Archive for May, 2010
Consumer Credit Counseling
consumercreditcounsl asked:
What you should know about Consumer Credit Counseling. Watch this before you sign anything! For more valuable credit tips, visit www.creditsecretsbible.com
Kim
Consumer Credit Counseling – How to Lower Interest Rates and Eliminate Credit Debt
S. Suresh asked:
Show me a person with a credit card and I will show you a person who is sitting on time bomb. All it takes is one wrong swipe, one impulsive purchase, one rash decision or one financial emergency for your credit card debt to rise to unmanageable levels. What really hurts is the interest policy followed by the credit card issuer.
This form of debt is the most expensive form of loan available in the market. Further, the penalty and interest charges imposed on your credit card, rise and nearly double once you default on the same. A person who defaults has a very little chance of repayment of debt.
Once interest rate increases; chances of repayment come down to zero. In such a scenario, elimination of card debt becomes very difficult. If you want to overcome your debt problems, you will have to first focus on the interest rate and you will have to find out ways and means to bring your card debt down to manageable levels. Both these options have to coexist.
If you have a high interest card debt, it is obvious that you cannot manage all your loans. On the other hand, if you do not eliminate credit card debt, you will find it very difficult to keep the debt under control even if the interest rate is low. Is there any solution that will help you achieve both the goals in a single stroke? Well, card debt consolidation will help you lower the interest rate.
However, the discount offered ranges from 1%-5% for the lump sum repayment that is made. In such a scenario, it is obvious that credit card debt consolidation is not going to work. Other solutions that eliminate credit debt will not have any relation or bearing on the interest rate charged on your loan.
In such a scenario, settlement happens to be the best option around. When you get a 50% discount, your monthly outflow automatically comes down. Secondly, you can negotiate and lower the interest rate by increasing the tenure of the loan. Credit card issuers normally give 18-24 months to an individual who has finalized the settlement deal.
You can exceed this figure and increase it to 36 months but request a reduction in the interest rate. The increase in the tenure will make it more profitable for the credit card issuer. Once your finances are back on track, you can always make use of a consolidation loan or any bonus income to repay the debt in full to save on interest charges as well.
Ralph
Show me a person with a credit card and I will show you a person who is sitting on time bomb. All it takes is one wrong swipe, one impulsive purchase, one rash decision or one financial emergency for your credit card debt to rise to unmanageable levels. What really hurts is the interest policy followed by the credit card issuer.
This form of debt is the most expensive form of loan available in the market. Further, the penalty and interest charges imposed on your credit card, rise and nearly double once you default on the same. A person who defaults has a very little chance of repayment of debt.
Once interest rate increases; chances of repayment come down to zero. In such a scenario, elimination of card debt becomes very difficult. If you want to overcome your debt problems, you will have to first focus on the interest rate and you will have to find out ways and means to bring your card debt down to manageable levels. Both these options have to coexist.
If you have a high interest card debt, it is obvious that you cannot manage all your loans. On the other hand, if you do not eliminate credit card debt, you will find it very difficult to keep the debt under control even if the interest rate is low. Is there any solution that will help you achieve both the goals in a single stroke? Well, card debt consolidation will help you lower the interest rate.
However, the discount offered ranges from 1%-5% for the lump sum repayment that is made. In such a scenario, it is obvious that credit card debt consolidation is not going to work. Other solutions that eliminate credit debt will not have any relation or bearing on the interest rate charged on your loan.
In such a scenario, settlement happens to be the best option around. When you get a 50% discount, your monthly outflow automatically comes down. Secondly, you can negotiate and lower the interest rate by increasing the tenure of the loan. Credit card issuers normally give 18-24 months to an individual who has finalized the settlement deal.
You can exceed this figure and increase it to 36 months but request a reduction in the interest rate. The increase in the tenure will make it more profitable for the credit card issuer. Once your finances are back on track, you can always make use of a consolidation loan or any bonus income to repay the debt in full to save on interest charges as well.
Ralph
How to Eliminate Debt
Marie Megge asked:
So, you’re in debt and you’re now performing the very necessary task of investigating resources that may be available to you so that you can eliminate your debt. The good news is that you’re not in denial; you realize and acknowledge that your debt has become a problem that requires a solution. This is where the financial healing begins.
