When analyzing financing options or debt relief issues many people forget to include the tax implications of one strategy over another. Including tax implications in your scenarios can become very complicated, which is why it is always handy to have a computer program such as Quicken to help you crunch the numbers.

Here are a few simple guidelines to keep in mind. Continue reading →

This is a fascinating story about a young student’s battle with credit card collections. Sadly, her story is common now a days. More and more Americans are getting themselves deeper and deeper into debt.

Read the Full Story Here

What is disturbing is the unethical and questionable tactics many collection agencies use to extort money from debtors.

If you feel that you are being abused by a creditor or collection agency, refer to the Fair Debt Collection Practices Act.

Credit reports are often regarded with dread, especially by those who have entered turbulent financial waters. But reality is never your enemy, even when it is unpleasant. In order to promote financial health, and resolve any debt problems you may have, it’s essential to have the best information possible about your credit status. That information is found - both by the lender and, more importantly, by you - in your credit reports. Continue reading →

FICO is an acronym for the Fair Isaac Corporation. It is a number between 400 and 800 (400 being worst and 800 being best) that your ranks credit worthiness according to a proprietary algorithm invented by the company.How does a FICO score effect you? 

Banks, mortgage companies, credit card issuers and other lenders will use your FICO score as a very important criteria for deciding whether to make a loan, and at what interest rate. Other things being equal the higher your score the better interest rate you can obtain.

What effects a FICO score?

Any score below about 620 is considered marginal and below 580 is decidedly poor. 720 and above is very good to excellent. A range between 620 and 720 represents a kind of gray area, where items other than your FICO will play a more significant role in loan decisions. Late payments will lower your score, and the more of them and the later they are, the more heavily the score is affected. The total amount of debt carried per month is another element. A less important factor is the number of credit cards and credit checks performed.

Of course, many times all other things are not equal. Prevailing interest rates in general, the current demand for loans, the general economy and other factors have a heavy influence on the willingness of lenders to lend and at what rate.

Also, the entire lending industry has undergone at least two significant shifts in the last 20 years. With the increasing use of computers and modern financial techniques, underwriting loans is done very differently today. Also, not surprisingly, the Internet has shifted finance to a very different mode of working.

Even with all these changes, though - or, perhaps in part because of them - the FICO score remains a primary tool for lenders. It may not determine the final decision, but it definitely influences the ‘first cut’ when presented with a stack of applications to approve or disapprove.

How can you fix your FICO score? 

Fortunately for those who have financially slipped, there are alternatives. Though your FICO may be low you nonetheless have several options. The first thing to do is set into motion a plan to improve your score.

As you work to remove those outstanding overdue debts - either through paying them off or negotiating with the lender - your FICO will gradually improve. The age of 30 day past due, 60 day past due (or longer) late payments is a factor in calculating your FICO.

At the same time, you can shop around for lenders willing to take a higher risk by lending you money. The downside is those loans almost always carry a higher interest rate. Your best approach is to try to forego borrowing for as long as possible while you work to improve your debt situation. Your FICO will follow suit.

Most people are not good at managing their finances. it’s a skill that has to be learned. But those who do get themselves into money problems seek the assistance of a debt counselor.

Debt counselors can help anybody in a financial jam, but they can only do so much.

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Credit Counseling companies can offer a great service. They can help you create a debt management program to help you eliminate or reduce your outstanding debt.

However, there are many credit counseling services that are fraudulent. Learn to protect yourself from credit counseling scams.

Here are a few things to look out for when choosing a credit counseling service.

Continue reading →

How easy is it to eliminate credit card debt. If you are determined to get yourself out of the money pit, then “Where there is will, there is way”.

No matter what method you use to eliminate your credit card debt, no matter what debt assistance company you apply for, your will power is vital to your success. That is, IF YOU WANT TO eliminate your credit card debt. If you are ready to take control of your finances and take responsibility of your actions then it is eliminating your credit card debt is relatively easy to do.

Your will power and drive is what will help you control your spending. Your determination will help you make wise choices and analyze your current financial situation. While a credit counselor can help you plan a budget, you are the one who will ultimately have to carry it out.

You are responsible for every aspect of your credit card debt elimination. One way of strengthening your will power, is to imagine how happy your life will be after your debt is gone. Imagine the freedom that you will get after you eliminate credit card debt.

Not only that, but just think about all these good things and build your confidence and your will power to eliminate credit card debt. You will be amazed at how much you can do once you set your mind to it.

Remember “Where there is will, there is way”.