Bad Credit Loan Articles and Blog Posts

Submitted by Alice Bryant  on Thu, 10/01/2015 - 13:29

Student loans are one of the fastest growing forms of debt in the United States today. With the rising cost of college, many people are having to take on tens of thousands of dollars in debt to pay for school. Although some students land jobs after graduation, there are also some that have issues finding employment where they make enough money to pay for their student loans. Many students are left with loan payments that are too big for them to bear the burden of over the long term. This results in many students missing loan payments or going into default on their loans. Many people do not realize just how detrimental it is to miss loan payments on their debt. There are several things that happen financially when a person misses a loan payment. Not only does the interest continue to grow on the loan, but a person's credit score is also impacted. A lower credit score will result in higher borrowing costs down the road. People with a lot of student loans or other debt should work to make payments on time every month. If they start to get behind, it can be very difficult in getting caught up again. Here are several things that happen when missing a payment on any loan.


Interest is the penalty that people pay for taking on debt. The higher the interest rate, the more that the interest will be as a percentage of the total payment. We are currently in an environment when interest rates on many forms of debt are at all time lows. However, when using a credit card or other forms of unsecured debt, there is a much higher interest rate to be paid. The financing company that provides the loan must be compensated for the risk that they take on. This risk can be measured in the interest rate that must be paid. When you miss a payment, the interest on the debt starts to build and is eventually added to the principal on the loan. This is why some people are simply never able to pull out of their financial hole from all of the debt that they take on. Whenever a person just pays the minimum payments, they are never paying down the principal on the debt. Interest building up over time is one of the biggest reasons that missing payments should be avoided at all costs.

Credit Score

The credit score is one of the most important metrics that anyone can have with their finances. There are many people with a high credit score, and this makes it much easier to borrow money at a lower rate. Low credit scores mean that it will be more expensive to borrow money in the future. The best way to increase a credit score is to borrow money and pay it off over time. Missing a payment on a loan is one of the worst things that can happen to a credit score. Many people make financial mistakes when they are young that ends up affecting their financial future. For example, many people end up renting longer than they would like because they cannot get qualified to purchase a home. Being responsible and paying off debt is the best way to help your financial future. The credit score should be treated with the importance that it has. Always be sure to pay loan payments on time in order to not hurt the credit score over time.

Credit Repair

There are many credit repair companies in the industry today that can help people that are struggling to make all of their payments. Many people have five or six credit cards that carry a balance. It can be difficult to manage all of the payments on these cards at one time. These credit repair companies can work with people in a way that will help them in both the short term and long term. In the short term, it is important to get all of their payments caught up. However, in the long term it is important to change the behaviors that led to the increase in debt in the first place. Many people make purchases on credit because they want something that day. A good practice is to save up money to buy something if the monthly payments cannot be made. Credit cards are not a bad thing and are a great way to build up credit. Likewise, student loans are the only way that many people can attend college to make a better life for their future. However, if the borrowing costs are not measured, many people end up owing money that they can never pay back.

Final Thoughts

Overall, there are many consequences to missing payments on loans that are taken out. Two of the most common types of debt in the United States today are credit cards and student loans. Credit cards have high interest rates which can build up quickly if they are not paid off. Many people think they can get away with missing just one or two payments on their loans. However, this will impact the credit score of the borrower and will lead to higher costs down the line. Whenever a loan is not paid, the interest on the loan continues to build up. This will make it more difficult to pay off over the long term. There are many credit repair companies that can help borrowers that are in a bad position with their debt. In order to avoid this situation, it is best to just pay off the debt as it is owed on the loan.

Submitted by Alice Bryant  on Fri, 09/18/2015 - 14:21

In the wake of the dual 2008 housing and banking crisis, the majority of United States citizens made a concerted effort to save more and spend less. This attitude was reflected in the financial statistics of the time period between 2008 and 2013. Economists marveled at the percentage of total income that most Americans were able to save throughout that time period, even as many of them decried the practice as somehow stopping the economy.

However, this trend of saving more and spending less seems to have reversed itself completely in a relatively short period of time. Today, many of the major news outlets and reputable financial agencies report that Americans are now earning worse credit scores than ever before and going back to bad habits that predated the coming of the 2008 crisis.

The Stats for American Saving and Spending

As it stands today, the average American family owes US $7,813 on credit cards. This adds up to a total amount on credit of over US $900 billion for the country. To put these numbers in perspective, this household figure is the highest since the crash of 2008 - families held an average of US $8,428 in credit card debt during that year.

These stats are made worse when one considers that the trend that started them actually began a full 10 quarters ago. According to a new analysis by Card Hub, a top credit card comparison site, year over year regression of consumer performance is especially bad in the last 10 quarters, with seven of those quarters showing that the American consumer is moving back towards the behavior that got him into trouble in 2008 in the first place. These people seem to be taking a very short term approach when it came to cashing in on the savings that they had put up following the Great Recession. These habits coincide with a rising debt level overall, as mentioned above, and more access to their credit cards and credit reports.

