Bad Credit Loan Articles and Blog Posts

Submitted by Alice Bryant  on Thu, 09/11/2014 - 12:12
People spend most of their daily lives in the pursuit of money, thinking about money or spending money. It's tied into a sense of self-worth and happiness for most people, so when there's a problem with money, it can impact their emotions negatively. 
While everyone has money problems at one time or another, the majority of people in debt find themselves under huge pressure. Serious debt is a big problem, and some people don’t learn how to manage it until it’s too late. Recognizing these emotional signs of debt can help you acknowledge the problem so you can get back on the right track to financial success.
Denial is the easiest way to deal with any problem. It's a coping mechanism that allows people to look past many problems, including debt. It can be too difficult to deal with the consequences of bad spending, so people rack up high credit card debt and use various ways to avoid paying their old debt. They'll borrow from one person to pay another and believe they have it under control. They may not look too closely at their expenses or may deliberately avoid facing their problem head on and dealing with it. 
Signs of Denial
  • Not having exact numbers of what's owed
  • Rationalizing the debt and purchases made while in debt
  • Paying the minimum on credit cards without having a budget
  • Not opening bills
  • Avoiding disclosing purchases to friends or family
A person in denial has to learn how much debt they actually have. Before they can hope to dig out of the hole of debt, they have to know how deep the hole actually is. A listing of the bills and amounts is the first step to confronting the debt. This will involve dismissing the habits of denying the amount of debt and that there is a problem. 
Anxiety and Fear
As a person in serious debt tries to confront their debt, they might experience anxiety and fear. They'll see the problem without the shroud of denial. It can be a daunting and scary task to confront the debt. They fear that the debt is too heavy, and there won't be a way out of it. This can cause them to move back into the stage of denial.
Signs of Anxiety and Fear
  • A feeling of hopelessness and the desire to shove more unopened bills out of sight
  • The inability to dig deeper into the level of debt
  • Unwillingness to call creditors with repayment plans
The level of debt can be overwhelming when it's been ignored for so long. Most people have no idea where to start, and they'll want to go back to denying the debt exists. It's hard to confront failings, but there are ways to make things feel more manageable by creating a budget based on a realistic accounting of what's owed. A budget is the first step. Canceling credit cards is another step in the road to financial and emotional recovery. If buying excessively brought about the debt, selling most of those extra things can help pay off some debt too. 
Stress and Anger
Once a budget is in place, the stress of sticking to that budget and finding ways to make repayments can be extremely stressful. Many people don't want to face the fact that they created this situation themselves, and want to find another to blame. 
  • The urge to throw up their hands and go back to what's easier
  • Each bill adds another bit of stress to their lives
  • They start to take out the stress and frustration on others
It's hard to analyze the anger while still in the middle of it. Anyone angry about bills and money should take a moment to think about why it's been a problem in the past. It's important that anyone who is that angry not to take it out physically or emotionally on those around them. It's stressful for anyone associated with the person in debt, especially family members. 
When living in a state of negativity for a length of time, the weight of it can cause depression. Money worries are depressing for many people. There's a feeling of hopelessness like the debt will never be lifted, and it will last forever, and while that may be an exaggeration, it feels very real to the person impacted by debt. The thought of bad credit for the rest of their lives can bring about depression too. 
  • The person withdraws from their friends and family
  • They turn to drugs or alcohol to numb the pain
  • They sleep more than normal
  • It's hard for them to drag themselves out of bed
  • The person doesn't care about things they once loved
Depression treatment for debt is the same for any other reason for depression, and the person may need to seek professional help. They should see their doctor to discuss the depression and talk about solutions. If a family member sees a person who is depressed, they should intervene and discuss seeking medical help. It can help to set small goals and stay positive in the face of debt. 
The fifth emotion is relief. After all the stress, depression and struggle, there comes a point when there's a light at the end of the debt tunnel. It could come when the person feels like they have a proper plan in place, or when they are almost free of their debt. They have happier and healthier interactions with family and friends. There's no more denial of the debt because the debt is close to being repaid. They have a proper plan in place, but they also have the tools to keep themselves out of further debt.
Submitted by Alice Bryant  on Fri, 08/22/2014 - 09:55
There are several websites touting the easiest ways to get rich as gambling and playing the lottery-- but how much would you have to spend on these highly addictive behaviors to earn what might be only a little money? And perhaps develop a gambling addiction. 
See the easiest way to immediately get richer is to save, save, save on literally everything you spend money on. 
In truth, the easiest ways to get rich, or richer, are right under your fingertips-- just take them OFF your cash and try to do one or all of the following. 
1. Save Your Money.
Get a savings account--not just a checking account--one that will earn some interest and start saving for your future TODAY. Tomorrow comes much quicker than you think. Figure out the minimum amount you need to live every month, add perhaps $50 to $100 dollars to that and live off of this and this only. Try this for six months. Then you will be motivated to save even more. 
Look into a bank that will give you maximum interest and look for any monthly fees that will take it right back away from you first. Then start saving. 
2. Pick up a second job.
Pick up a second job you can do from home, perhaps. Look into crowd sourcing. You only have to do this four hours a day several days a week and it pays well. There are all types of crowdsourcing sites hiring now. You can make as much as $15.00 an hour and set your own hours. Perhaps come home from work., log in some hours, rest, and work some more!
Or, pick another job that is not heavy work. Most library clerk jobs are just sitting at a desk, for example checking out books. You could rest up from your first job and work at the same time! Think of a job like this that is low effort for at least minimum wage. You can put that extra money directly into your savings account and watch it add up. 
3. Renting Out/Selling Belongings.
Consider how much money you could make renting out that extra bedroom to the elderly or perhaps someone single--A basement could work really well as well. You could actually set up your basement in such a way that you and the renter could rarely see each other. 
Renting out room can your rent/mortgage and you could save more of your money. 
That could pay your rent Do you have a pressure washer or other large tools that are just taking up space out in your garage? Those rent out for big bucks! 
On that note, round up old belongings -- old tape recorders/players, old VCRs old Walkmans and have a garage sale or sell them on EBay. Look at the best ads and model yours after theirs. It's surprising what people will pay just to have these items to use for parts!
4.Cut back on expenses.
There are all kinds of ways to cut back on expenses, especially those for all those luxury items you could be just as happy without. 
Do you really need all of those cable channels? Cut back wherever you can and watch your savings grow. Learn to embrace free hobbies instead of wasting away in front of the TV. Start reading more, creating more. You'll be happier and richer too. Make your own instant cappuccinos or buy a reasonable cappuccino maker--that four dollars you're spending on fancy coffee every day could be going in your savings account. 
If you're renting or leasing a car, consider turning it in now and either purchasing a good, reasonable used car or even cheaper means of transport, such as carpooling, riding your bike, taking public transport, and walking places in easy distance. 
5. Spend a little now to save great money over time.
All the following ways can save you money in the long run even if they cost a little now. 
Buy yourself some CFE light bulbs. These new, highly energy-efficient lightbulbs never need replacing and save you some $.66 per bulb per month. Add that up for all the bulbs in your house and you're saving some $20 dollars a month, maybe more for a very large house. 
Get a Programmable Timer for Your Thermostat. Put your heat and air on a programmable timer--these timers can be adjusted when you are not at home to keep your heat and air from wasting while you're gone or simply turn them off or down when you'll be gone from several hours to several days. You will have to modify this slightly if you have pets. 
Air seal your home. This is an important task as you can waste a lot of money trying to heat rooms where cold air is seeping in or, in the summer, where your cool air is seeping out. If you get your home air sealed you can immediately see savings on your electric bill. 
Grow your own vegetables. All it takes are seeds and water and you could be growing those vegetables you pay dearly for at the grocery store every week. Vegetables, such as onions, lettuce, tomatoes, squash, and spices are very easy to grow while the grocery can charge you $1.00 or more for one onion. You can save as much as $40 dollars a week this way. 
In short, the easiest ways to get rich are by saving the money you are already earning and refusing to waste those hard-worked-for dollars on a myriad of unnecessary expenses every month. With perseverance over time, you can experience great rewards. Like gambling, saving money is addictive. The more you save, the more you will want to save, and this domino effect is one that is health as well, for you, your family, and your future. Save now so you can live well later, in your golden years. You must do it. 
Submitted by Alice Bryant  on Fri, 08/08/2014 - 15:00
Education is one of the primary ways to increase your lifetime earning potential exponentially. Based on 2000 Census Data, a bachelor's degree increased lifetime income by $1 million, while a master's degree increased lifetime earnings by $2.5 million. Thus school remains a great way to transform your life.
But what if you have bad credit? Here is how to pay for education with bad credit.

