Fast Ways to Boost Bad Credit Score

Your credit score determines your interest rate on loans, can affect landing a job, and can limit your apartment options. Before considering a major purchase or move, you should boost your credit score. By following proven tactics, you can boost your credit score within 30 days.

Clean Up Your Credit Report

Incorrect information on your credit report or open accounts with balances due will hold your credit score down. According to the Federal Trade Commission, every consumer in the United States is entitled to one free credit report from each of the three major credit reporting agencies every 12 months. Acquire your free reports and analyze them for mistakes or open accounts. If you find errors in your personal information, or if you see accounts that are not yours, use the dispute instructions on the credit report to request changes. If you see old accounts with balances on them, contact the creditors, make arrangements to pay your account and ask that the payoff be reported to the credit agencies immediately. Once these actions have been taken and finalized, you should see your credit score rise.

Improve Your Bill Paying

According to CNN Money, paying all of your bills on time gives you a great advantage. Late payments are recorded on your credit report and bring your score down. If you can develop the discipline to pay all of your accounts on time for just 30 days, CNN Money estimates your credit score will jump by 20 points. Don't pay less than your minimum payment amount.

Manage Your Credit Accounts

According to online financial resource Bankrate, almost 33 percent of your credit score is based on how well you manage your existing credit accounts. If you close an account, that lowers your available credit and lowers your credit rating. Leave your credit accounts open, but avoid maximizing your balances. CNN Money estimates that holding on to maximum balances on your credit cards can drag your credit score down by as much as 70 points. Keep the balances paid down on your cards, but not paid off. Use your credit cards, but do not maximize them out. Do that for 30 days and your credit score will go up.

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Penalties for Falsified Income Information for Credit Decision

Lying to get credit, including exaggerating your income, is a potentially serious offense that could land you in legal trouble, warns both the Columbia University Legal and Financial Resource Center and the book "How to File for Chapter 7 Bankruptcy."

Bankruptcy Considerations

If you defraud your creditors by lying on an application and then try to file bankruptcy on the debts, you could be imprisoned for federal bankruptcy fraud, according to the book "How to File for Chapter 7 Bankruptcy." Also, you could be forced to pay resulting debts regardless of your financial situation through wage garnishments.

Financial Aid Considerations

Applying for federal financial aid may not seem like a credit application, but in a sense it truly is, according to FinAid. If you lie about your income to try to get more student loans and grants and your school catches you, you can be subject to potential civil and criminal consequences.

Significance

It's hard to determine exactly how much you'll pay or time you'd serve for defrauding your creditors about your income to get accounts. The Internal Revenue Service notes that some people convicted for credit and tax-related fraud received anywhere from one to more than five years in prison.

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What Are Some Problems With Credit Overuse?

When used responsibly, credit cards can be a good thing. Credit cards offer convenience and security, and using them can help you build a positive credit history that can help you get other loans. However, overusing your credit cards--or any other type of credit--can lead to a host of problems.

Debt

One of the biggest problems with overuse of credit is the accumulation of debt. If you are overusing a credit card or line of credit, it typically means you are charging amounts that you can't afford to pay off right away. When you carry a balance on a credit card, you are charged interest, and the longer you carry that balance, the more interest you will accrue. Likewise, if you continue to take advantage of a line of credit, such as a home equity line, you will pay interest until you can get the amount paid off.

Late Payments and Default

When you overuse credit and build debt, you may have trouble making the necessary minimum payment every month. If you pay late or pay less than the minimum due you incur additional fees, which just adds to your debt. Eventually, you may reach a point where you can't make payments for several months in a row. At that point, you will be in default and your lender may send your account to a collections agency.

Damaged Credit and Lowered Credit Score

Overusing the credit you have can damage your credit and lower your credit score in several ways. For instance, a big portion of your credit score is based on what's called a debt-to-available credit ratio--essentially how much debt you have outstanding compared to how much credit you have available. Ideally, you want this ratio to be below 35 percent, but if you overuse your credit, you are likely to have a much higher ratio. So even if you manage to stay current on paying your debt, your credit score may be lowered significantly. If you keep getting additional credit cards or transfer balances to avoid paying them, it can also lower your score. And, of course, if you fall behind on payments or default, it will negatively affect both your credit report and your credit score.