The Average FICO Score and What That Means

As it stands today, the average FICO score as reported by the Fair Isaac Corporation is now 695. The score ranges from 301 to 850, with a higher score being better. A similar analysis from Experian, one of the top three credit rating agencies in the United States, puts the score at around 667.

In general, 750 is considered a good credit score that will get a borrower the best rates on large asset loans and other financial proceedings. Anything below that is beginning to dip into highly questionable territory for a nation that does not yet seem to have its financial bona fides in place for what could possibly be another financial downturn.

The Federal Reserve seems to mirror this uncertainty with their unwillingness to test the marketplace by raising the base interest rate of the country to a level that is actually tenable over time. Ever since the 2008 crisis and downturn in the economy, the Federal Reserve has basically held the basic interest rate of the country, or the rate that banks borrow from other banks, at near to zero. This is a level that cannot be sustained over time, and even the Federal Reserve admits this. However, they cannot raise the rate to a market level until the economy has been shown to be stable. The more bad credit there is on the books of Americans, the less stable that the economy becomes.

Keeping the interest rate low with high credit all over the country lowers the value of the United States dollar, making that dollar much less able to conduct trade with other countries. This puts the United States at a huge disadvantage in trade with all countries, and virtually ensures a trade deficit that will continue to add to the deficit of the country itself, a number that continues to rise and that the citizens of that country will eventually be beholden to pay back.

Myths about Credit

Even with all of the bad reports about credit on the market today, there are still ways for you to keep yourself out of the mud pit when it comes to credit. However, the first thing that you must do is to destroy all of the myths that have been put into the air about credit., a highly reputable online banking site, found that around 77 percent of United States citizens had absolutely no idea that accounts that they held with high outstanding balances were hurting their overall credit scores. This is true even if the bills are being paid on time. 55 percent of these people actually thought that carrying a balance over from month to month helped their credit score. This is far from the truth.

Many people also believe that they can fix their credit in the last minute if they are getting ready to make a large asset purchase. This is also patently false. Aside from the mistakes that the credit rating agencies themselves often make, dealing with each problem on a credit report is a time consuming effort that has the potential to far outpace the timing on the purchase of a house or a car. If you are trying to clear your credit report up for the purchase of a house, do not wait until the last minute to do it!

Lastly, people often thought that simply holding many credit cards helped their credit score. They did not consider the percentage of money that they were borrowing as opposed to their total borrowing power - just the amount of money that they had as a credit card maximum. This is a mistake that may cost these people tens to hundreds of thousands of dollars on a loan in the future.

The Way to Avoid a Personal Financial Ruin and Collapse

There are also many myths about how to go about getting out of debt and creating a financial safety net. Most financial advisors will actually advise against throwing all funds and income streams into debt repayment. There is also the notion of building an emergency fund and paying for insurance packages that will keep an individual from going back into debt because he or she faced one unexpected emergency.

The best way to keep yourself out of financial ruin and disaster is to pay off debt at the same time that you build an emergency fund for future debt. Stay off of the credit cards for commercial purposes, and make sure that you always monitor your credit score using one of the free sites.

Submitted by Alice Bryant  on Fri, 09/11/2015 - 13:55

The decision to get married is a major one and can affect many areas in a person's life, including the financial areas. While getting married can and does affect credit, there are many myths and misconceptions regarding how. Below are some of the ways that marriage can have an impact on someone’s credit. This information can be used to protect a good credit score and for learning how a married couple can build credit.

The Impact of Marriage on Credit History

Let us start by getting one common myth out of the way. For the most part, getting married will have no effect on a couple's individual credit reports. Their credit reports will continue to be separate and will not merge as is widely believed. Credit reports are based on an individual's social security number, and this does not change after marriage. One marriage partner's credit report will not appear on that of their spouse or vice versa. If one spouse's credit history is negative, it will be impossible to tell simply by looking at the other's credit history. In other words, their credit history will neither worsen or improve based on that of their partner. This disproves the myth that one spouse’s bad credit score will make their partner’s score worse.

Another misconception has to do with a wife changing her name. The myth is that the new name comes with a new credit history and erases the old one. If a wife opts to take her husband's last name, this means that she will have a new name on her credit report. Her credit history from her maiden name will carry over to the new one.

Circumstances Where Marriage Can Affect Credit

Should a married couple make a joint application for a credit card or a loan, then both of their credit histories will play a role. The lender will look at both of their credit histories when evaluating them. If one has bad credit, then they may be turned down. Alternatively, their application may be approved; however, they may have to pay higher interest rates. If the one with the better credit score were to apply separately, their interest rates would be lower as a result. In such cases, it may be best for the spouse with good credit to apply for the loan or credit card individually. It is important to note that this is only a viable option if the spouse’s individual income and assets allow them to meet the loan qualifications.