If your monthly payments are a burden and you’re just not making ends meet, obviously many of the solutions you read about just won’t work for you. In other words, if you can barely pay your bills each month, and you’re borrowing from one credit card to pay another, it’s simply not feasible to expect that you’re in a position to pay extra money toward one of your larger accounts until that particular card has a zero balance. Rather, you’ll need to find another solution to eliminate your debt.
Perhaps you’re considering consumer credit counseling, debt settlement or even bankruptcy. If this is the case, let’s take a closer look at these options.
Consumer Credit Counseling
A Consumer Credit Counseling service negotiates lower payments and/or interest with your creditors, then makes negotiated payments on your behalf each month. If you’re able to commit to a regular monthly payment for 5-7 years, which won’t result in a financial hardship, perhaps this is the way to go. As with all things, however, there are drawbacks.
Please note that credit counseling organizations are typically not-for-profit (NFP) and are often funded by the creditors themselves, government grants or voluntary support from member agencies. The best of these debt counseling agencies offer significant help to people who are struggling with their debt load to get back on their feet. However, there are many less reputable organizations that simply disappear with your money and what’s left of your credit rating. Between the two extremes can exist a host of companies that may or may not provide any significant benefit to debtors seeking assistance.
There is a general feeling that people should be wary of not-for-profit (NFP) counseling organizations because many of those organizations are set up by creditors and it’s suspected they may discourage direct client-creditor negotiations and in the process unobtrusively impede the client’s speed of debt repayment which has the effect of increasing overall interest charges paid in the long run.
If you should choose this route it is highly recommended that you carefully investigate the service agency beforehand.
Debt Settlement/Debt Negotiation
Increasing significantly in popularity, this form of debt relief has assisted thousands of individuals and families. Like consumer credit counseling, however, debt settlement is not a painless process. You see, debt settlement is a method of debt relief which results in the willingness of your creditors to accept less than the full balance owing, as payment in full. The majority of creditors will “settle” your accounts for 30%-50% of the balances owed, and consider the accounts paid in full, with no further balances owed.
As stated previously, debt settlement does have some drawbacks. For instance, most creditors will not consider settling an account for less than the full balance unless it is considered delinquent. Obviously, delinquent accounts will result in an attempt by creditors to collect the outstanding balance. This may culminate in a series of telephone calls and collection letters generated by your creditors. Additionally, this delinquency will appear on your credit report, subsequently leading to a reduced credit score.
Of course, on the other hand, your debt will successfully be eliminated in a relatively short period of time, saving you thousands of dollars in interest and payments that otherwise would have been paid over a period of several years.
Bankruptcy
Bankruptcy is usually considered only as a last resort due to the “seriousness” of this form of debt relief. Unfortunately, a bankruptcy filing can remain on your credit report for up to ten years, and is a matter of public record; therefore, anyone who wants to access court records can learn of a bankruptcy filing.
As I’m sure you’re aware, the new bankruptcy law went into effect in October 2005, and the landscape has changed for those who are considering bankruptcy. Some filers with higher incomes won’t be eligible to use Chapter 7, but will instead have to repay at least some of their debt under Chapter 13. All debtors will be required to go through credit counseling before they can file a bankruptcy case – and additional counseling on budgeting and financial management before their debts can be wiped out.
Does this mean you should steer clear of bankruptcy? Not necessarily. Obviously, your own personal circumstances are the only factors which can determine the best path for you. If you simply cannot enroll in a consumer credit counseling program, or you’re not a good candidate for debt settlement, bankruptcy may be your only choice.
What is most important at this time is the fact that you are facing a very difficult situation “head-on” and you’re willing to look at your options. Fortunately, there are options and you will no doubt find a solution that is best suited to your personal financial situation.
Jose
So, you’re in debt and you’re now performing the very necessary task of investigating resources that may be available to you so that you can eliminate your debt. The good news is that you’re not in denial; you realize and acknowledge that your debt has become a problem that requires a solution. This is where the financial healing begins.