Just Out of High School

High school graduates have become adults with the opportunity to either start working immediately or continue studies at a higher level. In order to fund their education, students usually have four (4) primary sources: 1) Themselves, 2) Family, 3) Private or 4) Government. If a student has athletic or academic talent or is a member of a special group, like the Sons of the Revolution, then he or she could qualify for special scholarships and grants. These scholarships and grants do not need to be repaid.
Loans must be repaid. In years gone by, a student would need to depend on himself or herself to find the necessary money for college or university. Some students worked a part-time job or entered work-study programs to help them pay for books, room and board and tuition. This can be a very solid option because it helps build up good job skills while paying off debt gradually. 

Government Loan Programs

The United States government realizes that well-educated citizens are a valuable asset to the nation as a whole. There are many government scholarship, grant and loan programs available for students to improve themselves. It is usually free to apply.
Interested students can go online and look for a website offering the Free Application for Federal Student Aid (FAFSA). They can fill it out online or print out a paper copy. This will ask the student about his or her personal finances, credit score, family resources and university of choice. Some of the loans do not have required credit checks, they are "Needs-Based."
The Stafford or Perkins programs are the primary loans for students. There are many different terms and conditions for these loans with variable or fixed interest rates. The PLUS loan is a government program for parents. The wisest education funding plan usually involves a combination of programs.