Married couples often open joint accounts and those do affect both credit histories. If more than one person is added to an account, it will appear on each person's credit history. This means that the positive or negative history of one account holder on that account will be credited to the credit history of the other. The same thing happens when parents add children as authorized users on their credit cards or when people co-sign on loans for friends or relatives. The relationship is irrelevant, the important factors are the names listed on the account. Both people are committing to managing the account and therefore the account will show up on both their credit reports. One benefit is that if one spouse does not have a credit history at the time that they get married, adding them as a joint account holder may help them to establish one. Since the account appears on both credit reports, it will help with the independent qualification for credit; however, creditors and lenders will try to collect from both spouses should the account become delinquent.

It is important to note that adding a spouse as an authorized user on an account will not cause it to be factored into their credit score. Someone who is an authorized user and not an account holder is not responsible for paying back a debt.

Benefits of Individual Accounts

In the event that the couple gets a divorce, the joint account could be closed. Having individual accounts would allow each account holder to have open accounts in their own names. It is important that both spouses be in full agreement with regard to the opening of a joint account. Finances are the most common cause of strain on marriages and any appearance of secrecy with regard to opening accounts could start trouble.

Spouses Should Get Full Disclosure from Each Other

Couples should share their credit reports with each other before getting married. If a married couple has not yet reviewed their spouse’s credit report, they should do so as soon as possible. They can get free credit reports from the three major credit reporting bureaus. When looking at their spouse's report, they should pay special attention to things like:

  • High balances
  • Bankruptcies
  • Late payments
  • Unpaid student loans
  • Foreclosures

Protecting a Good Credit Score is Important

While bad credit can certainly be the result of extenuating circumstances like high medical bills, it is often a measure of an individual’s ability to manage debt. It is possible that a spouse with bad credit is showing that they have a history of making poor financial decisions. It is important that their partner think carefully about whether they are willing to entrust them with responsibility for the household's finances. They should consider the risk to their own good credit rating. One way to handle this situation is for the spouse with better credit to take over the finances until their partner shows that they have improved their debt-handling skills. Until the improvement is seen, they should not open any accounts jointly.

Submitted by Alice Bryant  on Thu, 09/03/2015 - 13:09

For many people with bad or no credit, finding an apartment or other place for rent can become difficult. Even if a potential tenant shows up with cash, the property owner will still most likely run a credit check.

That credit check can ruin what was otherwise a good proposition. But there's hope for those with bad credit. It's still possible to rent a nice apartment; it just may require a little extra effort.

1. Check the Credit Report

Before doing anything else, it is important that people know what their credit report looks like. In some cases, having a copy of the credit report can even save potential renters some time and money. Providing the property owner a copy of a credit report can keep them from running them and charging for the service.

If finding an apartment isn't an immediate concern, potential renters can take some time out to try to repair their credit somewhat before they start searching for apartments. Otherwise, it helps for them to know what's listed on the credit report in general. A potential landlord may ask about some of those items.

2. Shop Around

A mistake that many people make is to narrow their choices down to just one apartment. In reality, it's usually better to narrow choices down to several picks. It's impossible to know how any one situation will play out. Placing hope on a single place can turn into disappointment.

Having multiple choices also allows people looking to deal with multiple personalities. Bad credit can cause a property owner to turn someone away, but there are other property owners that won't mind at all. Shopping around can give a nice mix of personalities to try to work with.

Independent vs managed

A good example of this idea comes with the type of location someone wants to rent. An independent landlord is more willing to work with someone. He or she is more amendable to working out deals or setting up unique payment plans.

By contrast, a property manager may have set guidelines that he or she cannot veer from in any way. So sometimes it's a good idea for renters to look beyond one type of dwelling. When the apartment complex won't deal, maybe the owner of a townhouse will.

3. Use a Cosigner

Using a cosigner is a tricky proposition.

  • The property owner has to allow for someone to cosign.
  • The cosigner has to have okay credit.
  • The cosigner has to understand the responsibility involved.

However, a cosigner offers property managers a guarantee that they will receive their payments no matter what is going on.

4. Offer a Larger Deposit

As people say, money talks. Many property owners can look past bad credit if someone offers a larger initial deposit. Alternatively, offering to pay several months of the rent at one time can also sway a property owner that's indecisive. Not all property owners will accept such offers, but some will.

In some cases, the property owner may ask for more upfront to offset someone's bad credit. It's a proposition worth considering for those that have the means to pay that extra security deposit or fee.

5. Ask Past Landlords for Help

Letters of reference aren't always helpful, but sometimes they can come in handy. They do help to prove that despite bad credit, a person has still come up with their monthly payments and remained in good standing with the property owner.

This can also work with a letter of reference from some other professional. An employer or past employer can also write up such letters.

6. Check for Places that Don't Check Credit

Some property owners do not check credit. When searching for a place, apartment hunters may come across many listings that explicitly say they don't check credit.

Even for those that don't say anything about credit checks, potential renters can save a lot of time by simply contacting any that sound interesting, and blatantly asking if they run credit checks or not.

7. Stay Within Affordability

One mistake that many apartment hunters make is to look for apartments that are obviously outside of their means. It's understandable that someone would want a nice apartment in a nice area. They may even think that if push comes to shove, they can make up that monthly payment.