If your monthly payments are a burden and you’re just not making ends meet, obviously many of the solutions you read about just won’t work for you. In other words, if you can barely pay your bills each month, and you’re borrowing from one credit card to pay another, it’s simply not feasible to expect that you’re in a position to pay extra money toward one of your larger accounts until that particular card has a zero balance. Rather, you’ll need to find another solution to eliminate your debt.
Perhaps you’re considering consumer credit counseling, debt settlement or even bankruptcy. If this is the case, let’s take a closer look at these options.
Consumer Credit Counseling
A Consumer Credit Counseling service negotiates lower payments and/or interest with your creditors, then makes negotiated payments on your behalf each month. If you’re able to commit to a regular monthly payment for 5-7 years, which won’t result in a financial hardship, perhaps this is the way to go. As with all things, however, there are drawbacks.
Please note that credit counseling organizations are typically not-for-profit (NFP) and are often funded by the creditors themselves, government grants or voluntary support from member agencies. The best of these debt counseling agencies offer significant help to people who are struggling with their debt load to get back on their feet. However, there are many less reputable organizations that simply disappear with your money and what’s left of your credit rating. Between the two extremes can exist a host of companies that may or may not provide any significant benefit to debtors seeking assistance.
There is a general feeling that people should be wary of not-for-profit (NFP) counseling organizations because many of those organizations are set up by creditors and it’s suspected they may discourage direct client-creditor negotiations and in the process unobtrusively impede the client’s speed of debt repayment which has the effect of increasing overall interest charges paid in the long run.
If you should choose this route it is highly recommended that you carefully investigate the service agency beforehand.
Debt Settlement/Debt Negotiation
Increasing significantly in popularity, this form of debt relief has assisted thousands of individuals and families. Like consumer credit counseling, however, debt settlement is not a painless process. You see, debt settlement is a method of debt relief which results in the willingness of your creditors to accept less than the full balance owing, as payment in full. The majority of creditors will “settle” your accounts for 30%-50% of the balances owed, and consider the accounts paid in full, with no further balances owed.
As stated previously, debt settlement does have some drawbacks. For instance, most creditors will not consider settling an account for less than the full balance unless it is considered delinquent. Obviously, delinquent accounts will result in an attempt by creditors to collect the outstanding balance. This may culminate in a series of telephone calls and collection letters generated by your creditors. Additionally, this delinquency will appear on your credit report, subsequently leading to a reduced credit score.
Of course, on the other hand, your debt will successfully be eliminated in a relatively short period of time, saving you thousands of dollars in interest and payments that otherwise would have been paid over a period of several years.
Bankruptcy
Bankruptcy is usually considered only as a last resort due to the “seriousness” of this form of debt relief. Unfortunately, a bankruptcy filing can remain on your credit report for up to ten years, and is a matter of public record; therefore, anyone who wants to access court records can learn of a bankruptcy filing.
As I’m sure you’re aware, the new bankruptcy law went into effect in October 2005, and the landscape has changed for those who are considering bankruptcy. Some filers with higher incomes won’t be eligible to use Chapter 7, but will instead have to repay at least some of their debt under Chapter 13. All debtors will be required to go through credit counseling before they can file a bankruptcy case – and additional counseling on budgeting and financial management before their debts can be wiped out.
Does this mean you should steer clear of bankruptcy? Not necessarily. Obviously, your own personal circumstances are the only factors which can determine the best path for you. If you simply cannot enroll in a consumer credit counseling program, or you’re not a good candidate for debt settlement, bankruptcy may be your only choice.
What is most important at this time is the fact that you are facing a very difficult situation “head-on” and you’re willing to look at your options. Fortunately, there are options and you will no doubt find a solution that is best suited to your personal financial situation.
Jose
How Credit Counseling Works
Jeanette Joy Fisher asked:
The consumer credit counseling business is a huge industry in America, since the average American is a mere three paychecks away from facing huge, potentially devastating financial difficulty. Each year, more than a million Americans turn to credit counselors to try to help themselves regain control of their financial burdens. But just how the credit counseling business works is a mystery to most consumers. What’s involved when you hire a credit counselor?
