Archive for Credit score

How To Make Credit Scores Better in 4 Easy Steps

Author Bio : This is a Guest Post by Marc Brown. A Senior Financial Writer associated with Oak View Law Group. Besides publishing articles on various sites, he provides extensive guidelines on debt settlement questions.

Have you recently failed to make a timely payment on your credit card bills? Its impact won’t be good on your credit score. But can we deal with this problem? Yes! We can solve this issue if we follow four basic steps in order to improve our credit score.

Steps to repair your credit score:

Pay your credit card bills:

You can immediately improve your credit score by making payments by the due date. Bills like credit card bills mortgage loan or car loan needs to be paid on time. Your score won’t escape from the negative effect of failing to make the required payment on time.

Evaluate your credit report:

If you have a good credit record then you can easily apply for another loan. Evaluation is an important part of maintaining a positive track record. This would help to erase the wrong entries that might have ruined your credit report that determines your credit score. Your loan application would be negated on the pretext of poor credit score.

You can visit this site www.annualcreditreport.com that would help to get a free credit report. If you want any information on rectifying the errors then go through the Federal Trade Commission’s “Building a Better Credit Report”.

Result of a bounced Check:

Bounced check has a negative effect on your credit report. It can be a source for some massive issues on failing to control this matter. Your banks can get hold of the clients who have a poor credit report even if it does not appear on it. Penalty fee on the overdraft along with the bounced check would compound the adverse effect on the credit report.

Keep the old accounts active:

Keeping the old accounts open would help to boost your credit score. If you are unable to manage the accounts then it might lead to debt. If your older accounts are inactive then it might affect your credit score. Instead of closing the accounts try to include the present balance to your active account. If your account is old then it is an evidence of your credit worthiness. Therefore make small purchases with your older cards and pay back immediately with the arrival of the bill.

These four tips would improve your credit score and teach you to be responsible while dealing with your credit card.

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What Exactly is Consumer Credit Counseling?

There are many different meanings for the term consumer credit counseling.

In it’s simplest form, credit counselling is the process where you meet with a credit counselor and they give you advice on managing your money. They will help you deal with credit card debt, and they will explain how to improve your credit score on your credit report.

In addition, if you are planning to file for personal bankruptcy in the United States, they will conduct the mandatory credit counseling before filing bankruptcy, and the post bankruptcy filing credit counseling session. In Canada, the credit counsellor will conduct the credit counselling during the bankruptcy process.

Finally, a credit counselor will actually negotiate with your creditors on your behalf through a Debt Management Program where you make one payment each month to deal with your debts.

For more information, consult a local credit counselor.

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Save your credit with automatic payments

A great way to make sure you don’t miss any payments is to set up your bills to be paid automatically through your bank. Most utilities, cable companies, and phone companies offer this payment option, and it’s a great way to make sure you don’t miss any payments.

Making all of your payments on time is very important, because late payments can have a negative effect on your credit score.

If you don’t want an automatic payment, it is also possible to pay your bills on-line, on the date due. For example, if your hydro bill is due on the 20th of this month, set up your on-line banking to pay the bill on the 20th of this month. Your payment is made on time, but the money stays in your account until the exact due date, so you may earn some extra interest.

Be careful with this, however, because if you’re not monitoring your account regularly, you could find yourself becoming overdrawn and hit with multiple overdraft fees from your bank.

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Credit Counseling for Home Buyers?

Reader’s of this credit counseling blog know about consumer credit counseling as a way to deal with your debts, and most people now understand that you must have mandatory credit counseling before filing bankruptcy.

Many people may not realize, however, that since September 1, 2006 residents of certain areas of Chicago, Illinois are required to have credit counseling before they are allowed to purchase a house. The law, called the Illinois Predatory Lending Database, is intended to curb predatory lending by educating borrowers before they enter into a mortgage agreement.