However, there is a better chance of getting the keys to an apartment for those that look at places they can easily afford. A good rent-to-income ratio will give a potential landlord a better look at what someone can and cannot afford.

Show and prove

Having a solid history of paychecks and rent payments proves that someone can handle future rent payments. Having a strong income shows that someone does have the means to make the payments. Those seeking a new apartment would do well to keep a full year of this kind of proof on hand.

8. Negotiate

Bad credit does not mean an apartment hunter cannot negotiate. This is especially true when dealing with independent landlords. People forget that a lease is a contract, and a contract isn't set in stone until it is signed.

There are several things someone could negotiate with a property owner that can improve their chances of moving in to the apartment they want, bad credit or not.

Move in date – For those willing to move in immediately, a property owner may not give as much thought to the credit check.

Trial or short lease – It is possible to suggest a month-to-month or short-term lease. The property owner may allow someone to stay in the apartment if they can pay for several months at one time. Landlords often want longer-term tenants, but they also want to keep their monthly payments coming in, so they may make an exception.

There are several points anybody can negotiate. If there isn't anything, it costs nothing to simply ask the property owner what's required to move in. The property owner may make some suggestions the renter can live with.

9. Be Honest

The most important tip for any apartment hunter is that they should always practice honesty. Signing on with a property owner represents a new relationship. A relationship that starts with falsehoods will end badly.

Bad credit can make finding a suitable apartment harder, but it doesn't make the process impossible. Start with credit, figure out budget, then start looking.

Submitted by Alice Bryant  on Thu, 08/20/2015 - 14:55

Starting or going back to school can be expensive — the average shopping expenditure associated with commencing studies at or returning to an educational institution averages $630 per student per school year. From school supplies to home/dorm work station expenses to computer- and software-related costs, students face expenditures that are often hard to avoid when it's time to start or return to school.

Therefore, it's important to squeeze the greatest financial savings out of your purchases that are possible. A lot of people don't associate saving money with purchasing, but if done the right way — particularly with credit cards — larger-than-expected savings are often possible.

Reward Programs

Many people may be aware of credit card reward programs, but did you know certain cards have bonus rewards for school supply purchases? For instance, some reward for office supply purchases, Amazon, Target, and more.

Sign-up Bonuses

If you were already planning on applying for a credit card that gives you cash back, why not choose one that will reward you for school purchases, as well? For instance, many cards offers hundreds of dollars cash back if you spend a certain amount within the introductory period of card ownership.

Other cards offer even greater bonuses, so before you rush to get a card, check to see who's got the best offer out there.

Price Matching

How frustrating is it to buy something and then see the price of that item fall in the weeks following your purchase or to find that it's being sold at a cheaper price in another store? It's true that many stores now allow you to bring the receipt back and be credited with the difference in price, but this can be a time-consuming chore involving a second trip back to the shop and research at other outlets. Sometimes the store needs proof in the form of a coupon, store advertisement or printout of an online offer, an additional hoop to jump through.

Fortunately, many credit cards now essentially perform some of these actions for you automatically and give you back the difference electronically.

Online Shopping

Many credit cards offer their own shopping portals that provide ways to save money from specific retailers and increase rewards and cash back when you use their cards to make purchases.

If you're going to be shopping online anyway, this can be a very cost-effective way to do it. In particular, check out the portals of Barclay's Upromise card, the Discover It card and the Chase Freedom card; research them thoroughly before you get one of their cards, so you know which brands and merchandise are associated with which portal.

By calculating the reward or cash back for purchases on these portals and comparing the resulting effective price on them to prices for the same items on other sites, you can see if you're getting a true bargain or if you're not really getting the best value for your money.

Balance Transfers

If you already have a balance on your credit card, spending more with it will only increase the amount you owe. You can cut this amount by doing a balance transfer to a card with a lower APR or to one that offers a zero-percent promotional rate.

A number of cards currently offer zero-percent APR on balance transfers, including the Chase Slate card, which offers not only zero percent on purchases, but also gives zero percent on balance transfers for the first 15 months you have it. The Slate card waives the balance transfer fee (normally three percent) for the first 60 days, which means you save money on the balance transfer fee, as well.

0% APR

If you don't have much money to purchase school supplies at the moment, but can't wait because school is starting soon, there are credit cards that offer a zero-percent APR on purchases for a limited time, which can give you time to pay for the items you bought without incurring interest charges. Be sure to pay off the balance before the promotional period ends! Both the Discover It and Discover It Miles cards fall into this category, offering a zero-percent APR for 12 months.

Submitted by Alice Bryant  on Mon, 08/10/2015 - 15:20

You can’t go to court over a bad credit score. You won’t go to jail over a bad credit score. But having a bad credit score limits you in many ways, so being in credit trouble might feel as bad as if you were in legal trouble.

Unfortunately, bad credit affects more than just your ability to get loans. Some businesses use credit scores to determine who they will hire and who they won’t hire. Interest rates and insurance rates are sometimes based on your credit score because these rates are based on the likelihood of your paying on time. In some states, insurance rates are higher for people with bad credit than they are for people with DUIs. Whether determining your insurance rate according to your credit rating is right or wrong, your credit rating has more impact on your life than you’d think.

