Today everyone is looking for a path to financial freedom during this difficult economic climate.  They are looking for ways to safeguard their reputation and keep their buying and borrowing power.

The consumer knows that loans, bills, mortgages and credit card charges can increase very quickly, in particular the credit cards used for day to day expenses, it is a challenge to maintain the monthly payments.  So in order to safeguard the consumer’s reputation and credit score rating, they need to review and relearn ways to protect themselves.

Some of the things the consumer needs to revisit are the following key ideas:

• Am I borrowing wisely and paying back promptly?
• Have I identified, avoided and recovered from various financial pitfalls?
• Have a gotten a recent copy of my credit report and do I understand it?
• Does my family have a financial plan for the future

The key to being a good credit risk is based upon the consumer’s credit score.  This score is a numerical number assigned to the consumer based upon their credit history. This history is based upon number of opened and closed accounts, payment history, including late or missing payments and collection referral, original credit limit, current balances, etc. The higher your credit score is the better your ability to borrow at more favorable interest rates.  The lower the score the consumer is charged a higher interest rate or decline altogether.

Basically, the consumer needs to obtain a copy of their credit report from one of the following three credit bureaus: Equifax, Experian or TransUnion.  Once you have this report, the consumer needs to set down and review this report for accurate information. 

 In the beginning, the consumer used the card judiciously and paid off the balance in full monthly. However over time, the consumer started paying only the monthly minimum payment. From time to time because the economic climate was on the upswing, the consumer had equity in their homes. Because of the equity, the consumer would refinance their homes at a lower rate and take monies out to pay off their unsecured debt.  This way of handling finances was alright as long as the economic was in a positive position.

Due to today’s economy – consumers are facing financial hardships, lost of job, reduced salaries, and divorce or faced a medical emergency along with the adjusted interest rate on their mortgages and increased unsecured credit card debt. 

The consumers are faced with the reality of how to get out of debt. In most cases, this is the first time many consumers were faced with these uncertain financial times.  So the consumer start looking for ways to pay off their financial obligations.

One of the options the consumer is selecting is a debt settlement program.  Debt settlement is a method by which a third party negotiates with the lenders to reduce your obligation by up to 50% of the outstanding debt.  The consumer puts aside a set amount of monies each month into a “trust/escrow” account over a period of 12 to 48 months depending upon the amount of their credit card debt.  The debt settlement company starts to negotiate when at least half of the lowest balance is in the account.  This proceed is repeated until all debts are settled.

This is not an easy fix.  However, the amount of monies placed into the trust/escrow” account is normally less than the combined monthly minimum payments. By entering into this program, it will show the lender you want to repay your obligations but need help because of the consumer’s most recent financial hardship. The majority of lenders are willing to accept a settlement of half because if the consumer files bankruptcy the odds are the lenders will receive nothing.  By receiving nothing this affects the lenders bottom line and is reflects as loan losses on their financial statements. So call your debt settlement expert today to discuss

The majority of consumers want to payoff their obligation either monthly or in full. However they are having a hard time of making ends meet in today economic climate.  The consumer is on an emotional roller coaster and is seeking ways to make ends meet.

Today’s consumers are overwhelmed with unsecured credit card debt.  They are unable to maintain making the monthly minimum payments on their credit cards.  The reason why the consumer is seeking some type of debt relief is because they have incurred a recent financial hardship.

One of the options that consumers are considering is using a debt settlement company.  A debt settlement company is a third party which will negotiate with the lenders on behalf of the consumer.  In most cases, a debt settlement company is able to reduce the consumer’s outstanding balances by up to 40% to 50%.  So considering that a consumer may have more than $10,000 in unsecured credit cards this debt might be cut in half.  The savings to the consumer is monthly interest on their cards and the debt reduced from $10,000 to $5,000. 

The consumer is asking, “Why would a lender accept half of the obligation due to them.”  The answer is simple. If the consumer files for bankruptcy, historically there is no money available for the unsecured lenders. In other words, the lenders are willing to take something rather than receive nothing on the obligation.  If a consumer does file bankruptcy then the lender has to write-off as a bad debt this obligation which affects their bottom line.

Using a debt settlement program is not a quick fix or an overnight solution to the consumer’s situation. However what it does is allow the consumer to save monies into a “trust/escrow” account over a period of time.  Normally, this amount is less than what their combined monthly minimum payments are on the debt.  The debt settlement company begins negotiation with the lender when at least half the monies are saved against the lowest outstanding debt.

Debt settlement is an option for many consumers today. Therefore, call your debt settlement expert today to discuss how they can help you.

