Family Issues

Rather than try to futilely escape the process of credit checks, why not simply try to beat and win? If the key to passing credit checks is within reach, why not take it? Let’s see. The only reason why you could be afraid of undergoing credit checks is when you have something to hide. Do you? Or maybe, you just don’t know whether your credit reputation is either good or bad so you’re still feeling 50/50 about your chances of passing credit checks. But no matter because the only way to conquer fear is to face fear itself. And here’s how you shall do it.

Step Uno requires you to know about your present FICO scores. Ask any finance whiz and they’ll tell you that passing credit checks would always come down to your FICO scores. And whether you have a good or bad FICO score, it’s always best for the individual to consistently check your FICO scores because the earlier you can correct mistakes or errors in your report, the better. When I say regular, doing it semi-annually is good enough.

Now, back to your FICO scores: there are what we like to call the Magic Three credit bureaus in the country and each credit bureau has its own credit rating systems. These credit bureaus are known as Experian, Equifax and TransUnion. Do list down their contact numbers because if I have my way with you guys, you’ll soon be forced to get to know a representative from each credit bureau very well, indeed. But don’t worry because everything we’re going to do is legal and ethical.

Nobody knows just how it is that each credit bureau rates an individual’s credit worthiness but we can hazard a safe guess and tell you that your FICO score is affected by your payment habits, the number of loans and credit cards in your name and how much credit do you have at present. Anyway, whatever their rating systems are, we can also be sure that these credit bureaus are able to collect information about us from banks, merchants, lending companies, government agencies and maybe even your very own landlord.

Step Dos in our credit repair goals would be studying our credit reports and checking for inconsistencies. It’s time to hit the books for this step if you’re determined to fix bad credit all by your lonesome, sans outside professional help.

Step Tres is the most difficult thing to do because it asks you the equivalent of asking an alcoholic to stay away from liquor: it’s time to change your spending habits. Pay on time and so on to make sure that next time, you won’t be afraid of undergoing credit checks.

[Tags]Bad Credit, Debt, Bankruptcy, Credit Repair, Money Lenders, Credit Cards, budget, Unpaid Debts, Credit Reports[/Tags]

Don’t fool yourself into thinking that you’ll never be subjected to credit checks even at least once in your lives. Unless you’re as rich as Donald Trump or you have the sort of financial credibility that only the name of the Queen of England could have, going through a credit check is a normal process in the world of finance.
There are a number of reasons why you have to undergo a credit check.

The most common reason behind credit checks are when you’re applying for a loan, a mortgage – whether it’s for a car or a new house – or a credit card. Some employers also require applicants to undergo a credit check if they’re about to hold a position of importance. If you want to make sure that you pass the credit bureaus’ investigation with flying colors, here are a few tips that may help you.

If you’re afraid about passing credit checks then by all probabilities, you’re sure to have bad credit already. Bad credit is exemplified by having too much credit cards and using up almost all its balances, applying for too many mortgages and loans, having problems keeping up with payments and the likes. Now, the first step to fixing bad credit is obtaining copies of your credit report from the three major bureaus of the country – Equifax, Experian and TransUnion. Do keep those names in mind because experts advise you to regularly undergo credit checks – at least every six months – so starting today, you’re going to have a wonderfully close relationship with those three credit bureaus.

Now that you have the three credit reports on your hands, the next step to take is more of a decision type – it’s now time to decide whether you want to continue with the credit check process alone or with the help of professionals.

Admittedly, there are a lot of free advice that you can obtain from just searching the Internet and there are of course a lot of books that are out in the market and dealing with credit repair. But reading and learning about fixing bad credit and credit checks is quite – no make that totally – different from actually doing it. If you don’t think you’re up to the task of disputing erroneous items, negotiating with your creditors and the likes, maybe you’re better off hiring the services of the professionals.

Whatever decision you make, the last step shall be the same. Never ever let yourself fall for the same trap once more. Pay your bills on time and avoid overextending your loans.

[Tags]Bad Credit, Debt, Bankruptcy, Credit Repair, Money Lenders, Credit Cards, budget, Unpaid Debts, Credit Reports[/Tags]

1. Payday loans become a trap and are not used only once as originally claimed by the industry.

Borrowing money from payday companies are usually the alternatives of consumers who are in debt.  Repaying the loan has been a problem for these persons because of the high rates.  As a result, they end up extending the loan by paying $17.50 for every $100 many times over. Consequently, they pay much more than what they borrowed.
Payday lenders assert that they are the lone alternative for financially troubled consumers. The reality is that payday loans complicate the problem.

2. Payday loan rates are way too high, especially given their low risk.

Because of the risks and the high loss ratio, the industry says that the extremely high fees are justified.  Payday loans continue to expand in the state of California and around the United States.  Since it was legalized in January 1, 1997, more than 3,500 payday loan stores have been operating in the state.  There is high profit in the industry.

3. Payday lenders are virtually unregulated.

Compared to consumer finance lenders, payday lenders are virtually uncontrolled

4. Consumers are easily deceived by payday loans.

When consumers are required to pay a post-dated check, the consumers open themselves to illegal threats or collection practices.  For instance, they will be threatened with jail for passing a bounced check, even though the law specifically exempts them from prosecution if the check bounces. Borrowers often issue a check prior to the due date, resulting to a bounced check and consequently, more fees on borrowers.

ALTERNATIVES TO PAYDAY LOANS

A payday loan is not the only option for financial debt problems.  Even before payday loans, dealing with their finances have not been a problem for consumers.