Poor Credit Lenders

Many businesses will still loan you money even though you have bad credit. Some credit cards and car dealerships and rent-to-own stores will allow you to make purchases and owe them money. Interest rates are higher using these forms of credit, and payment times are shorter than usual credit payments. Also, beware of those who offer to help you rebuild your credit using their cards. If you are in financial trouble because you can’t afford to pay your credit card bills, having another credit card will just make the situation, and your credit score, worse.

Short-term, high-interest lenders who attract folks with bad credit scores can give your credit score a boost if you can afford to pay the payments. Unfortunately, the high-interest rates and a short period of the loan routinely make it necessary for the person receiving the loan to take out another loan to cover the loan they already have. The vicious cycle continues. More bad credit can be the result.

Living Up to and Beyond Your Means

Life happens. Unfortunately, many people live from month to month even if they have a good income coming in. Because a couple has enough credit, they use it to buy immediately all of the things they want instead of taking the time to pay for the niceties of life over a period. If life and jobs were secure, this rationale would work. But life and jobs are not secure. If someone becomes ill, loses their job or dies, they are not able to make their monthly payments on all their credit cards with only one income. Because credit is stretched to the limit, the couple may be making credit card payments rather than developing a savings account. So when disaster strikes, they are swallowed up in debt with no savings.

Credit Scams

Carefully read any mail or emails that appear to come from a reputable lender. Occasionally a scammer will get your contact information and try to get you to sign up with them.Read the fine print to determine whether or not the email is legitimate or not. Also, never change your account information from an email request. Always go to the company’s site to check your login and password information.

If a company asks for a fee up front to process your credit or asks you for a processing fee, they are trying to scam you. Asking for money to process an account before it is finalized is illegal. Also, check the company’s contact information out before you sign up with them. If anything looks unusual or shady, don’t sign up with them.

Don’t give any personal information out over the phone, online or through the mail. All information such as name, birth date, Social Security number and any financial account information is private and should not be given out.

Going Straight by Improving Your Credit Score

You don’t have to be poor to have bad credit. Many people who have a good income get into debt by living a lifestyle beyond their means. Some of the people with the fancy houses can’t afford to have furniture, or are in debt up to their necks. Their credit rating has become a serious issue because they are keeping up appearances rather than slowly getting what they want by making good financial decisions.

The best way to keep your credit score from going down is to live within a budget. Sit down and honestly look at your income. Balance your income and the amount of money you spend each month. Make any adjustments in your lifestyle necessary to make your budget work. Once you understand your budget, contact a reputable company for a credit score. Take a good look at the sources of your score to ensure that there are no errors on the credit report.

Check with your creditors. If you are already behind in payments, call them and see what can be done to help you get caught up. Many creditors are happy to work with you to get your payments caught up and improve you credit score.

If you are in debt, you didn’t get their overnight. You won’t get back out of debt overnight. Make a budget and stick to it. You can work and plan your way out of debt and into a high credit score.

Submitted by Alice Bryant  on Thu, 07/30/2015 - 08:52

For most of the country, the summer months are a time of extreme heat and humidity. Without proper protection from the elements, the young and elderly are extremely vulnerable to heat stroke and other health ailments. Even for adults who are relatively healthy, it is important to stay both cool and hydrated. What are some easy ways to keep cool this summer while lowering costs at the same time?

Block Out as Much Sunlight as Possible

Blocking out the light can cut down on one source of heat inside of your home. This can be done by drawing the curtains, pulling down the shades on the windows and closing the blinds. In addition to covering the windows, you can also black them out or put anything else that has a dark color in front of them. The dark colors will absorb more of the light and stop it from getting inside of your home.

Install Energy Efficient Windows

Energy efficient windows can help you lower your costs throughout the year. They work by regulating the amount of light and heat that is allowed to get through the window pane. During the summer months, the hot air and sunlight will be reflected back outside while the cooler air will be kept in the home. If you don't have money for new windows, you can check for cracks or other gaps between the window and the wall where hot air may be getting in. A layer of caulk should fill those gaps and increase the overall energy efficiency of the home.

Stay In The Lower Parts of the House

As hot air will rise, you may want to avoid the top levels of your home if at all possible. Sleeping in a den or basement area can help you stay cool without the need to run a fan or air conditioner. For those who do use fans, you can position a bowl of cool water next to it and have the fan blow on the water. This will cool the air faster and allow you to use a smaller fan to cool larger rooms, which will save you money on electricity costs.

Make Sure That You Have a Place to Cool Off Outside

If you home doesn't have air conditioning or it is too hot for it to be effective, you should consider going to the beach or to a public pool. Spending just a few minutes in the water can reduce your body temperature and give you an escape from the heat and humidity. The pool or the beach is also a great spot for the kids to have fun during summer vacation. Remember, if you or your kids are going to spend time outside, it is important to have sunscreen and plenty of liquids to keep them hydrated.