Adversity comes upon us when we least expect.  Were asked to take a reduction in pay or perhaps we experience a job loss. As a consumer who is unable to meet the  monthly minimum credit card payments you need to find a way out of this financial situation!

First thoughts are to just do nothing and walk away from the debt.  But that is not the right solution. So you need to start investigating different  methods to correct your financial situation.

The most often methods discussed for consumers in trouble are:

• Consolidation Loan
• Home Equity Loan
• Consumer Consulting Services
• Bankruptcy
• Debt Settlement

In a prefect world, the first three programs would help rearrange the financial situation.  Since you would have money or equity in your residence to qualify for a loan or need assistance in understanding how to better manage my money.

Bankruptcy should always be the last step when considering how to get out of debt.  As a consumer,  do not want to walk away from my debt but somehow pay them back to the lenders. Bankruptcy needs to be discussed with an attorney, who can explain the legal process and its affect on the consumer.

Therefore, debt settlement was a more managed approach to resolving my financial situation.  The one lesson learned during this financial downturn was to tighten my belt and save for the future.  I should use my credit cards only when I can actually repay each month what I spend on the card.  I have learned my lesson. 

So now as a consumer, struggling with credit card debt over $10,000 now is the time to call your debt settlement expert.

The three major credit reporting services use a numerical range of between 300 to 800. According to John UYlzhelmer, president of consumer education at Credit.com, “A 700 used to be enough to nab the best rates, but now a consumer needs a FICO score of 750.” When the consumer decides to use a debt settlement company one of the issue discussed how this will affect the consumer’s credit score.  In the past, the higher your FICO (credit score) score the better risk you are to lenders.  This score has meant you might be able to get lower interest rates either on your secured or unsecured borrowings. 

Debt settlement is an alternative method of getting the consumer out of their unsecured debt burden.  It is a program what is intended for those consumers facing undue financial hardship caused by the loss of a job, death of a spouse or medical emergency. The debt settlement option which is available to consumers is sometimes considered the last resource before filing bankruptcy. 

However, if the consumer is seeking out a debt settlement program their FICO score’s have already dropped. The drop in score has been caused by late payment, over limit or high balances. In fact, paying off a card and keeping it inactive will not necessary hurt your credit score nor will it help your credit score.  Recent news articles have indicated that lenders are closing or reducing credit limits on inactive or low usage credit cards.  This is also having a negative affect on the consumer’s credit score. 

Whether you use a debt settlement program or you try on your pay down your debt yourself. So either way the consumer’s credit score will be changed over time. The good news is as your debts are negotiated your credit score will begin to improve again.

As a consumer, do you feel like the title of the 1961 Broadway play, “Stop The World – I Want to Get Off.” The consumer is not sure where to turn or how to get off the treadmill which is causing emotional and financial stress to them and their family. This is how many consumers are feeling with their mounting debt based upon financial hardship.

One of the alternatives to this situation is to consider a debt settlement company. The consumer is wondering how these companies know of their financial situation.  Basically, these companies have established credit parameters with the various credit companies and receiving list of names and addresses such as, debt over $10,000 or high balances whether you are current or not on your payments.

The consumer should ask the debt settlement company the following:

·         What are your proven strategies?

·         What is your success rate?

·         Are you listed with the Better Business Bureau?

·         How long have you been in business?

The consumer should be aware that if they try to negotiate with a lender on their own. The lender in some cases will not talk to the consumer unless they are already 60 to 90 days delinquent.  If you are already delinquent this is going to hurt your credit score and can not be blamed on a debt settlement company.

One of the key’s in using a debt settlement company is establishing:

• The consumer has some ability to pay a set amount each month
• That the debt settlement program is sound
• That a debt settlement is better than a charge off on their credit report
• The consumer needs to be upfront with the debt settlement company about their financial situation
• The consumer needs to stay in involved in the process.
• The consumer needs to document all contact with the settlement company and have a clear understanding of the program.

The consumer needs to remember it is their responsible. There is no quick fix for solving the consumer’s debt issues.  However, there is a way out of this situation.  Contact our debt settlement expert today to discuss your options and get started on your pre-approval.

You receive an offer in the mail for a credit card.  You send in back and within weeks you have a credit card at your disposal.  It becomes the perfect recipe for a financial disaster.  It seems as though many people are living beyond their means.  While convenience is wonderful with regards to your credit card it also comes with a price.

Even fast food retailers know that consumers will be more likely to spend more on plastic than with cash.  Needless to say, they are racing to make it easy that every outlet is now card friendly.  The last thing you would want to do is purchase that hamburger on a credit card.  Especially, if you’re buying it on credit, paying it off slowly or worse, finding out that your credit card company has increased its interest rates.