Plan for Paying with Bad Credit

Students with bad credit also have a number of options for paying for their education. The federally-funded, needs-based student aid programs may not run credit checks. Private loans may have higher interest rates, but still be available. Finding a co-signer can also help. The final option is to clean up your credit.
Many modern financing packages have early repayment penalties meaning that the banks want you to continue in debt as long as possible. There is usually a six-month grace period after graduation before you must start making payments on your student loan. This can help you keep up with the repayment schedule.
Credit repair will increase the number of loans available and allow for better terms and conditions. Better credit can lead to longer repayment schedules for loans. People with poor credit can concentrate on ensuring that they make more payments on time. They can talk with their banks about options for increasing their scores. Students with bad credit can still fund their education, it just might be a little more difficult.
Submitted by Alice Bryant  on Fri, 08/01/2014 - 08:39
Despite all the warnings we get about credit cards and ways to not let them take over our lives, millions of people still use them on a daily basis. An almost equal number of people find themselves way over their heads in debt. While some don’t know where to turn, others turn to consolidation loans. The big question seems to be if consolidation loans are actually helping or if they can hurt credit. Learn some startling facts below. 

What is Debt Consolidation?

Debt consolidation, also known as debt relief, is what its name implies. It’s when an individual combines or consolidates all his or her debts into one big loan of some type. Debts can be consolidated in several ways. The borrower can use a consumer loan, a debt consolidation loan, a home equity loan or a low-interest balance transfer credit card. 
However, the credit card is usually the last and must undesirable option, especially if credit cards debts are the reason behind the consolidation loan. Debt relief loans are popular because they typically charge a much lower interest rate than credit cards, and they allow borrowers to make one monthly payment as opposed to several payments. Let’s look at an example of how a debt consolidation loan might work. 
Mr. Brown makes payments on six different credit cards each month. With a balance of $2,000 on each card and each one requiring payments of $75 per month, Mr. Brown is paying out $450 each month in his attempt to pay off his $1,2000 credit card debt. Mr. Brown goes to his local bank and takes out a consolidation loan for five years at ten percent interest. His new monthly is $254, which is substantially lower than the $450 he was paying. While the consolidation loan helped his immediate financial situation, how did it affect his credit? 

Credit Scores vs. Credit Rating

Before one can understand how credit is affected, it’s important to understand what actually goes into a credit report. Many consumers think that credit scores and credit rating are the same, but they’re actually two different things. A consumer’s credit score is the number used by lenders and credit card companies to determine the creditworthiness of a consumer. 
Credit scores are determined by the following five factors, and each factor carries a certain weight towards making up the total score. 
Payment history – 35%
The amount the consumer owes – 30%
Length of credit history – 15%
New credit – 10%
Type of credit – 10%
Credit rating is determined by the lender or a professional who’s trained to look beyond the consumer’s score and determine how creditworthy the individual may be. The rating may be determined by several factors. 
•Job stability
•Ability to use dormant credit scores
When a consumer applies for credit, the lender looks at the credit scores as well as the credit rating. Even though the credit scores may be low, the credit rating may determine that the low scores were from the past, and the consumer’s current rating look positive towards his her ability to repay a loan. However, it can also go the other way and not in the consumer’s favor. 

How Consolidating Debts Can Affect Credit

How debt consolidation affects your credit is dependent on several factors. When a consumer applies for a credit card or a loan, the lender is going to look into the consumer’s credit report. This is referred to as a "hard inquiry", and hard inquiries can cause a credit score to drop. This can be particularly harmful if a consumer goes to several lenders to see which one offers the best deal because this may result in several "hard inquiries". 
Lenders like to see a long credit history, and if the consumer makes all his or her payments on time, this is going to be reflected in a good credit score. On the other hand, credit scores are also determined by how a consumer utilizes his or her credit. This is referred to as a consumer’s utilization ratio. The amount of credit that’s available is compared to the amount of debt the consumer has. In the case of Mr. Brown, let’s say he opened up an additional credit card. 
Because he now has more credit available, his credit score may go up a bit. However, if a consumer opens up a new credit card and pays off all the other credit cards by putting them on the new credit card, the credit score is probably going to take a hit because there will be a high balance on one account. 

Can a Debt Consolidation Loan Hurt Credit?