Keep the Refrigerator Stocked With Cool Treats

One of the easiest ways to keep cool is to eat foods that are chilled or frozen. Popsicles, ice cream or even just a few ice cubes is all that you need to keep cool when the temperatures start to soar to unhealthy levels. If you are worried about your health or keeping your kids healthy while enjoying a nice treat, you can use fruit juice in place of ice cubes to create a healthy and yummy snack. Sucking on a piece of frozen fruit can be a perfect way to keep the youngest children occupied and cool at the same time. While your pets may also enjoy a frozen snack, make sure to check with the vet before giving them anything that could be hazardous to their health.

Don't Exert Yourself During the Middle of the Afternoon

If you have to, adjust your schedule so that you are active when the sun is just coming up or after it goes down. These are the times of day where the weather is coolest and the sunlight will not be an issue. For instance, you may want to think about mowing your lawn first thing in the morning or in the evening hours after you get home from work. You may also want to work out in the evening or while it is dark if you have to do so outdoors. Ideally, you will sleep later in the morning and stay awake later at night to get more done and keep costs down.

Wear Fewer Layers of Clothing

While you may not want to sit around your house naked, you shouldn't be afraid to take off your socks and wear a light t-shirt instead of your normal attire. For children under the age of two or three, it may not be a bad idea to let them wear nothing but their diaper. In most areas, this is socially acceptable even if you have to take them out in public. Babies and young children are often more sensitive to the heat, which means that their comfort and safety should override any sort of public shame that you may anticipate.

While everyone tolerates the heat differently, it is important to stay cool no matter who you are. By keeping your home cool or getting to a location that does have proper air conditioning, you can keep yourself safe and comfortable until the heat subsides. If you have children or pets, it is critical that you know where you can take them if it gets too hot either inside or outside.

Submitted by Alice Bryant  on Fri, 07/24/2015 - 09:48

A bad credit score hangs over your head and affects every aspect of your financial life. Not only is there considerable debt involved with the poor circumstances of the past, but that low number may also make it impossible to qualify for auto loans, mortgages, rental apartments and any other type of credit line. With these difficulties comes desperation to improve your credit, and this is where unscrupulous financial companies and scammers step in.

Having bad credit makes you more susceptible to scams partially due to the emotional strain lack of credit or money can have and partially because some companies are designed to target people experiencing these struggles.

What kind of financial options should people with low credit scores avoid?

The following list of options for people with low credit are not scams. They are perfectly legal. However, they are less than desirable for people who are trying to learn responsible financial management and reduce debt while improving their credit score.

1 – Payday Loans

Targeted at people who need a relatively small amount of cash fast, these cash advance loans give money against a person’s next paycheck. The interest rates are exceptionally high and full payment is expected within weeks. Some providers require electronic access to your checking account so money can be deducted automatically when your next paycheck clears.

2 – Poor Credit and Sub Prime Lending

There are plenty of credit cards, car dealerships, rent-to-own shops and financial companies who specifically target people with poor credit because they know the chance of being repaid much more than is borrowed is high. With a low credit score comes much higher interest rates, annual fees, maintenance fees and a shorter repayment times then for people with a history of financial responsibility.

While it may be impossible to get any other type of auto financing or credit card with poor credit, people who want to turn their personal finance troubles around should be exceptionally careful about the fine print on any agreement. No lines of credit or loans should be taken in desperation.

There is also a rise in credit companies who give short-term, high-interest loans marketed as a way of rebuilding a credit score. While on-time repayment of these debts can put positive ticks on your credit report, the interest payments over 30% and the rapid repayment structure almost necessitate the need to take out more loans in order to pay the existing ones. This type of debt trap is great for the companies collecting the interest payments but awful for people trying to escape from bad financial decisions.

What are some of the outright scams that target individuals with poor credit scores?

While there are plenty of poor financial decisions to be made by people with bad credit, and unscrupulous but legal companies preying upon them, there are also true scammers who trick people into giving them money, access to personal information or repaying loans at the usurious rates.

1 – Personal Loan Providers with Illegal Practices

These companies, who may attempt to mimic well-known companies with a similar name or logo style, may contact you through the mail or email with promises to give you a personal loan that can help you rebuild your credit. Careful reading of the terms and all small fine print should throw up some red flags.

• Asking to pay application or processing fees before you get the loan. This is against the law. Reputable agencies role these fees into the loan itself.

• Lack of sufficient contact information or licensing information for the company itself. All financial institutions need to be licensed in the states in which they operate. If the company is not forthcoming with information about who owns and operates it and what licenses they hold, they are probably a scam. Some attempt to operate with a simple toll-free phone number or an email address.

• Any upfront request for personal information such as date of birth, driver’s license numbers or Social Security numbers should indicate the company is a scam. This also pertains to asking for bank account information. While getting a personal loan from a legal source such as a bank or credit union requires identifying information, it should never be given over the phone or through an email to some financial company who solicits customers randomly.

These red flags should also be watched for when a poor credit customer is approached by debt consolidation companies. These may also prey on people in desperate financial shape who seek any promise of relief.