You need to read those little booklets that often come in the mail.  Do not discard the material – if you have questions call your credit card company.

Finally, if you find yourself in doubt – pay the minimum payment on time.  Big payments do not impress lenders: timely payments do.  For example – if you make a late payment your lender may waive the late fee however your other credit card company’s can raise the interest rate even if you made no late payments to them.  How can they do this?  It’s called “universal default”.  The basics of universal default are simple – if you’re more than 30 days late on a payment to anyone the interest rate on any card with a universal default clause can increase your interest rate.

With that being said – don’t take anything for granted.  read the small print and if you have any questions – give your card carrier a call.  Be proactive not reactive to the situation at hand.

A historical look at a debt settlement program is nothing new for the consumer or for the lenders in regard to unsecured debt.  Some type of settlement practice has been in place for over 100 years.  The plan may not have been called debt settlement it might have been know as debt relief or debt forgiveness depending on the amount of the settlement.

The only form of relief for a consumer was bankruptcy, debt counseling or debt consolidation. Debt settlement was a little known way for consumer’s to find a way out from unsecured credit card debt. 

If you call your credit card company to work out a deal, they typical will work out a payment plan for the whole outstanding balance.  Therefore, the consumer is not gaining any ground is trying to get out of debt. Plus the consumer might simply walk away from the debt altogether, by filing bankruptcy then the credit card companies received almost nothing on the outstanding debt.  This hurts the financial bottom line of the credit card companies.  Therefore, they are more willing to work with a debt settlement company and receive at least 50% or less on the outstanding debt than maybe nothing at all from the consumer. 

The phrase, “a bird in hand is better than nothing” can apply to why credit card companies are willing to negotiate with a debt settlement company. It’s a process which requires discipline by the consumer, but it is a better way to handle your outstanding debts, without having to file bankruptcy or doing nothing about your debt. 

One question that every consumer asks is, why would a credit card company, be willing to work with a debt settlement company instead of with me the consumer directly?  The answer to that question is simply. The debt settlement company has a better understanding of the consumer laws and has experience dealing with the credit card companies.

So take at first step and talk to an experienced debt settlement representative today!

The more you understand your credit, the better you will be able to navigate the tricky field of mortgages.  It is important that you understand your credit as well as your credit scores.  There is more than one type of mortgage.  Your credit score will dictate what programs you will be eligible for.  Typically the higher your fico score is, the better interest rate you will get.

Different Types of Mortgage Programs For First Time Home Buyers.

• Locking the best mortgage interest rate
• First Time Home Buyer Programs
• Down Payment Assistance or DPA
• HomePath Mortgage Program
• FHA loans, great for first time home buyers and buyers with low credit scores

Most Consumers Want to Know the Following about Credit Scores

• How to improve your fico score
• What factors impact your credit score
• How to recover from bankruptcy or foreclosure
• Credit Restoration

For more information about credit scores talk to your mortgage professional.

American Express is paying some of its members $300 to close their accounts.  Amex has been know to cater to wealthy clients expanded their base to people outside of this sphere.  The plan has backfired and they are losing millions.  American Express is looking to manage credit risk based on customers credit scores and credit profiles.  Accounts must be closed by the end of March.

Credit Card companies are cutting credit lines

Just like their competition Capital One, Chase, Discover and Citibank, American Express is selectively cutting credit limits to customers and not going after as many new clients.  Keep an eye on your mailbox, that credit card in your walled may be finding a new home in the garbage can.

Can you go to jail if you do not pay your credit card bill?  No, If you stop paying your credit cards, your life will become a lot more difficult.  The first thing that will happen is that your credit score will drop like a rock.  A few late payments can drop your fico score as much as 200 points.  Your credit card company is going to raise your interest rates and start tacking on late fees.

When Will Creditors Starting Calling Me If I Get Behind On My Bills? Continue Reading »

If you are considering transferring your credit card balance to a new low rate 0% APR card you may want to reconsider.  Transferring your balances often can hurt your credit score.  You may only want to do it maybe once a year.

Should I Leave My Old Credit Card Open If I Do A Balance Transfer? Continue Reading »

Having collection accounts on your credit report will impact your credit score dramatically.  It is not uncommon for unpaid collections to impact your credit score 100 points or more.

Will A Collection Agency Take Payments? Continue Reading »

What happens to my fico score if I cancel my credit card? canceling a credit card does not eliminate your responsibility to repay the debt. What it can potentially do is to lower your credit score. A percentage of your credit score is determined by your credit history. When you cancel a credit card, your credit history goes with it. Canceling a bunch of credit cards and moving the debt to another credit card will hurt your credit score in most cases. Continue Reading »