Free Credit Report Repair Guide

How to Reduce Your Debt in 5 Easy Steps
By Chileshe Mwape

If you have incurred substantial personal debt, consider these options: budgeting, debt consolidation, credit counselling from a reputable organization and working with your creditors. You will need to choose a debt reduction method that will work best for you? The method you use will depend on your level of debt, how much spare money you have, your level of discipline, and how quickly you want to get out of debt.

1. REALISTIC BUDGETING

The first step towards taking control of your financial situation is to do a realistic assessment of your income and expenditure. Work out how much you earn (your total income) and write this figure down. Then total your expenses. This is how much you spend each month for rent, fuel, food, clothing, heating, water, electricity and other bills. The difference between your total income and your total expenses is the amount of money available to pay your creditors or lenders.

Decide if there are any monthly expenses that you can reduce or live without. Focus on lowering your expenses so that you can increase your income. You’ll be amazed at how many things you can do without.

a) Debt Reduction Methods

Choose a debt reduction method that fits your situation and gives the maximum benefit. You could choose to focus on repaying debts that are most important to your credit rating or to maintaining your family’s safety. Or you can start by paying off those debts with the highest interest rate thus reducing the total spent on interest charges and increasing the amount available to pay off debt.

Alternatively, you could focus on paying off bills with the lowest balances. Then the money used for those payments can go to pay off other debts.

If your credit payments (excluding mortgages) exceed 15-20% of your take home pay, you can work with creditors to set up monthly instalments that are more in line with your income.

b) Credit Cards

Transfer your credit card debts (balance) to a card offering an introductory 0% interest rate for balance transfers. Make sure you keep up the repayments and then just before your 0% introductory offer is up, apply for another 0% card, transfer the balance over before you starting paying interest – and repeat. With a good credit record, you could do this for years, moving your debt from one card to another until it’s paid off.

3. DEBT CONSOLIDATION

This is when you use a new loan to pay off multiple debts. Your monthly payment will be lower because repayment is spread out over a longer period of time. This will usually eliminate the hassle of having multiple creditors, multiple bills, and multiple payments to make. It’s very important not to take out any additional loans until your consolidation loan has been repaid. Borrowing against your home is a cheap way to raise money, but it’s risky. If you can’t make the payments - or if your payments are late - you could lose your home.

However, you could replace expensive debts with a cheaper personal loan (unsecured loan). Before taking on new debts, you might want to check out your credit history.

4. CREDIT COUNSELING

Some people are not disciplined enough to create a workable budget and stick to it. If you can’t work out a repayment plan with your creditors and you can’t keep track of mounting bills, consider contacting a credit counselling organization or a financial advisor. In the UK you can use free debt counselling services such as the Consumer Credit Counselling, the National Debtline and the Citizens Advice Bureau. Similar services are available in the US.

5. CONTACTING YOUR CREDITORS

A creditor is a company or person to whom you owe money. Many people struggling financially ignore debts and fear contacting their creditors. This reaction will damage your credit record. Creditors or lenders may take action against you in an effort to get payment. If you’re finding it hard to get your bills paid, be the one to contact creditors. They will be more willing to work with you. Work out arrangements that satisfy you both. Explain to each lender that you aim to repay each debt in full over time, but that they must accept reduced repayments for now. Decide how much you can pay them each month and set up a debt repayment plan.

Conclusion
If you’re serious about reducing your debt you should stop spending on your credit cards and stop taking out new loans. To increase your income, consider finding a second job or a lodger. Claim every state benefit that you qualify for and work on cutting down your expenses. Sell stuff that you don’t need on eBay or at Car Boot fairs. Put enough money aside for emergencies, but use the bulk of your savings to pay off debt. Debts usually cost you far more in interest than you gain on your savings. Also, if you have a fairly good credit record, you should transfer your debts to cheaper lenders. Finally, shop around for better deals for services and products that you use.

Disclaimer: This article does not constitute financial advice. If you require such advice, you should seek appropriate professional guidance.

Copyright © 2005. Chileshe Mwape writes for Debt Consolidation Loans UK: http://www.best-debt-consolidation-loan.co.uk/. Visit our site to consolidate debts and apply for a loan online.

This article may be reprinted as long as all the above links are active and clickable.

Article Source: http://EzineArticles.com/

+++++++++++++++++++++++++++++++++++++++++++++++

• Credit Report Repair blog
• Credit Report Repair
• Debt Consolidation- Free Credit Report - Eliminate Credit Card Debt

Credit Repair: How To Deal With Your Creditors
By Douglas Hanna

If you are in danger of credit problems because you have more debts than you can handle, there are things you can do at least keep your creditors reasonably happy.