Consumers who take out consolidation loans to pay off credit cards are improving their utilization ratio because they have increased their amount of available credit. This in turn will typically increase the credit score. However, this will only work if the consumer keeps the credit cards open even after paying them off. 
The reason for this is because the consumer now has more available credit. Unfortunately, consumers who take out consolidation loans are generally doing so to get rid of credit cards and don’t often wish to keep them open. However, when a consumer takes out a consolidation loan to pay off credit cards and leaves the credit cards open, the ole credit rating vs credit scores scenario comes into play. 
While keeping the credit cards open may improve the individual’s credit scores, a lender may not look favorably on this because the credit cards are there to use once again. Because it can affect the consumer’s ability to pay debts in the future, the credit rating may go down. It's very easy to see that the credit rating and credit scores can almost act as a seesaw. One goes down and the can go up. 

Make Debt Consolidation Loans Work for You

Despite the negative affect debt consolidation loans can have on a person’ credit scores, they can also be a lifesaver to the consumer that’s deeply in debt. The key is to make sure the consolidation debt pays off the credit cards or other debts and that they stay paid. 
Submitted by Alice Bryant  on Fri, 07/25/2014 - 08:01
Whether it's a major car repair, a house fire or a sudden loss of income, emergencies can put an enormous strain on your finances. If you go into debt to tackle the situation, you could be digging out of it for years to come, and heaven help you if you have two emergencies back-to-back. However, there are a lot of strategies you can employ to avoid going into debt when disaster strikes.

Ask for Help from Your Support Network

Your parents and family members may be able to help you, if you have a plan for paying them back in a timely manner. Figure out a plan for repayment before you approach family for a loan and you are more likely to be successful. You can also use social networks and crowd-funding sites to raise funds, as well. Look into sites like GoFundMe for a way to solicit help from those you know who may be able to help you out.

Find a Better Price for Your Emergency

If it's a car repair, have you called around and put out feelers for a cheaper quote? If you need emergency home repairs, call several contractors for quotes. Sometimes, the urge to deal with the problem is so strong that you may not look for less-expensive solutions. Everything from veterinary bills to towing charges can be negotiated, so don't be afraid to haggle.

Sell Items for Cash

For those who have the option, selling some of your possessions for cash makes a lot more sense than going into debt. Gather up your old MP3 players, video game devices, e-reader and other electronics and sell them online through a site like eBay or CraigsList. If you have an extra car, quad, motorcycle or moped, sell it. Unless you are desperate, avoid pawn shops as you will not get fair value for your items.

Rent Out Your Belongings

If selling certain items is impractical, consider renting them out. That extra bedroom could be rented out to a college kid or a spinster for hundreds of dollars a month. Your lawn tools, power tools and recreational vehicles can also be rented out. Research your options carefully and make sure you are properly insured before taking this route, but definitely consider it.

Cut Back on Your Expenses

Sit down with your monthly budget and try to trim the amount you need off of your spending. For example, dropping your cable, cellphone and Internet service to the very cheapest package for a month or two may give you all the cash you need. If you aren't tied into contracts, canceling services all together will save you even more. Also look for ways to trim your food budget, cut down on transportation expenses like gas and think about ways to get more for less in every aspect of your life. It is better to live very lean for a month or two to cover the emergency than deal with debt repayments.

Pick Up Side Work

If your budget simply won't stretch any farther, you can always make more money. With job markets being tight, you may not be able to find much more than retail work on a part-time basis. However, every bit helps. If you have skills with writing, drawing, coding websites or making crafts, the Internet allows anyone to make extra cash with sites such as Etsy, DeviantArt, TextBroker and Odesk. Picking up some extra work on the side can go a long way towards getting you out of financial hardship and back on the road to a secure future.
There are many ways to get out of a financial emergency without a ton of debt. By following these tips, you can find, make or borrow the money you need without being stuck paying it back for the next few years. The money you save in interest can be set aside in an emergency fund so that you will be even better prepared when the next emergency arises.
Submitted by Alice Bryant  on Fri, 07/18/2014 - 06:10
Having bad credit can negatively impact nearly every aspect of your life. You can't borrow money for the things you want or need, and when you can, you're paying a much higher price than your neighbor with the good credit score. A few mistakes in your early adult life can stick with you for a long time.
Three major credit bureaus -- Experian, Equifax and TransUnion -- are the companies that seal your fate. Using data regarding the amount of credit and debt you have and how quickly you pay that credit back, the companies give you a score telling lenders how likely you are to repay your debts on time. If the data shows that you use up almost all of the credit you have available and that you are late making payments, you'll have a bad credit score. Lenders will take note and act accordingly.

Borrowing Money

Perhaps the most frustrating part about having bad credit is that lenders just aren't interested in working with you. If your car dies and you want a new one, you're out of luck. You can't get a credit card to fall back on for little emergencies. Forget about getting a mortgage, even though the monthly payment on a home in your area would be less than your current rent. A lender who views you as a credit risk will simply turn down your application, even if you can prove that you have the ability to repay the loan.