Before buying a home, credit counseling must be obtained from federal Department of Housing and Urban Development-certified counselors for people looking to buy homes in 10 Chicago ZIP codes who have low credit scores or whose income meets other criteria. The law only applies in certain zip codes that the state says have a high proportion of “predatory loans” and higher than average foreclosure rates.

Since most would agree that credit education is sorely lacking in North America, it could be argued that everyone should be forced to attend credit counseling sessions. However, a lawsuit is now underway, arguing that this law unfairly targets minorities. You can read more about it in today’s edition of the Chicago Tribune.

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Mandatory Credit Counseling – The First Year

In a press release issued today, the the National Foundation for Credit Counseling (NFCC) commented on the first year of mandatory credit counseling before filing bankruptcy as a result of Bankruptcy Reform legislation passed in 2005 that requires all debtors to receive credit counseling before they file for bankruptcy.

Some of their key findings:

— Through the first 11 months of the new law, NFCC members delivered 563,494 bankruptcy counseling and education sessions and issued 630,422 certificates.

— Consumers filing for bankruptcy were “upside-down” financially, with average unsecured debt being $11,599 greater than average annual income and the unsecured debt to income ratio has deteriorated since the April NFCC report.

— Mortgage delinquency was more prevalent for consumers filing for bankruptcy than for those receiving non-bankruptcy counseling.

— Phone and Internet counseling continue to be the predominant choice for services.

The full press release can be read here. Clearly the cost of providing the mandatory credit counseling is more expensive than originally anticipated, so further changes to the rules are possible. Stay tuned to this credit counseling Blog for updates as they become available.

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Three Ways to Improve Your Credit Score

Your credit score is a mathematical calculation, done by the credit bureau, that determines whether or not you can borrow money, and what interest rate they will charge you for the money you borrow.  The better your credit score, the lower the interest rate on your loan, so a good credit score is very important.  Here are some tips for improving your credit score.
First, pay all of your bills on time.  If you are late paying even small bills, like your monthly hydro bill, you will have a lower credit score.
 Second, do not apply for a large number of loans in a short period of time.  If you need a loan or mortgage, apply for it, but do not apply for a lot of them in a short period of time, because that will lower your credit score.
Third, try to keep your life as stable as possible.  If you constantly change jobs, and constantly move, the credit bureaus will question your economic stability, and that will lower your credit score.
If you are worried that you already have a low credit score, make an appointment with a credit counselor to review ways to improve your credit score.

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Credit Card Debt – Why Credit Card Debt is So Dangerous

There are two obvious reasons why credit card debt is so dangerous.
First, credits cards are easy to get, so most people have more credit cards than they need.  The more credit cards you have, the more you spend, and obviously that is very dangerous.
The second obvious problem with credit cards is that they typically charge a very high interest rate, often two or three times as much as a regular bank loan.  If you don’t pay off your balance in full each month, you will pay a high rate of interest, which means it will take you a long time to eliminate your credit card debt.
If you carry a balance each month on more than one credit card, make an appointment for credit counseling so that you can deal with your credit card debt.

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Debt Consolidation: The Good, The Bad, and the Ugly

When you meet with a credit counselor they will start the consumer credit counseling process by explaining your options for dealing with your debt.  One of the options to consider is debt consolidation.  Here’s what you need to know.

First, the good: a debt consolidation loan is used to combine the payments for many debts into one payment, so you only have one payment to remember each month.  As an added benefit, the interest rate on a debt consolidation loan should be lower than the interest rate you are paying on your credit card debt and other high interest debt you are consolidating.

The bad: you may not be able to afford even the new, lower payments on your debt consolidation loan.  Do a budget first, and don’t agree to anything you can’t afford.

The ugly: there are many debt consolidators that will charge you a fee for doing what you could do yourself, so don’t sign anything until you read it.

Debt consolidation is a great option for many people, but only if you consider your options carefully, and think before you sign anything.

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Welcome to the Credit Counseling Blog

Welcome to the Credit Counseling Blog, where we will discuss credit counseling, debt manage plans, and ways to deal with your debt, all from a consumer’s viewpoint.  Stay tuned for more!

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