1. Negotiate a payment plan with creditors. Setting up a payment plan to pay financial debts is a cheaper alternative than payday loans.  Many lenders allow partial payments when a payment plan is in place.

2. Credit cards/Secured credit cards. Another alternative is a secured credit card. A secured card is basically a credit card packaged for a savings account ($500 for example). The cost of the savings account serves as the card’s credit line. The amount charged to the card is secured by the funds of the account.

3. Advances from employers. Many employers allow paycheck advances to employees. This is not a loan and is obviously a better choice compared to payday loans.

4. Credit unions. Credit union members are granted small, short-term loans. Joining is relatively easy now that requirements for affiliation are less strict.

5. Overdraft protection. Checking accounts with overdraft protection is offered by most banks. While payday lenders maintain that they have lower fees than bounced check fees, preventing a check to bounce is a much better option in the first place.

6. Lines of credit from finance lenders. Consumers with poor credit rating are granted a small credit line by finance lenders. Amount ranges from $2,000-$5,000 with interest rates ranging 25-35% APR.

[Tags]Bad Credit, Debt, Bankruptcy, Credit Repair, Money Lenders, Credit Cards, budget, Unpaid Debts, Credit Reports[/Tags]

Payday loan lenders are required by CFSA (Consumer Financial Services Association of America) to inform their clients of two important things.  First, that payday loans may be an honorable way to meet emergency financial needs but it is not a long-term solution to a person’s financial woes.  And second, that a person who has persistent financial problems may benefit from credit counseling services.  Such services are offered by credit counseling agencies.  So, how exactly does a counseling agency help a person who is weighed down with debts?

A credit counseling agency helps a person solve his financial problems in two ways.  The first is that the agency will structure a way for the borrower to settle his present debts.  And the second is that the agency will help the person prevent future financial problems.

In helping a person settle his debts, the credit counseling agency negotiates with the person’s creditor.  The agency intends to accomplish three goals during the negotiations.  First is that the penalties and late fees may be waived.  This will certainly reduce the amount owed by the person.  Second is that the term of the loan may be extended.  When the term is extended, a person may have more time to find means to settle his debts.  Also, a loan with a longer period term meant lower monthly dues.  And the third goal is that the interest rates may be decreased.  Lower interest rates meant lower and more affordable monthly payments.

The credit counseling agency may also advise the client to start a debt repayment plan.  In such a plan, the set-up will be that each month, the client will pay a certain amount to the credit counseling agency.  This amount will be then paid to the client’s creditors.  This debt repayment plan is usually done if the biggest creditor is a credit card company.  This is because most counseling agencies are primarily funded by credit card companies.  But before a client plunges ahead with the debt repayment plan, he must carefully analyze the monthly payment being suggested by the counseling agency.  He must be critically honest of himself and decide whether he can afford the monthly dues or not.

In helping a person avoid future debt problems, the counselor assigned will provide advice and educational materials.  The advices and materials will be all about budgeting and money management.  The client is informed, guided, and inspired to do his budgeting.  He is shown ways on how to manage his finances better.  And he is encouraged to foster the attitude of saving money.

[Tags]Bad Credit, Debt, Bankruptcy, Credit Repair, Money Lenders, Credit Cards, budget, Unpaid Debts, Credit Reports[/Tags]

People who are constant borrowers of payday loans, car loans, and other types of loans, and people who are experiencing the heavy burden of huge debts and unpaid accounts are advised to a credit counseling agency.

Hypothetically, what the credit counseling agency can do to help a client get out of debt can also be carried out by any person, alone by himself.  Unfortunately, a person who is in the middle of such financial quagmire is most likely a person who doesn’t have the needed discipline to climb out of his debts alone.  Such lack of discipline and control may have been the culprit for his current undesirable situation.  Thus, credit counseling agencies are needed.

Like any industry or field, there good credit counseling agencies and then there are dishonest ones.  To be sure that the agency you approach has impeccable reputation, determine if the agency is a member of either the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).  These two, NFCC and AICCCA, are the most highly esteemed networks of credit counseling agencies.  A counseling agency, which is member of any of these two, has underwent a strict and intensive accreditation process which is carried out by several independent organizations.  The practices of such agency will be meticulously reviewed and must be found highly ethical and effective before the agency can become a member of either network.

Once you find out that the credit counseling agency that your are considering is a member of either NFCC or AICCCA, the next thing to investigate is whether this agency has faced complaints.  To check this, you may consult the State Attorney General’s Office, the Better Business Bureau, and the local Consumer Protection Agency.  If a client has filed a complaint against the credit counseling agency you are considering, then it would be best to find another one.

After a credit counseling agency has passed both investigations, the last step a person may take before he commits himself is to ask pertinent questions about the agency and the services it offers.  He must know the credentials and training of the credit counselors.  This is very important since the very reason a person sought the help of a credit counseling agency is that he needs professional mediation and intervention.  And last, but not the least, a potential client must know exactly the fees and the payment scheme when the agency is hired.  The client must know whether he will be charged with monthly fees or that he has to pay something up front.  These things should be clear.  The client is, after all, trying to get out of debt, and not add more to his burgeoning problems.

If the client is comfortable and assured that the agency can help him, then that is the time that he will commit himself.

[Tags]Bad Credit, Debt, Bankruptcy, Credit Repair, Money Lenders, Credit Cards, budget, Unpaid Debts, Credit Reports[/Tags]