It may come as a bit of a shock, but the first thing you need to understand is that consumer credit counselors don’t work for YOU! That’s one reason their ads on television, radio, and in your email box shout, “Our services cost you nothing!” However, any business needs to derive income from somewhere, so if they’re not charging you, who does pay them? In truth, they work for the lenders. Here’s how it works:
Regardless of what their commercials would have you believe, credit counselors don’t renegotiate the overall amount of your debt–that is, the total principal balance you owe to your creditors. Instead, they negotiate with the various lenders to decrease your interest rates. For instance, let’s say that you’re paying somewhere around 18 percent on the charge card you want help with (some stores still charge as much as 21 percent). A credit counselor will contact the cardholder and negotiate a lower interest rate–sometimes as much as half the original rate.
That’s the good news. The not-so-good news is that your minimum payments will still be based on a 90/10 split, meaning that 90 percent of your monthly payment will still go toward paying interest on the card. That means, as is the case with any credit card payment, it will be well worth your while to pay a little more than the minimum each month, in order to whittle down your principal. It will save you significant amounts of money in the long run.
But how can credit card companies continue to make money by cutting interest rates in half, and what do they have to gain by doing so? The first reason is because they know that it’s better to get something, which they’ll do if you continue to pay them, even at a reduced interest rate, than to risk having you default on the entire amount. The second reason is because, even at the reduced rate, the lender is still making a healthy profit. They have borrowed that money at a significantly lower rate–sometimes as much as 66 percent less than the rate they’ll be charging you. (That’s why the financial institutions have big buildings; they make huge amounts of profit.)
Credit counselors CAN save you money, there’s no doubt about that. But don’t be fooled into thinking that they work for YOU, because they don’t. In the end, credit card companies love credit counselors, because the counselors truly work for them. That’s why you don’t pay for credit counseling services. The credit card companies are happy to pay them for you.
Copyright
The consumer credit counseling business is a huge industry in America, since the average American is a mere three paychecks away from facing huge, potentially devastating financial difficulty. Each year, more than a million Americans turn to credit counselors to try to help themselves regain control of their financial burdens. But just how the credit counseling business works is a mystery to most consumers. What’s involved when you hire a credit counselor?
It may come as a bit of a shock, but the first thing you need to understand is that consumer credit counselors don’t work for YOU! That’s one reason their ads on television, radio, and in your email box shout, “Our services cost you nothing!” However, any business needs to derive income from somewhere, so if they’re not charging you, who does pay them? In truth, they work for the lenders. Here’s how it works:
Regardless of what their commercials would have you believe, credit counselors don’t renegotiate the overall amount of your debt–that is, the total principal balance you owe to your creditors. Instead, they negotiate with the various lenders to decrease your interest rates. For instance, let’s say that you’re paying somewhere around 18 percent on the charge card you want help with (some stores still charge as much as 21 percent). A credit counselor will contact the cardholder and negotiate a lower interest rate–sometimes as much as half the original rate.
That’s the good news. The not-so-good news is that your minimum payments will still be based on a 90/10 split, meaning that 90 percent of your monthly payment will still go toward paying interest on the card. That means, as is the case with any credit card payment, it will be well worth your while to pay a little more than the minimum each month, in order to whittle down your principal. It will save you significant amounts of money in the long run.
But how can credit card companies continue to make money by cutting interest rates in half, and what do they have to gain by doing so? The first reason is because they know that it’s better to get something, which they’ll do if you continue to pay them, even at a reduced interest rate, than to risk having you default on the entire amount. The second reason is because, even at the reduced rate, the lender is still making a healthy profit. They have borrowed that money at a significantly lower rate–sometimes as much as 66 percent less than the rate they’ll be charging you. (That’s why the financial institutions have big buildings; they make huge amounts of profit.)
Credit counselors CAN save you money, there’s no doubt about that. But don’t be fooled into thinking that they work for YOU, because they don’t. In the end, credit card companies love credit counselors, because the counselors truly work for them. That’s why you don’t pay for credit counseling services. The credit card companies are happy to pay them for you.
Copyright
consumer credit counseling service
cassinova2010 asked:
www.canadadebtconsolidationnow.com visit this site for consumer credit counseling service
Bernice
Credit Repair – Beware the Scam Artists!
Scott Zeeman asked:
Credit repair seems to be the buzzword today. With our economy taking a long ride on the recession train, it seems that dozens of new credit repair companies spring up every week. This leaves the consumer with a sometimes terrorizing ordeal of trying to make the right decision concerning having an outside source repair their credit.