Other Problems

Credit overuse that damages your credit and lowers your credit score can lead to a host of other problems. It might make it more difficult for you to get a job, because many employers perform a credit check before making a hiring decision. Credit overuse can also make it difficult for you to get a home or car loan and lead to higher rates if you do get one. It can also make it more difficult to rent and apartment.

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How to Find Out If a Collector Has Posted the Required Bond to Do Business in the State of Texas

Before licensing a debt collector to do business, the Texas Secretary of State requires the collector to produce a surety bond of $10,000. Bonds come from private insurers and bond companies at prices that vary based on a company's size, operations, assets and history. The truth is, Texas doesn't care what cost the collector pays, it just requires a current, legally issued bond. To protect consumers and anyone considering doing business with a debt collector, the Secretary of State makes debt collector information available for free on its website.

Secretary of State

All debt collectors wanting to do business in Texas must register with the Texas Secretary of State. In order to operate, they must present a $10,000 or greater surety bond from an insurer recognized by the Texas Department of Insurance. Texans concerned about the legitimacy of a debt collector should check the license and bonding status of the collector with the Secretary of State.

Online Verification

The Secretary of State maintains an online database of third-party debt collectors who have filed bonds and are therefore authorized to do business in Texas. Members of the public can visit the Secretary of State's "Debt Collector Search" page and search by name, address, file number or bonding company name.

Reporting

Texans being sought by a debt collector not in the Secretary of State's file can report the incident to the Secretary of State who will then take enforcement action. The collector will then have the opportunity to comply with state regulations by obtaining a bond. Failure to do so may result in the collector being unable to conduct business and pursue any Texas debts.

Other Resources

Consumers concerned about the legitimacy, ethics or legal actions of a debt collection agency can turn to the Texas Attorney General and the Federal Trade Commission with their questions and complaints. Both agencies enforce the Fair Credit Reporting Act and other consumer protections that ensure debt collection is handled fairly and responsibly.

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Can Social Security Benefits Be Seized by a Creditor?

When a debtor owes money to a creditor, the creditor has a number of options for how he can go about collecting the money. While a creditor may initially send the debtor letters or make phone calls requesting payment, if this is ineffective he may choose more severe measures. These can include petitioning a court to allow the creditor to garnish the debtor's income or freeze his bank account.

Federal Law

Federal law prohibits creditors from seizing all forms of Social Security benefits. These include SSI, survivor's benefits, retirement and disability. This includes money that a court has ordered you to pay. If the creditor seizes Social Security benefits, she may be in violation of the federal Fair Debt Collection Practices Act and subject to a fine.

Garnishment

In some cases, a creditor may attempt to garnish a person's income to pay off a debt. To do this, a creditor must receive a court order from a judge that grants the creditor permission to seize a portion of the debtor's income. The creditor will then present this order to the person's employer and ask that the money be set aside. Because seizing Social Security benefits is illegal, a judge would never grant this order.

Bank Accounts

A creditor may also attempt to collect what he is owed by petitioning a judge to allow a bank account to be frozen and funds extracted from it. If the judge grants this motion, the creditor can then approach the debtor's bank and ask that the account be frozen. Although the judge may grant this motion, the creditor is still prohibited from freezing the account or removing money from it if the money being frozen derives from Social Security benefits.

Wrongful Seizure

In some cases, a creditor may freeze a bank account that includes income like Social Security benefits, which are exempt from seizure. This is illegal. To remedy the situation, the debtor should petition a judge to remove the freeze. To do this, the debtor will likely have to provide documentation proving that the frozen account is made up of Social Security and not other funds.

Federal Payments

The only exception to the rule that Social Security benefits are exempt from seizure is if the person to whom the debtor owes money is the federal government. The federal government, which issues Social Security benefits, is legally allowed to garnish a percentage of these benefits if the recipient owes child support payments; federally subsidized loans, such as student loans; back taxes; or money resulting from the overpayment of back taxes.

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How to Eliminate CC Debt

Eliminating your credit card debt can seem impossible but it isn't. If you know your debt has reached high proportions and you've taken an interest in getting rid of it, you have taken the first step in the right direction. Hundreds of billions of dollars are spent each year on credit cards, creating financial woes for consumers and large profits for credit card companies who have a variety of ways to keep you charging. With self-discipline, know-how and patience, you can put yourself in the black and refuse to be taken in by credit card companies.