First, prioritize your debts or rank them in terms of the ones that can give you the most trouble the quickest. If you’re three months behind on your utility bill and the company is threatening to cut off your power, you should deal with this debt first.

Second, be sure to keep an accurate log of all phone conversations with creditors and copies of all correspondence.

This way, you will have a good record of what’s going on, to whom you spoke last, the date of that conversation and its result. It’s not uncommon for large corporations to have different people or even different departments contacting you about late or missed payments. If you keep accurate records, you will always be able to defend yourself against the claim that you have been unresponsive or uncooperative.

It’s kind of human nature to want to run away and hide from creditors. But it’s better to be aggressive. If you know you are not going to be able to meet a mortgage or credit card payment, call the company before the payment is due. Tell the company’s representative why you are having money troubles. Be sure to give a real reason for your problems such as a divorce or loss of a job, and not just some feeble excuse.

If you can give your creditors a real reason for being in financial trouble, you may find that they are sympathetic and willing to work with you.

Your next step is to arrange a payment plan. When you contact your creditors’ representatives, explain that you know you are behind in your payments but that you want t make a payment arrangement. Let them know what you can afford to pay this month and the next. Make certain they know you intend to make full payment eventually.

You might also see if one or more of your creditors would be willing to let you skip a month’s payment.
Be sure to get all payment plans in writing. If the company’s representative does not volunteer to mail you the plan in writing, send a letter requesting that he or she do so.
Calculate just how much you can afford to pay a creditor before contacting the company. Then, do not agree to pay any more than this, no matter what the company demands. It may take a number of phone calls before the company agrees to a reduced payment. If the company keeps saying “no” to your offer, keep calling until you get a different answer. Or ask to speak to the representative’s supervisor as he or she may have more authority to work out a plan with you.

Finally, always try to negotiate. Your landlord may be willing to let you miss a payment now if you make it up at the end of the lease.

If you have a mortgage, ask your lender if they would take a 60 percent payment now with the promise to make this up over the next few months. If you will be paying late, explain the circumstances and ask that at least they waive the late fees.

If you are having trouble paying for your utilities, see if you can switch to a budget plan or set up a partial payment plan. Most utilities will not cut off your service so long as you are making some kind of payment.

You could sell your car and purchase a cheaper one if a car payment is a problem. If you’re going to make a late payment, be sure to let the lender know in advance. Otherwise, you might find your car has been repossessed. You might ask for an extension of the loan. For example, if you have 36 months left to pay, you might ask to extend this to 42 months in return for lower monthly payments. And if you are leasing a car, see if you can terminate the lease early. All the leasing company can say is “no.”

Being in serious debt is never any fun. But if you tell your creditors what you will do and then do what you say, things will get better.

Article by Douglas Hanna. Douglas is a retired advertising and marketing executive and author of the book “198 Tips & Tricks to Save Money and live Better.” He is the webmaster of http://www.all-in-one-info.com, a free resource for information on a variety of subjects. Please visit his site to subscribe to his free newsletter, “Money Saving Tips & Tricks.”

Article Source: http://EzineArticles.com/

+++++++++++++++++++++++++++++++++++++++++++++++

• Credit Report Repair blog
• Credit Report Repair
• Debt Consolidation- Free Credit Report - Eliminate Credit Card Debt

Your Credit Card May Be Costing More Than You Think!
By Michael Ambrosio

Do you know what your credit card is truly costing you? Many
people assume that they do, but aren’t familiar with the
hidden fees that many credit card companies are charging. In
fact, if you don’t keep close tabs on your credit card, you
may end up paying hundreds of extra dollars per year—without
ever really knowing it!

And if you’re trying to budget your money, those hidden fees
can add up!

Let’s take a look at some of the most common credit card
fees, and then talk about how you can avoid them.

Grace Periods

In the past, we could always count on grace periods before we
ever had to start paying interest. For example, if we
charged our card to the limit, and could get it paid off
before the grace period expired, then it would be like a free
loan—we wouldn’t have to pay any interest.

Unfortunately, the credit card companies are making this
harder and harder to do. For starters, many of them have
reduced the traditional 30 day grace period to 20-25 days.

If you hold a credit card, but didn’t realize this, then
you’re likely paying interest without even knowing it!
What’s worse is that more and more credit card companies are
eliminating grace periods altogether. That means if you
charged lunch today at noon, at 12:01 pm, you would be
already paying interest on it.