Paying More

When you do find a company willing to give you a loan, it's going to be at a higher interest rate than what you'd pay with good credit. At first, it may just seem like a relief to be able to borrow the money you need, but then you realize that it's harder to pay this money back. With each monthly payment you make, a portion goes toward the principle and another portion goes toward the interest. When the interest rate is high, more of your monthly payment is going to pay that interest. If you're only able to pay the minimum payment, it's going to take longer for you to pay back than it would if you had a lower interest rate. You can help the situation out by paying more than the minimum; any extra money you spend will pay down the principal balance.
Additionally, you'll pay much more for the loan over the long term. For example, if you were to take out a 30-year $150,000 mortgage at 6 percent interest, you'd end up paying more than $173,000 in interest over the lifetime of the loan. With a better credit score, you might be able to secure a 30-year mortgage at 4.5 percent interest. The total interest paid on that loan is just over $123,000. That's a $50,000 difference!

Getting Housing

You have to live somewhere and when banks won't offer you a mortgage, you need to look into your rental options. Unfortunately, most landlords consider your credit report when making a decision about lending to you. In a hot rental market, you may find it extremely difficult to find a landlord willing to rent to you. To make a landlord feel more comfortable, you may have to pay several months of rent upfront, or have a family member willing to co-sign for you. This can be a big expense that you might not have been expecting.

Setting Up House

The additional expenses don't stop once you've found a place to rent. You'll also have to set up your utilities, like gas and electric, water, sewage and Internet. If you're lucky, some of these expenses will be included in your rent, but they are all possible extra expenses. These companies will also check your credit report when you sign up for an account, and with a bad credit score, you'll have to pay a deposit before the company will start providing services. Those with good credit do not incur these extra costs.

Getting a Job

Some employers will request a credit report before hiring you and a bad score might mean that you won't get the job. They'll worry that the irresponsibility you show in your financial life might be something that carries over to your professional life. If the position includes handling money, an employer might worry that you're more likely to steal from the company to take care of your finances. When all other aspects are equal, an employer is more likely to choose the candidate with a good credit score over the one with a bad credit score.

Digging Yourself Out

The good news is that you're not doomed to a lifetime of bad credit. Once you recognize where you stand, you can start taking steps to improve the situation. Initially, you might have to start with a secured credit card, or a loan with a higher interest rate than you'd prefer. However, simply making on-time payments will be enough to make your credit score increase over time. As long as you're using your credit responsibly -- keeping the balance low and making your payments on time -- you'll improve your score. Resist temptations to overspend and set up automatic payments if you're the type of person who might forget to make a payment.
Additionally, information on your credit report drops off after seven years. So while you'll see big improvements after just a year of using your credit wisely, once the seven years has passed, lenders will never know that you once had bad credit.
Submitted by Alice Bryant  on Fri, 07/11/2014 - 09:36
Establishing a good credit score is absolutely crucial in today's world. Maintaining a good credit score is of equal importance. Therefore, being aware of your credit score and of ways to improve it, regardless of how high or low it is, will help you both presently and in the future.

How to Determine Your Credit Score

If you know you have bad credit or if you aren't sure if you have any credit at all, individuals are permitted to one free credit report from the three main credit reporting agencies. It is the law. These reports are available online, and by using these three main credit reporting agencies, you can become aware of your score and aware of any potential identity thefts. In order to obtain your free score, access

What Negatively Impacts Your Credit Score

Not Having Any Credit Established
This fact is a Catch-22 that can be avoided if you start establishing a good credit score early in life. Having no credit is almost as bad as having bad credit because it makes establishing or rebuilding credit very difficult. If you do not have any lines of credit open, banks and lenders will be less likely to lend to you because they have little proof – aside from your bank statements – that you will be a good risk.
Making Low Payments or No Payments
If you have a line or two of credit established, and you do not make above the minimum payments per month, your credit score will drop and interest will accrue. There is little worse in the world of credit than paying your line off late – or not paying it at all, and not paying it has steep consequences, including but not limited to late-charges, a decreased credit score, and even jail time.
Having Too Many Lines of Low-Paid or Non-Paid Credit
It is bad enough having a credit card that you can barely make the minimum payments on. Now, compound that negativity by three more credit cards. The more lines of credit you have established that you are not paying off, the lower your score will be. Consider keeping your lines of credit to two or lower, not including loan repayments. This will help you establish a higher score.
A Lack of Variation
If your only form of credit is in the form of a credit card, you will not be able to increase your credit score as quickly or effectively as you would if you had other forms of credit established. Other forms of credit such as loan repayments are a great way of avoiding a low score.

How to Increase Credit If Your Current Score is Low

Open a Line of Credit
This tip might seem obvious, but to many, it is not. If your credit is bad or non-existent, the quickest way to repair it is by establishing credit. Open up a secured line of credit, meaning your credit line will be up to whatever you have in your bank, or open a line of credit with a co-signer. Although this way takes some time, it will slowly increase your credit.
Diversify Your Credit Options
If you have the ability to, apply for a small loan. That loan can be for a vehicle, which is one of the easiest loans to acquire in the current economy, or it can be for personal use. Either way, make sure the fixed interest rate is low and that you will be able to make the payments each month.
Make Above-Minimum Payments
When making payments, remember that each payment has interest included into the sum. In other words, making the minimum payment will not actually allow you to pay off the balance in a timely manner. Therefore, make a payment each month but increase that payment to anywhere from $10 to $100 more than the minimum.
Make a Purchase on Your Plastic Credit at Least Once a Month
In order to increase your line of credit, you need to use that line of credit. Therefore, make a purchase each month or a few times each cycle and pay it off by the end of the cycle.