Instructions

1

Stop using your credit cards. This is the first step to eliminating your debt. It isn't easy to quit using them when you are used to the instant gratification they can provide. Making the cards unusable could be a way to stop yourself from contributing to your debt problem. Some people choose to put their credit card in the freezer, so it is out of sight and not immediately accessible. Others cut up their cards to ensure that they won't use them. At the very least, you should remove your cards from your wallet and leave them at home on a daily basis.

2

Set up a household budget. This task is daunting but absolutely necessary. You need to review your monthly bills and realistically assess how much you spend on things you don't need. There is software that can help you with this process, or you can sit down with a pen, paper and a calculator and add up the number based on your monthly billing statements. Subtract what you take home in monthly pay from the bills you have in that period.

3

Free up cash flow. There are several ways to do this. Call your credit card companies and ask for a reduction in your interest rate. If your payment history is good and your credit rating is also good, they will usually cut a deal with you. Talk to them about applying your payments only to the principal of your balance, rather than the interest rate. Sometimes, they will allow this, too. Call them and tell them you are having a difficult time making your minimum payment and see what kind of deal they will offer you. Credit card companies would rather get some of your money than have you default altogether. Consolidate your debt with 0% APR credit transfers. New cards usually offer 0% APR for a period of time and will transfer your balance from other cards to theirs.

4

Avoid using your debit card and use cash instead. Even if you've stopped using your credit cards, you can still overspend on your ATM card. Taking into account your budget, take out your weekly disposable income in cash. When you have spent it, don't take out any more cash unless it is absolutely necessary. Challenge yourself to have some left over at the end of each week.

5

Pay down your highest interest rate credit card first. Now that you have a budget and have increased your cash flow, pick the card with the highest interest rate and pay down as much as you are able each month. It's important to pay more than the minimum amount if you haven't cut a deal with your credit card company, so your money pays off the principal balance. Go down the list of your cards, highest interest rate first. This is when you need to have patience and be diligent. This process can take a couple of years, depending on the severity of your debt, but it will be worth it.

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How to Pay Off Debt While Saving for Retirement

You've got major financial hurdles to deal with--you're in debt and you have to start saving for retirement or you'll be working long into your retirement years. But now you're wondering which to do first and if it's possible to save for retirement and pay off debt at the same time. Here is a guide to help you pay off your debt while saving for retirement at the same time.

Instructions

1

Plan to put most of your efforts toward paying off the debt, especially if it's a high interest debt such as a credit card. Once you pay off the debt, you can start putting your debt payments toward your retirement.

2

Find out if the government can help you save. You may be able to join the KiwiSaver government retirement savings (see Resources below).

3

Talk to your human resources department. Many businesses offer retirement accounts and 401K's. If you put aside a certain amount of money, your business may match it. Most experts feel you should put enough money into your 401K to get your company match no matter how much debt you're in.

4

Have the money directly taken from your paychecks. If you don't see the money, you may not notice it's missing. Have that money put into a retirement account and/or into a savings account that you can apply toward your debt. You could also put a certain percentage of the money your bank pulls out toward debt and the rest toward retirement. Perhaps 70 percent of the money you take from your paychecks goes for debt, while the other 30 percent goes for retirement.

5

Put extra money toward debt reduction to get it paid down fast. Take rebate checks, bonuses, money from garage sales and so on and apply it directly to your debt.

6

Make sure you have an emergency fund so small emergencies like car or appliance repair don't undo all the work you've done toward paying off your debt.

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How to Settle Personal Credit Card Debt

Personal credit card settlement is becoming a popular means of erasing financial debt. The key is to know when and how to use debt settlement to eliminate credit card problems and restore finances.

Instructions

1

First, make a list of all your credit debt including amount, interest rate, payment schedule, and required minimum payment before settlement.

2

Second, prioritize your personal credit card list starting with the highest interest rate and the smallest debt amount owed.

3

Third, look at minimum payment amounts of remaining credit card debt as well as personal amounts owed to determine if settlement is warranted.

4

Next before settlement write out your personal income and expenses and see if you can make any cuts to free up finances to pay towards credit card debt.

5

Determine if some lower credit card balances with particularly high interest rates can be paid off first, prior to debt settlement.

6

Investigate different credit card debt settlement companies including fees, payment amounts, procedures, and payment terms.