You obviously must be very careful when choosing the right company to help you improve your credit. Let’s look at some of the warning signs to help you avoid the scam artists who are prevalent in this industry.
Number One- If a company or individual wants a large fee upfront before any work has been done, run, don’t walk to the next exit. Many of these predators charge $500-$2500 upfront and are making a very good living doing absolutely nothing! Buyer beware.
Number Two- Avoid the pushy salesman who wants to rush you into a decision. Legitimate credit repair companies already understand the pressures that are on consumers today and our respectful of the individual making an informed decision when they are ready.
Number Three- Do your homework! Check them out on the Better Business Bureau’ s website to see if there is any derogatory or negative information on the company. Many times I’ve discovered several complaints lodged against a company and gone elsewhere with my business. Also be aware that not every business will be listed in the BBB’s database.
Number Four- Go to Google and do a search for that company to see if there is any negative information floating around cyberspace. Many times you will find great information about a company to help you make your decision.
Number Five- Ask the credit repair company if they have any referrals of people that don’t mind being contacted to see if they were satisfied with their services. Most of them won’t give you any because they keep their customers private, however listen to the way they respond to you. Sometimes their tone and demeanor will reveal a whole lot about the company.
In my experience, the legitimate companies that are doing great work for people to improve their credit are extremely hard to find. Years ago, I personally went from enjoying an 824 FICO score down to below the 500s because I lost my business. I was determined to restore my credit, so I will went about educating myself on the credit industry. I have since restored my credit and enjoy helping other people do the same without being ripped off. Companies that can help you tremendously in restoring your credit can be found, but you have to be careful. Very few are honest and reputable and reasonable in their pricing. You must make sure they don’t charge you without providing professional services and they should not charge flat monthly fees or large up-front fees. Additionally, make sure they do not lock you into long-term contracts.
If you follow my advice, you will be miles ahead of the majority and will save yourself alot of time and agony as you pursue your goal of achieving great credit.
Angela
Credit repair seems to be the buzzword today. With our economy taking a long ride on the recession train, it seems that dozens of new credit repair companies spring up every week. This leaves the consumer with a sometimes terrorizing ordeal of trying to make the right decision concerning having an outside source repair their credit.
You obviously must be very careful when choosing the right company to help you improve your credit. Let’s look at some of the warning signs to help you avoid the scam artists who are prevalent in this industry.
Number One- If a company or individual wants a large fee upfront before any work has been done, run, don’t walk to the next exit. Many of these predators charge $500-$2500 upfront and are making a very good living doing absolutely nothing! Buyer beware.
Number Two- Avoid the pushy salesman who wants to rush you into a decision. Legitimate credit repair companies already understand the pressures that are on consumers today and our respectful of the individual making an informed decision when they are ready.
Number Three- Do your homework! Check them out on the Better Business Bureau’ s website to see if there is any derogatory or negative information on the company. Many times I’ve discovered several complaints lodged against a company and gone elsewhere with my business. Also be aware that not every business will be listed in the BBB’s database.
Number Four- Go to Google and do a search for that company to see if there is any negative information floating around cyberspace. Many times you will find great information about a company to help you make your decision.
Number Five- Ask the credit repair company if they have any referrals of people that don’t mind being contacted to see if they were satisfied with their services. Most of them won’t give you any because they keep their customers private, however listen to the way they respond to you. Sometimes their tone and demeanor will reveal a whole lot about the company.
In my experience, the legitimate companies that are doing great work for people to improve their credit are extremely hard to find. Years ago, I personally went from enjoying an 824 FICO score down to below the 500s because I lost my business. I was determined to restore my credit, so I will went about educating myself on the credit industry. I have since restored my credit and enjoy helping other people do the same without being ripped off. Companies that can help you tremendously in restoring your credit can be found, but you have to be careful. Very few are honest and reputable and reasonable in their pricing. You must make sure they don’t charge you without providing professional services and they should not charge flat monthly fees or large up-front fees. Additionally, make sure they do not lock you into long-term contracts.
If you follow my advice, you will be miles ahead of the majority and will save yourself alot of time and agony as you pursue your goal of achieving great credit.