How to Maintain Credit

The best way to maintain your credit score is by keeping a constant watch on your credit score. Be sure to check it at least once a year. Also, be sure that all of your payments are continually up to date. Never assume that just because you've made the payments, however, that everything is up to date and current. You need to call your credit companies and check your score online regularly. While you should never panic about your credit score, you should always remain proactive about it.
You need credit in order to make purchases such as a home or a vehicle. You also need credit to qualify for student loans or any type of loan for that matter. Your bad credit is not something that is going to repair itself overnight. You need to take charge of your credit the way you take charge of your life. Your credit score can and will continue to decrease if you are not proactive, so start today. By following the aforementioned tips, you will have a better credit score and an easier time getting through your daily routine before you know it.
Submitted by Alice Bryant  on Thu, 07/03/2014 - 09:46
An individual's credit score is quite possibly the most important number that can be associated with his or her financial records. It is important to keep strict records of what this number is and it is also crucial to understand what makes a credit score good or bad. Fortunately, there are many companies that provide consumers with a free credit score at least once each year. Locating these companies, and making sure they are reputable, is a task that can be daunting. The purpose of this article is to help individuals determine what a credit score is and encourage them to be able to make the smart financial decision of requesting a free credit report with ease.

Credit Score Basics

A credit score is basically the number that determines how responsible a person is in paying off the creditors who provided various loans. The FICO credit score is the standard score in the United States, with this number being the most common one that lenders look at before determining whether or not to lend out money. The numbers for this type of score can range between 300-850, with the higher number being the better score. There are three credit reporting agencies that use FICO credit scores as their baseline. Equifax, Experian, and Transunion all strive to provide the clearest picture of an individual's credit score possible. 

Consequences of Bad Credit

Having a bad credit score can affect a person's financial future in many different ways. First, it can have a detrimental effect on the interest rates paid for loans. Car loans, home loans, and student loans all come with a certain percentage of interest that the lender agrees to pay. If the borrower's credit score is poor, it is likely that lenders will charge a higher interest rate as insurance. In the case of a really low credit score, individuals might be prohibited from getting a loan in the first place. A bad score could also deter landlords from renting an apartment, townhouse, or single family home. Landlords need to be sure that they are renting to trustworthy, responsible individuals and if the credit score says that an individual doesn't pay his or her bills on time, it is unlikely they will take that risk.

Why it’s Important to Check Scores

One of the reasons that it is so important for individuals to check their credit score regularly is that it does have the potential to improve if financial habits change. Paying bills on time is the primary way to improve a credit score's number. Similarly, credit scores can go down if bills aren't paid on time. Simply missing one loan payment can have a detrimental effect on a person's overall credit picture. In addition, keeping record of an up to date credit score is one of the primary methods to discover if an individual has been the victim of identity theft. Identity theft occurs when a criminal obtains an individual's financial information and uses that to purchase items without paying for them. In severe cases, thieves can sign up for loans or credit cards under a victim's name, which would make them accountable for the thief’s purchases. Someone taking out credit cards or loans in a victim's name is a scary thought, and keeping a current credit score record will ensure that the thief isn't able to harm a person's finances for an extended period of time without his or her knowledge.

How to Check Credit Scores (For Free!)

Finally, it is important to know the avenues which allow an individual to check his or her credit score for free. Once the Fair Credit Reporting act was passed into law it required credit bureaus to provide individuals with their credit score for free at least once every twelve months. It is important for interested individuals to look for sites that provide an authentic FICO credit score as opposed to another type of score. The FICO score is the only authentic, comprehensive score that lenders look at when determining a financial picture. Fair Isaac, the originator of the FICO score provides this service as do Experian, Transunion, and Equifax. By choosing a credit reporting organization affiliated with these credit bureaus individuals can ensure the accuracy of their report. One of the websites affiliated with Experian, Transunion, and Equifax is By visiting this website individuals will be walked through the simple process of applying for their yearly credit report and will receive results in a timely matter. Once an individual has obtained the score, he or she can make a financial plan to either maintain good credit or improve poor credit. If it is discovered that an individual has been the victim of identity theft, it is crucial that he or she contact one of the three credit bureaus immediately to put a fraud alert on his or her credit report.
In conclusion, it is essential for individuals to obtain a free credit score reporting every twelve months to ensure their financial health. Due to the fact that the Fair Credit Reporting Act mandated free reports each year, the Credit Bureau agencies must comply and provide free reports to those who are interested. Credit reports can help individuals estimate monthly payments, improve their financial health, and keep track of crimes such as identity theft. To be able to do these things for free each year seems too good to be true, but the federal government has provided a way for it to happen. Take advantage of free credit reporting today.
Submitted by Alice Bryant  on Fri, 06/13/2014 - 10:41
For most people, death is regarded as the end of all mortal cares and worries. Immortality is defined by having children and family who remember the deceased after they are gone. However, debts incurred in life can haunt the deceased's survivors long after the final services are conducted. Understanding the legal boundaries and what debts are and are not collectible after death can help facilitate estate planning and ensure estate assets are divided according to one's will, rather than to satisfy debts. In this article, the questions of what is and is not generally collectible after death, who is responsible for what, and what legal remedies are available to creditors and survivors will be addressed.