7

Research your legal rights involved in debt settlement in terms of procedures involved, credit card company rights, effects on credit ratings, and other financial implications

8

Compare these implications to other procedures for reducing or eliminating credit card debt such as debt consolidation, management, and bankruptcy before entering into a debt settlement contract.

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How to Protect a Pay Check From Garnishment in Georgia

In Georgia, creditors may take up to 25 percent of your post-tax earnings to recover past-due debts. Garnishment is a procedure that creditors can use to force you to pay for your past-due debts. Like most states, Georgia permits creditors that follow proper legal procedures to execute wage garnishment orders against nonpaying debtors. In most cases, the creditor must file a lawsuit in a county magistrate court and obtain a judgment against you before it can garnish your paycheck.

Instructions

1

Contact your creditor as soon as you realize you will not be able to make your debt payment. Staying in contact with your creditor can help demonstrate that you are willing to repay your debt, even if you are experiencing temporary financial difficulties. Your lender may be willing to change your due date or provide a temporary forbearance to prevent your account from becoming delinquent.

2

Use a credit counseling service to negotiate with your creditor if your creditor is not willing to negotiate with you directly. A credit counseling service can work with your creditor to lower or eliminate interest, waive late fees and suspend collection efforts to help you bring your account current and pay off your debt.

3

Negotiate a settlement with your creditor. If you are behind on your payments, the creditor may accept less than the full balance as payment in full. A debt settlement can save the creditor the expense of pursuing a judgment and executing a wage garnishment, and provides the certainty of receiving a portion of the account balance as payment.

4

Answer the summons issued by the Georgia magistrate court by challenging the validity of the lawsuit. If you can show that the four-year Georgia statute of limitations has expired on your debt, or that the creditor did not serve proper notice of the suit pursuant to Georgia law, the court may dismiss the lawsuit. A Georgia attorney can help you challenge the lawsuit to avoid judgment and wage garnishment.

5

Hire a Georgia attorney to help you challenge the garnishment order if the creditor has already obtained a judgment. You may be able to avoid garnishment if the creditor has filed the order outside of the Georgia statute of limitations, your earnings are already subject to other garnishments or you have little nonexempt disposable income.

6

File bankruptcy if no other alternative is available. Once you file for bankruptcy protection, most creditors cannot pursue a judgment or wage garnishment to collect the debt. If the creditor has already filed a lawsuit against you, bankruptcy will typically halt judgment proceedings.

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If I Paid Off a Credit Card & Cancelled It, Can I Reopen That Account?

A credit card that is paid off and cancelled is considered closed and cannot be reopened. However, a new account can be opened following a credit check. Your status as a former customer may allow you to accomplish this easily over the telephone. Resuming use of a credit card is easier when you have the account open after paying it off. Some people store cards they are not using in a bank safe deposit box to avoid impulse spending.

Credit Approval

You're no longer a customer of the credit card company once you cancel the card. The company treats you as a new applicant when you return. While your account is active, the company has a right to periodically check your credit to make sure you are still a good credit risk. It loses this right once you cancel your account. Once you return the credit card company needs assurance that you are credit worthy and that's one reason for the new credit check.

Excessive Debt

Credit card companies realize that some people who max out other credit lines will attempt to reopen accounts they earlier closed. That's another reason they check your credit before opening a new account. In addition to confirming that your credit score is acceptable the company wants to make sure you have not taken on excessive debt since closing the original account.

Review Your Credit

Check your credit before applying to determine if you qualify for more credit. Credit reports are available for free from AnnualCreditReport.com, a website endorsed by the Federal Trade Commission to offer free credit reports. The free reports are available under provisions of the Fair Credit Reporting Act. Credit scores of 720 or higher generally lead to easy approval on most cards, with 620 the minimum score needed for competitive interest rates.

Credit Limit

Your credit limit could differ from the original account depending on your credit situation. A low credit score of around 620 and high balances on other cards likely will result in a low credit limit -- if you are approved at all. Credit card companies generally like to see high credit limits and low balances on your other credit accounts along with a record of timely payments over the past 12 to 24 months.

Applying In Writing

Applying through the mail rather than on the telephone allows you to enhance your application by adding a letter. Use the letter to discuss your current credit status as well as your former relationship with the card company. Ask that a new account be opened in your name with a credit limit that matches or exceeds your former credit line.