2 – Too Good To Be True Business Proposals

Whether the advertisement for a business opportunity comes over the phone, in snail mail or email, people need to check it out carefully. Many of these promise credit repair or even riches beyond all imagining. The old adage “If something seems too good to be true, it probably is” should be remembered in the face of these attractive come ons.

People with poor credit are more susceptible to these scams because they frequently have no idea or set plan to bring them out of the money difficulties they are in. Just like they may dream of winning the lottery, the dream of financial freedom showcased by these flashy ads seems to be the answer to all their problems.

What should people look for to avoid business opportunity scams?

• Get rich quick promises. No business model will earn you $1 million by next month. The steps needed to build an income should be clearly outlined and explained. Scams make vague promises, use enticing pictures of sports cars and beach vacations and never explain the precise business model until payment is made.

• Any tough-sell tactics used by the company should raise a red flag. These include limited time offers, indications that the price will rise soon and hints that the interested party would be stupid not to act now.

• Any request for money up front should be met with caution. If limited information is given but more is promised when an investment in the business is made, do not get involved. Business ideas in real estate and investing can scam people out of thousands.

• Beware of Ponzi or pyramid schemes. Income should not be tied directly to getting additional referrals or sign-ups.

People with bad credit want to unburden themselves from the stress and limitations of their past financial troubles. With offers that seem too good to be true and unscrupulous but legal businesses preying on them, their susceptibility to outright scams rises. Education about financial options, professional help to build a workable plan and personal dedication to fixing credit problems are needed in order to take control of their personal finance once again.

Submitted by Alice Bryant  on Fri, 07/10/2015 - 07:27

One of the things people look forward to in life is financial independence. They can't wait to have their own money and buy their own stuff. Upon entering adulthood, many people handle their newfound freedom responsibly. However, many others will find themselves in utter despair. With mounds of debt piling up- and a credit score in the toilet- they may feel as though their situation is hopeless. It is not. Of the people who find themselves in similar situations, many of them can find their way out of debt and bad credit.

Sally- Young & Irresponsible

Sally is a 24-year old college graduate who recently moved back in with her parents. Although she has a job, she has over $30,000 worth of debt. Aside from her student loans, Sally has racked up nearly $10,000 in credit card debt.

Her problem started during her first semester of college. Student loans were only enough to cover tuition, books, rent and food. Any of the extras that come along with college life were paid for by generous friends or her parents. All of her financial troubles were solved when she signed up for a student credit card- or so she thought.

Since the card required no payments for the first six months, Sally decided to max out the card with one large purchase: a brand new television. Once the six months were up, the APR on her card jumped up to nearly 20 percent. She was able to coerce her parents into paying off the debt, but this established a spending habit that would be her downfall in the future.

By the end of her senior year, Sally had maxed out all four of her credit cards. She also had two overdrawn bank accounts closed and sent to collections. It took her over a year to find a new job, so she was not able to make anymore payments on her debt. While her debtors sympathized with her situation, it did not stop them from reporting the defaults to credit agencies. Sally’s credit score was in the mid-500s.

How to Fix It

Putting oneself in such a predicament will undoubtedly do some real damage to a credit score. However, that damage is not irreversible. To restore her credit score, Sally needs to follow three steps. First, she needs to get a copy of her credit report. Next, she must write out a monthly budget. Lastly, she needs to set up payment arrangements with her creditors.

Obtaining a credit report will enable her to have a true assessment of what her creditors are reporting to the agencies. Likewise, she'll be able to correct any false information that's doing further damage to her score.

Her monthly budget will include all of her monthly expenses. Any money she ordinarily spends on nonessential items needs to be placed into some sort of savings. By writing everything out, she will be able to see how much she can afford to put towards her debt each month.

Once she figures out her budget, Sally should get in contact with her creditors. If more than 90 days have passed, then her accounts are more than likely already in collections. Even if such is the case, she still needs to get in contact with collection companies to set up payment arrangements. She will be able to negotiate payments that fit her budget, and put herself on the right path to good credit.

John and Jill - Keeping Up With the Joneses

From the outside looking in, John and Jill have it all. They have a big house in an exclusive part of town. They both drive brand new luxury cars. They even manage to squeeze in 3 or 4 vacations each year. There's one more thing this couple has: horrible credit.

Between the two of them, John and Jill earn a six-figure income. Oddly enough, it is the couple's high income that contributes to their problem. When they got married, they realized that their budget would significantly increase. This encouraged the couple to live the lives they've always wanted.

Unfortunately, they both let their spending get out of control. They bought a house that they couldn't really afford. This put a strain on their budget, but it did nothing to curb their spending. Instead of slowing down, they chose to finance everything through their credit cards.

This way of life was interrupted when John lost his job. This reduction in income finally forced the couple to take a long, hard look at their finances. They were forced to make some difficult financial decisions. Instead of making payments on credit card bills, they choose to pay the mortgage instead. With a few accounts in collections and others in default, the couple's credit had taken a serious hit.