How about your credit card? You need to take a close look at
the fine print and find out what kind of grace period you
have. If your credit card company has reduced it
significantly, or eliminated it altogether, you should
seriously consider canceling it and getting a more
user-friendly card.

Late Fees

When is the last time you checked to see what amount your
credit card company charges you for a late fee? The truth is
that these fees have doubled in just the past ten years, and
that, combined with the reduced grace period, means that the
credit card companies are raking in a lot of dough on late
fees!

If it’s possible, you should try and send off the check (or
electronic transfer) the day that you receive your credit
card bill. There are three reasons why it’s important never
to be late. The first is obvious; you will want to do
everything in your power to avoid a hefty late fee. Next, if
you are late, it will likely be reported to the credit agency
and you will have a bad mark on your credit report. The
third is the direst, and we’ll discuss it below.

Interest Rate Hikes

Did you know that if you are late–even one time—on your
credit card payment, the company will in all likelihood raise
your interest rates? That’s right; one late payment gives
them the right to do it. What’s more, that isn’t just
limited to your credit card payment. Any late payments from
any lender that show up on your credit report gives them the
justification to raise your rates, so be careful!

Copyright (c)2005 by Michael Ambrosio. You may publish this
article on your site or in your newsletter provided this
resource box remains in tact. Michael Ambrosio is the author
of many credit related articles. Visit his website today:
http://www.yourcreditandyou.com and rebuild your credit.

+++++++++++++++++++++++++++++

• Credit Report Repair Directory
• Free Credit Report Repair Blog
• Free Credit Report Repair

What Your Mama Never Told You About Debt Consolidation Services
By Mike McDowski

When someone is extremely deep in debt, and he or she has no other options to prevent bankruptcy, debt consolidation can be his or her savior. Debt consolidation can also be a very wise choice for someone who has many debts on high interest credit cards. Debt consolidation, quite simply, is the process of taking loans and debts and bringing them into one low-interest loan that can be paid off over varying periods. This is a very good choice for many people because it saves them from having to file bankruptcy. Debt consolidation merely requires collateral (such as a home or vehicle) for the interest rates to be lowered and the customer to be on his or her way to debt free living.

Most people understand the basics of debt consolidation, however there are several dos and don’ts in the world of consolidating debt. Most importantly, make sure you research the company before you choose to consolidate your debt with it. Some companies will take advantage of unassuming consumers. Here are a few underhanded tricks unfavorable companies will employ when you are trying to consolidate your debt:

1. Some companies will take advantage of high interest loans, and the benefit of consolidating those loans, by charging exceptionally high fees in the debt consolidation loan. These fees can sometimes even be near the state maximum for mortgage fees. Any company with fees that seem unnaturally high should not be your choice for debt consolidation.

2. Watch out for companies that wait until you are “backed into a corner.” Some companies will let a customer get further and further into debt until the customer is forced to refinance. Someone who has put his or her house will be willing to refinance in order to save his or her collateral (again, usually the home). The unscrupulous company will then charge an excessive refinancing fee.

3. Lastly, be wary of companies that employ “predatory lending.” Predatory lending is when a debt consolidation company allows a customer to be in such debt that they are unable to find another debt consolidator to help them with the debt. The person is forced to stay with their current company and sometimes even file bankruptcy anyway. The company that knowingly led the customer into the dregs of debt comes out on top. Most companies don’t use predatory lending, but it is always a good idea to be extra careful when choosing a debt consolidator.

Good debt consolidation companies naturally don’t do anything underhanded. On the contrary, a worthwhile company offers the customer all the information he or she will ever need about their loans and interest. The company is helpful and concerned for the financial safety of their customers. Companies that realize that the decision to consolidate one’s debt is a weighty one are usually the best companies to opt for. Approaching each case uniquely is the sign of a debt consolidator that understands the importance of every customer.

Debt consolidation can be a weighty decision for many people to make. If you keep in mind the dos and don’ts of choosing a debt consolidation company, you will have no worries. Some companies try underhanded methods to increase their profits, but if you know what to watch out for, those companies cannot swindle you. Debt consolidation is a wise choice for anyone who has high interest credit cards, and substantial loans. Follow my advice, and I’m sure that you’ll be debt free sooner than you can say, “Consolidate!”

Mike McDowski writes about a variety of financial matters and advocates debt consolidation with Credit Solutions ( http://www.creditsolutions.com ).

+++++++++++++++++++++++++++++

• Credit Report Repair Directory
• Free Credit Report Repair Blog
• Free Credit Report Repair