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About Collection Letters

A collection letter, otherwise known as a dunning letter is a tool used by businesses to collect on delinquent accounts. While some businesses use these letters as a last-resort method, collection letters can be a budget-friendly and customer-friendly way to collect on past due accounts.

Function

Also called dunning letters, collection letters function as a written notification of past-due balances. Meant to nudge past-due customers to make payments, they are usually sent strategically one after another. With each letter the tone grows more direct, until some type of payment is received. An effective collection letter achieves its purpose without destroying the goodwill between the original debtor and the customer.

Benefits

During business hours many customers are either at work or will not answer calls from unrecognized phone numbers. Collection letters are unavoidable, as everyone checks the mail. In truth, this characteristic of a collection letter also benefits the customer. Because the letters lower the cost of collections, the collections agency can easily offer customers a settlement for an amount that is less than the original debt. In addition, a letter is usually preferable over talking to someone over the phone because a letter feels less threatening. Collection letters are thus more cost efficient and time efficient than phone calls when collecting past-due accounts. This makes collection letters a more appealing alternative to collection calls.

Misconceptions

Many people think that sending out collection letters should be a last resort, something done only when phone calls fail. On the contrary, a letter gives the customer a tangible reminder of the debt. It serves as proof-of-collection efforts.

Types

There are two types of collection letters. A notification letter informs the customer that the debt owed is past due. It is usually sent immediately after a debt becomes past due. The second type of collection letter is called an action letter. Sent out once an account becomes seriously overdue, this letter informs the customer of actions the company may take if the debt isn't paid immediately. Many times, multiple types of each letter will be sent, with each escalating the previous letter's content.

Considerations

According to the Fair Debt Collections & Practices Act, you can only send collection letters that are accurate to customers. Thus, stating that the account will be turned over to a credit bureau in 30 days is only legit if it is followed through. When the action isn't followed through, it becomes false, and a false action claim is illegal.

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Debt Forgiveness & Credit History

Debt forgiveness can be a huge financial relief. If you recently experienced foreclosure, you may have concerns about the fate of your remaining mortgage debt. Lenders have many options to recoup the balance of the loan, including filing a lawsuit. The course of action chosen by the lender impacts many aspects of your credit score.

Mortgage Debt

Mortgage debt doesn't automatically disappear after foreclosure. A lender can choose to forgive all, part or none of your mortgage debt. In cases where all of your debt is not forgiven, financial hardship can follow you well beyond the foreclosure date. Consult with a HUD-certified foreclosure counselor to determine the rules surrounding deficiency judgments in your state. In some states, lenders can wait until you regain financial stability before filing a lawsuit. This can be months or years down the road. Avoid surprises by learning your foreclosure rights in advance.

Credit Stains

If a lender chooses to file a deficiency judgment to recoup the balance of your loan, the judgment becomes public record. Public records are added to your credit report. The longer the judgment appears as unpaid on your credit report, the more negative the impact on your credit score. Unfortunately, even after a judgment is paid, it will remain on your credit report for seven years from the initial date the judgment is filed.

Bankruptcy

Some homeowners choose bankruptcy to escape the financial burden of a deficiency judgment, but bankruptcy also can sabotage your credit score. Bankruptcies remain on your credit report for 10 years, during which opening new credit accounts is nearly impossible. Consider the sacrifice you want to make in escaping the judgment debt before committing to bankruptcy, since both have long-term ramifications.

Repaying Debt

When a lender chooses to forgive part of your mortgage debt, you may decide to make payment arrangements instead of filing for bankruptcy. However, if you were experiencing financial hardship before foreclosure, affording payments for your previous home and new residence may be a challenge. If you miss a payment toward your judgment, your credit score declines even further. Alternatively, the added burden can lead to trouble keeping up with other household bills and financial obligations.

Alternatives

Debt after foreclosure can wreak havoc on your credit rating. Foreclosure itself leads to an 85 to 160 point drop in your credit score, but coupled with judgments, bankruptcies and late payments create a dramatic decrease in your score. There are alternatives to foreclosure to help you avoid judgments and the negative impacts of foreclosure on your credit. A deed in lieu of foreclosure is a viable option for homeowners experiencing financial hardship. A deed in lieu of foreclosure occurs when you voluntarily give your property deed to your lender in exchange for debt forgiveness. With a deed in lieu, you neither have to go through foreclosure nor owe money after giving up your home.