Angela
Credit Repair Specialists – How to Pick a Credit Repair Specialist
Tim Phelan asked:
At the same time, a large amount of these people in debt are seeing their credit scores go down as they begin to miss payments, borrow too much money and/or have too many different credit cards.
So how can these people repair their credit? Many decide to get help from credit repair specialists since they have no experience in repairing credit themselves.
Once the person in debt becomes more financially stable, which is the first step to repairing credit, the next step is finding a good experienced company that specializes in credit repair. Here’s some tips on how to do this and I certainly do have experience in this area having had severe credit problems in my past:
1. You want to look for a company that has been around for more than just a few short years. Experience is very important in repairing credit. The specialists have to know how to talk to the credit bureaus, what to expect and who to contact. It’s not as simple as some may think and having a specialist does make a difference.
2. The best way that I found on how to check a credit repair company is by using the good old Better Business Bureau, also known as the BBB. At the BBB site they warn people about credit repair companies who are taking advantage of people by being too costly or even illegal. The number of complaints to the BBB about credit repair companies has risen three straight years to a record level.
Now, what you are looking for when you look at a company isn’t one that doesn’t get any complaints at all, because there will be some for even the best companies in this niche according to the BBB. What you are looking for is a company with experience that the BBB says satisfactorily handles complaints. Believe it or not, the BBB says sometimes when they get complaints on some of these credit repair companies they can’t even track down the companies. Or the companies refuse to take steps to resolve issues.
When you look at the BBB report make sure it first of all says the company has a satisfactory record. Then see what programs the company is participating in with the BBB, such as the arbitration program which is desired as the client. Another thing to look for is the actual complaints the company has had and how they handled them. The BBB will let you see this information. This is valuable information in helping you decide on a company.
3. Look for testimonials from former clients. Video testimonials are preferred instead of just text.
4. Look for a company that has a clear refund policy.
5. Don’t choose a company that requires you to pay a large fee ahead of time. A company that has a month to month fee that can be canceled at anytime is preferred.
If you are careful and follow these tips you can be on your way to repairing your credit.
Jerome
At the same time, a large amount of these people in debt are seeing their credit scores go down as they begin to miss payments, borrow too much money and/or have too many different credit cards.
So how can these people repair their credit? Many decide to get help from credit repair specialists since they have no experience in repairing credit themselves.
Once the person in debt becomes more financially stable, which is the first step to repairing credit, the next step is finding a good experienced company that specializes in credit repair. Here’s some tips on how to do this and I certainly do have experience in this area having had severe credit problems in my past:
1. You want to look for a company that has been around for more than just a few short years. Experience is very important in repairing credit. The specialists have to know how to talk to the credit bureaus, what to expect and who to contact. It’s not as simple as some may think and having a specialist does make a difference.
2. The best way that I found on how to check a credit repair company is by using the good old Better Business Bureau, also known as the BBB. At the BBB site they warn people about credit repair companies who are taking advantage of people by being too costly or even illegal. The number of complaints to the BBB about credit repair companies has risen three straight years to a record level.
Now, what you are looking for when you look at a company isn’t one that doesn’t get any complaints at all, because there will be some for even the best companies in this niche according to the BBB. What you are looking for is a company with experience that the BBB says satisfactorily handles complaints. Believe it or not, the BBB says sometimes when they get complaints on some of these credit repair companies they can’t even track down the companies. Or the companies refuse to take steps to resolve issues.
When you look at the BBB report make sure it first of all says the company has a satisfactory record. Then see what programs the company is participating in with the BBB, such as the arbitration program which is desired as the client. Another thing to look for is the actual complaints the company has had and how they handled them. The BBB will let you see this information. This is valuable information in helping you decide on a company.
3. Look for testimonials from former clients. Video testimonials are preferred instead of just text.
4. Look for a company that has a clear refund policy.
5. Don’t choose a company that requires you to pay a large fee ahead of time. A company that has a month to month fee that can be canceled at anytime is preferred.
If you are careful and follow these tips you can be on your way to repairing your credit.
Jerome
Consumer Credit Counseling
ClearpointCCS asked:
Understand the most important factor of your credit score and how it determines your financial future!
Lance