How to Fix It

Fortunately, John and Jill are able to fix their bad credit situation. Unlike a lot of others, these two actually have a few extra options on the table. While they still owe on their mortgage, their home has appreciated in value by 15 percent. One of their two cars is completely paid off. For extra cash, John and Jill may be able to borrow equity from their home. They also have the option of trading in one of their cars for a less expensive make and model. Any money either one of those options will provide a nice start to eliminating their debt.

It is imperative that John and Jill write out an itemized list of expenses before creating a budget. This will give them the opportunity to see just how wasteful they've been with their money. It will also give them the opportunity to see where they need to cut back. In their case, their food and recreation expenses are out of control. They should immediately slice those categories, and continue to make cuts where they are needed.

The city where they live has an excellent public transportation system, so they can do without one car. The money from the sale would be enough to at least cover the debts for two delinquent accounts. John also has a garage full of barely used stuff that would likely bring in enough money to cover a few minimum payments for other delinquent accounts.

Once John and Jill get a few accounts settled, they will be able to rely on Jill’s salary to pay off the other debts. Once these debts are paid, their credit report will improve.

Submitted by Alice Bryant  on Thu, 07/02/2015 - 08:54

When you’re buried in debt and struggling to make payments, it’s only natural to start looking at all of your options. Debt can be crushing and it can be so hard to get ahead. You may be anxious to solve your problem as quickly as possible, but it’s smart to really consider all of your choices for getting rid of your debt and to understand the ramifications that each method has to your credit score. If you’re not aware of all the advantages and disadvantages, you could end up making an even bigger mistake.

Debt Settlement vs. Debt Consolidation

Many people consider both debt settlement and debt consolidation at some point in their journey. They sound similar, but there is an important difference. In a debt consolidation plan, you take out a loan to cover all of your debts at a lower interest rate, and then make payments on just that loan. You save money by having a lower interest rate. In a debt settlement plan, you or a intermediary company negotiates with your original lender to pay a smaller amount than you originally owed. This also reduces your payments and makes it easier to stay on top of things, but it can do harm to your FICO score.

In order to qualify for debt settlement, your accounts usually need to be in default. It’s only after you’ve missed several payments that a creditor will be willing to negotiate for less. In order to make it work on your own, you’ll need to have the cash on hand to pay off the negotiated balance. If you’re working with a debt settlement company, though, that company will pay it off with a loan. You’ll then have to repay the debt settlement company.

Pros of Debt Settlement

In most cases, the payments on a debt settlement loan will be significantly less than the payments on a debt consolidation. This is because the new principal balance is much lower. The debt settlement company earns its payment as the interest on the loan or as a monthly fee that you agree to when you make the arrangement. For those who are in a lot of debt, this may be the only way to get ahead.

Negative Effects of Debt Settlement

Choosing debt settlement over consolidation has a host of negative effects. The worst one is the impact it has on your credit score. If you’ve been paying bills on time, but are struggling to do so, you’ll have to stop making payments in order to be eligible for debt settlement. This starts to lower your score. Once the arrangement has been made with the original creditor, the note on your credit report will then say something about “paid as settled” rather than “paid in full.” This is a red flag to other companies when you apply for new credit, as they’ll be able to tell that you didn’t follow through on your commitment.

Even though your monthly payment may be significantly less, some of the debt settlement companies charge extremely high fees for the use of their services. A higher percentage of your monthly payment may be going to the debt settlement company than if you made use of other methods of getting out of debt.

You’ll also have to pay taxes on the amount of the settlement. For example, if you have $10,000 in debt and a company helps you settle it for $5,000, the extra $5,000 that was forgiven gets counted as income when you file taxes. Those who usually receive a tax refund may find that they owe money at the end of the year.

Your Alternatives

If there’s any way that you can avoid taking a debt settlement plan, it’s probably smarter to do so. For example, many credit unions offer debt consolidation loans to help consumers improve their financial situation. Credit unions may be more committed to working with people who have less than stellar credit scores. Homeowners may be able to take out a home equity line of credit (HELOC) or refinance their mortgage with extra money to pay off these debts.

Consumers with moderate or good credit scores might be able to get a new credit card with a zero percent interest rate on balance transfers. There’s usually a fee involved with this, but not having to pay interest can mean that you are able to pay off the loan more quickly.

Many people also have success with simply contacting creditors and asking them to lower their interest rates. This is most effective when you can tell the company that you have another offer at a lower interest rate and are thinking about transferring your balance. Ask the company if they can meet or beat the other company’s offer. Sometimes, you don’t even need to suggest that you might take your money elsewhere. If you have a good history with the company, they may do it just to keep you happy.

Getting out of debt is a long and arduous process and it requires your constant diligence. However, it’s really important to consider your financial future as you make a plan. Debt settlement will have an extremely negative effect on your credit, but you’ll then be able to start building it up again. Other methods, though, also allow you to build up your credit without the initial damage to the score. Sometimes, a person’s financial situation means there’s no way to avoid debt settlement, but if you can get out of debt using alternative methods, it’s the smarter decision.

Last updated on Oct 10th 3:49 am