit scores are completely different. The scores are calculated by reporting agencies based on your credit report. These scores are available to any company you apply to for credit. When deciding where to get your credit information, read closely to see whether the company is offering a free credit report, a free credit score, or all three credit scores for free.

Get all three, but probably not for free

Another consideration regarding free credit scores is that your overall score is a combination of scores from the three major credit bureaus: Experian, Trans Union, and Equifax. Most lenders look at all three scores to come up with a composite of your overall credit-worthiness. Many sites will offer a free credit score, but not all three credit scores. Many times you will be given one score, but have to pay for the other two. These sites may pressure you to buy your other two scores by emphasizing that bad information could appear on one credit report and not on others. Slick marketing can make your free credit report actually quite expensive.

Monitoring can be expensive: Buy only what you need

Another tactic that marketers use in the free credit-reports game is to emphasize that information on your credit report can change at any time. They use this strategy to sell monthly memberships that monitor changes in your score. The problem is that most people’s scores do not change all that quickly. Only very financially active people need constant updates or even monthly ones. The average consumer would be fine checking once or twice a year.
Although it is important to take control of your credit, the marketing technique is to promote paranoia. People feel that they leave themselves vulnerable to erroneous derogatory credit items if they aren’t constantly checking. In truth, mistakes are made by the credit bureaus, but they are relatively rare.

One piece isn’t the whole pie

The companies offering free credit reports also tend to oversimplify the credit system. The score that you see for each bureau isn’t all that your credit history can say about you. Many industries, such as mortgage lenders, weigh the information pertaining to how well you pay your rent in relation to the rest of your credit history. This score is different from the general score you might see. A complex lender-calculation like this could be the reason you are declined for a loan even though your overall score is okay.

Unhappy with your credit score?

The credit repair industry has gotten a bad rap. Many companies have claimed to help consumers, only to charge them high prices for things the consumer could do for themselves, for free. Other companies have offered high-quality misleading services as “bringing your credit score up 100 points within two months.” While this claim sounds good, many people found out the hard way that this is an impossibility.

Despite the bad apples, there are some qualified and truly helpful credit repair agencies available. They can work with compromised credit scores and help consumers work hard to bring their rating up. But how do consumers sort through the long list of available credit companies? There are general rules to follow and things to look for when choosing a company. Being aware of these rules can make the decision much easier and the results much more satisfying.

Five factors to watch for

In general there are five factors to watch for when selecting a credit repair company. Consumers should ask these five questions as they research new companies.

1. Is the web site professional? Consumers should look at the company’s web site and scrutinize their “about,” “history” and “contact” pages. In particular make sure the contact page has an 800-number and not just an e-mail for communication. Make sure there is an FAQ page that answers general questions. The history or about pages should have some testimonials that are varied. Also, consumers need to check for extraordinary claims that seem impossible.
2. Does the company seem ethical? It is extremely important that credit repair companies have a code of ethics. Consumers will be sharing pertinent and private information with their account representative, and the utmost care should be put into protecting information. Potential clients also can check with ECRA, Ethical Credit Repair Alliance, and the BBB, Better Business Bureau, to ensure the company follows strict codes of conduct. The BBB search will provide any complaints the company has had and whether they were resolved.
3. Are there a wide variety of services? Again, a credit repair company should be a virtual library of information. Consumers should be empowered by the information included on the web site. A good company will share resources on monitoring credit, maintaining credit, how to remove negative marks from credit and how to move forward with good credit. There will be a transparency built into their business model that benefits the page-viewer, whether or not they decide to sign up with that particular company.
4. Is the cost reasonable? Credit repair companies are businesses, so compensation is to be expected. Make sure the price is competitive and the list of services are wide. Consumers should check with a few companies and compare prices and offerings to find the best option.
5. Does the company offer a wide variety of solutions? People looking to fix their credit are not all equal. There are a variety of needs, and any company should offer a customized solution for every client. The solution provided should satisfy the customer within a workable amount of time.

Good credit repair companies are out there, though they may be harder to find. Consumers should do research and apply their good business sense, but in the end a company like this may be able to bring credit scores and budgets under control.

Get professional credit repair help

Speak to a professional today and take proactive steps to repair your credit. For a FREE credit consultation, call 1-877-563-2076.

Learning to cook can help improve your credit score (photo: flickr.com)

Credit repair services are on the rise as people figure out ways to save money and build wealth so they can pay down debt.   Paying down debt is a key element of credit repair, and obviously, it takes money to pay down debt.

But do you realize that if you just stopped wasting money when you buy groceries, clean your house, or pay for auto insurance, you would have the money you need to pay off debts and get your credit report cleaned up?  Here are a few ways to free up cash so you can start paying off those past due debts.

Eat more healthfully

Most of the typical food budget is dedicated to convenience foods that you could make yourself for pennies on the dollar. Instead of buying prepared mixes and processed foods, invest in a good recipe book and learn to cook.  Not only will you eat better and have fun in the kitchen, you’ll save money that you can apply to your credit repair.

Do you always need to buy brand-name foods? If you buy less-expensive generic foods, you’ll get the same quality while saving on your food expenses every month.  If you exercise just a little restraint at the grocery store, you’ll actually eat better and save enough to pay off your credit cards years earlier than you would otherwise. Credit repair is only a matter of living and spending sensibly.  You’ll save money to pay off debts, and you may even find that you enjoy life more!

Use safer household cleansers

Commercial cleansers are big money wasters.  Many of them are just chemical versions of natural cleaners you can make on your own with everyday ingredients. By using essential oils, lemon juice, borax, and vinegar, you can create your own healthful cleansers and save money every month.

Be frugal about energy usage

Energy bills are big-ticket items in any budget, and utility rates are expected to get even worse in the near future. In the winter, make sure you cover all drafts in your house by using plastic on your windows and blocking cracks around your doors. Depending on how well insulated your house is, you may be able to save extra money by using an energy-efficient space heater and turning down the thermostat.

Reconsider comprehensive auto insurance

Comprehensive insurance – coverage for a full range of potential hazards rather than just accidents and theft — can be a waste of money when you’re trying to pay down your debts and improve your credit score. Of course, if you’re making payments on your car, your lender may require you to carry comprehensive insurance.  But if you own your car outright, think about carrying the minimum insurance required by law and save yourself the much higher premiums paid for comprehensive coverage.

Buy a used car

When you buy a new, you lose a huge portion of its value the minute you drive it off the lot. In today’s market, used cars are far from clunkers.  When you buy a newer used car from a dealer, it looks and feels like new, comes with warranties, and has all the new-car bugs worked out.  If you’re in the market for a car, buy a used one and apply the money you save to payment of your debts.  The savings you’ll get by buying used instead of new are so great that if you apply them to your debts, you’ll be well on your way to an improved credit score.

Get ahead of the game right now

Credit repair is not just for people with extra money lying around. If you cut down on expenses right now, where ever you can, you’ll find the extra $100 to $300 per month you need to pay down your debts, even in this economy.  Think how great it will feel to be out of debt and ahead of the game when economic climate finally improves!