Credit Cards and Death

Credit card debt enjoys a dichotomous position in estate planning. Many people use credit cards to finance end-of-life expenses such as final medical bills, disposal of remains and funeral services. This only adds to any debts accrued during the life of the cardholder, leading to a high potential for collections activity after death.
If a cardholder opens a line of credit without their partner's knowledge and dies before the balance is satisfied, the spouse is typically under no direct obligation to pay, as this is considered an estate expense rather than a personal obligation. If an estate enters probate, credit cards are usually among the last debts to be considered. Medical and legal expenses, taxes and mortgages are given precedence. Similarly, an authorized user who does not use the card in question after the death of the primary account holder is not normally held liable for any debts incurred. For this to be the case, the card must not be used after the primary holder's death or if the authorized user knows the estate lacks sufficient liquidity to cover any expenditures made on the card. In either of these cases, there is a high probability of criminal and civil action against the user if the card is used. In community property states, this may not apply as debts incurred after the marriage are considered community property even if one spouse entered a credit card agreement without the knowledge of the other.
Joint cardholders may find themselves stuck with a large bill after the demise of their partner, however. This is because joint accounts are considered communal assets and the demise of either party to the account does not relieve the surviving partner of obligation to pay. This may also serve as an exception to the 
The best way to ensure collection activity is not engaged against the heirs to an estate at death is to cut up the credit cards and send them to the issuing companies along with a declaration of death of the account holder, as well as contacting the major credit bureaus. The companies then have the option to contact the executor of the estate to seek payment, but under the Fair Debt Collection Practices Act or FDCPA, once the companies have been given the name of the executor, they are no longer permitted by law to contact the heirs directly to seek payment. One should also check with the companies at the time of the primary account holder's death to find out if the account was insured, as credit insurance pays off the debt in the event of the holder's demise.

Other Assets

Life insurance is a key step in estate planning. Many people worry that creditors may come after their heirs' policies after their death. Because life insurance benefits are paid directly to the heirs instead of to the estate, life insurance policies are typically not considered to be legitimate avenues for collection unless one of the heirs is assigned executor status. Even then, the estate must normally go to probate and all other avenues for payment of final debts must be exhausted before any insurance monies may even be considered. Local and state laws vary on how collections activity may affect heirs and executors, making it vitally important to contact an attorney to clarify estate and debt laws in a specific jurisdiction.
Estate finances and hard assets such as vehicles, houses, and so on are considered legitimate leverage to repay outstanding debts. Even so, there are a number of factors that must be taken into account, including liquid assets of the estate, salable items that can be used to pay off final debts and estate-level income streams such as royalties or annuitized payments. Most estate laws hold that any and all estate-level assets must be liquidated before any further action may be considered. Additionally, only the executor is typically considered a suitable point of contact for outstanding post-death debts unless someone else created a debt fraudulently. 

Protection From Post-Demise Debts

Credit card debt is often referred to as "unsecured" debt, meaning it is not leveraged by physical assets. A mortgage is leveraged by a house and an auto loan by the vehicle, but credit cards are leveraged solely by a user's apparent creditworthiness. Because of this, credit card debt is usually far down the list when estate resources are apportioned to satisfy end-of-life debts. 
Knowing this, some creditors will attempt to reach out to heirs or other family members to recoup their losses, suggesting the heirs may be subject to legal action if they do not satisfy the debts. This is generally not true under FDCPA and opens the creditor up to civil and possibly criminal action. In such events, the heirs and/or family members should contact an attorney at once to find out what their rights are by jurisdiction and under FDCPA and other federal laws.
By notifying the credit card companies posthaste upon the demise of a cardholder, it is possible to insulate oneself against possible legal action later as an heir. The estate itself may be vulnerable, but this will largely avoid any further collection activity companies can take against heirs, leaving all life insurance awards secure.


A considerable amount of care should be taken to avoid any action that may cause even the appearance of liability. Not using cards one has been issued for any reason, advising credit bureaus and issuing companies of the death of a cardholder in a timely fashion, and proper estate planning can all help prevent end-of-life debts from rolling over to the next generation. Meeting with a qualified financial planner and seeking legal counsel at the beginning of estate planning can help alleviate the needless strain of debts, allowing the survivors time to deal with their loss rather than the legal entanglements and obligations of debt.
Submitted by Alice Bryant  on Fri, 06/06/2014 - 10:07
There are many steps that can be taken to improve a credit rating, and this summer is a good time for consumers to begin the process of increasing their credit scores. Some of these steps take longer than others, and in some cases the help of professionals may be needed. Not everything mentioned below needs to be done, but the more steps taken by a consumer to improve their ratings, the better chance there is of success. 
The basic idea of repairing bad credit:
The first thing that is needed is a basic understanding of the factors that influence an individual’s score or rating. In order to improve this score or rating, it is only necessary to reverse the process. In other words, consumers need to understand why their rating is low and how to begin to reverse the process as well as any necessary steps to be taken. 
Factors that create a bad credit score:
There are certain elements of a bad rating, and all of them will center around negative marks on a consumer’s report. The major factors influencing a consumer’s score are: a bankruptcy, civil judgments and liens, late payments, account that are in collections, too much money owed and too many accounts with balances.
A bankruptcy can affect a rating for as long as 10 years. After this time, the bankruptcy will be dropped from the report. There is nothing that can be done to change this, and it will have a strong negative effect on anyone’s score; however, consumers can focus on other aspects of their report and increase their scores as much as possible even with the listing of a bankruptcy on their report. 
Liens - especially tax liens:
If money is owed and there is a lien on one or more assets, this can be a strong negative mark against an individual. The best approach to dealing with this issue is to satisfy the lien. If there is an asset that can be sold to satisfy the lien, then this may be the best course of action. Having a lien go away can help to greatly improve anyone’s ratings. 
Late payments:
This is a major issue that needs to be addressed in order to begin the process of repairing bad credit. It begins by making all payments for any debt on time with no exceptions. By making payments on time, a consumer will be building up a history of responsible debt payment. The reasons that payments have been delinquent in the past need to be identified so that changes can be made to assure that debt is paid on time. One problem that is easily corrected is the payment date. Sometimes the date does not correlate well with a person’s pay period, but a creditor can often change the date to better able the debtor to pay on time. People need to be aware that late payments may only be a minor factor when scoring a person’s payment history, but if there are enough accounts with late payments, this becomes a major red flag to lenders. 
An account is in collections:
Once a lender has reached a certain point where it is no longer worth their trouble to collect on a debt, they will write it off as a bad debts expense and turn the account over to a collection agency. Any account that is in collections will hurt a person’s rating, and the more accounts in collections, the worse score a person will have. 
Too much money owed:
Even if a person has no major marks on their report, having a total amount of debt that is high compared to their income can hurt their total credit score. Although each lender may have a slightly different formula for determining a consumer’s rating, what is known as income to debt ratio is very influential. The only way to address this is to start paying down debt. Because the number of assets a person has is not an issue, if individuals have anything of value that is no longer wanted or needed, this asset can be sold to pay down a portion of the debt. This will increase a consumer’s rating with any lender.
Ratio of balances to credit limits is too high:
This is critical. When a lender sees that a person’s accounts are almost to the maximums, there is a reluctance to approve more lending. Consumers should never push their accounts to the limits, but if it does happen, these high balances should pay them down as soon as possible. 
Too many accounts with balances:
Lenders do not like to see a lot of accounts that have money owed on them. The best way to handle a problem like this is to begin to pay off the smaller balances. This may not make a large difference in a person’s total debt, but with less accounts showing a balance, a lender will be happier and give higher ratings with applying for a loan. There is no reason to close the account; this works against the consumer. It is best to keep the account open, and the limit on an account with a zero balance will help to increase a consumer’s score. Another possibility is using a consolidated loan to pay off all of the balances of all or most of the open accounts. A consumer can then make a single payment to one lender. This also makes the process of paying bills on time easier with fewer lenders to remember to pay each month. 
Length of time accounts has been established is too short:
This is usually a minor factor, and there is nothing that can be done about it except keep making payments on time. It is too easy to have a recently opened account with a zero balance and a record of on-time payments for a couple of months. More weight is given to accounts that have existed for longer periods of time than those that are more recent. 
Getting professional help this summer:
There are professional credit repair services that can help remove bad marks on a consumer’s report; however, keep in mind that unless there is a mistake made, only the lender that made the negative mark can take it off. There are some good repair services that can work with certain creditors and know how to negotiate to have a negative mark removed. When negative marks are removed, score and ratings can go up substantially. 
This summer is a perfect time for every consumer to begin the process of repairing a bad credit score. Of course, the first step in the process begins by obtaining a copy of the reports from all three major reporting agencies and looking at them to determine exactly where a consumer stands. From this point, action can be taken on the part of an individual or with the help of a professional company. 
Last updated on Sep 15th 2:39 pm