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Debt Reduction Definition

Debt reduction, often referred to as debt relief, is the process of reducing your debt balance through a systematic approach to repaying your debt or the use of a financial maneuver to improve your debtor position. Refinancing and reorganization of debt are two strategies used by companies and individuals to reposition debt for more efficient payoff. Debt relief companies also assist those in over their heads with debt by negotiating with creditors.

Benefits

Debt reduction offers many financial and psychological benefits. Lower debt makes it more feasible to keep up with monthly debt payments. This avoids additional late payment fees. Lowering your debt balance also lowers the amount that you pay in interest in the short term and long term. This can add up to significant savings. Additionally, the debt consolidation site BCAB points out that reduced debt also relieves a significant mental strain on those who carry debt.

Paying Down Debt

The healthiest path to debt reduction is to pay down your debt quickly and efficiently. The sooner you pay off debt, the less risk you run of having your debt situation get out of control. This requires a disciplined and strategic approach that goes beyond meeting minimum monthly payment requirements. Paying off higher interest rate loans first and moving on to other debts is a systematic approach.

Refinance

Debt refinancing is a maneuver used by individuals and businesses to improve their financial positions. Refinancing involves using funds for a new loan to pay off funds on an existing loan. Commonly used with home mortgages, this process is often used to get out of a higher rate loan and into a lower rate loan. Some refinancing options also provide cash-out components, which allow you to get equity out of your property or asset to use in paying down high-interest loans.

Reorganization

Debt reorganization is a formalized process used by individuals and businesses to avoid bankruptcy and dissolution. The website Law Firms discusses Chapter 13 individual debt reorganization, which establishes a plan for people making certain incomes to restructure debt over time. Businesses sometimes use Chapter 7 bankruptcy as a way to reorganize debt to avoid the more finalizing Chapter 11 bankruptcy. Though it has drawbacks, it offers an opportunity to manage some of the company's overwhelming debt load, which prevents business growth and stabilization.

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Credit Repair and Debt Solution

If you're struggling with bad credit, fixing your credit and improving your credit score will make your life easier. There is no single credit repair solution that meets every consumer's needs. However, you can evaluate your situation and take steps to help yourself get out from under the effects of bad credit.

Credit Report Evaluation

You can start repairing your credit by reviewing your credit reports. Go to annualcreditreport.com, the only site authorized by the Federal Trade Commission to provide this information, to request your yearly free copies of your credit report. Review your credit report carefully for any mistakes.

Report Correction

If you do spot an error, you can have it removed. There are three consumer credit reporting agencies: Experian, TransUnion and Equifax. Once you spot an error, you can contact the company, explain the error and ask for it to be removed from your report. You can do this through the mail or online. If you send evidence through the mail, be sure to send copies of your supporting documents, not originals.

Rebuilding Credit

Repairing errors on your credit report only gets you so far, and you can't remove correct information. If you have negative information on your report that's reducing your credit scores, the only way to raise the scores is to improve your credit behavior. Creditors want to ensure you can repay your loans, so you have to show them you're a responsible borrower by, for example, paying all your bills on time and not maxing out your credit cards.

Getting Help

Self-help credit repair is an option for some, but for those who are unable to maintain a dedicated financial plan and stick to it, seeking outside help is an option. Be careful, however, as many companies that offer debt repair services offer consumers little or no benefit, and are little more than scams to get you to pay more money. Investigate any debt repair or financial planner carefully before entering into any agreement.

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How to Wipe Out Debts Without Bankruptcy

You don't have to declare bankruptcy to wipe out debts. Declaring bankruptcy is the act of declaring that you are unable to pay your creditors. It is most often initiated by the debtor in an effort to eliminate crushing debts and start fresh. While bankruptcy will stop debtors from calling and allow you to get your finances back in order, it will also cause you to give up some of your possessions and affect your credit rating for many years. Bankruptcy can keep you from getting certain jobs, and from buying a home or vehicle on credit for up to 20 years. It may be much wiser to eliminate your debts without bankruptcy. Here are some tips you should follow.

Instructions

1

Stop spending. Many people end up in a bankruptcy situation because they are spending more money than are making. Closely examine the amount of money you are spending and on what. Eliminate all non-essential spending until you have all of your bills in order.

2

Make more money. If you find that you are not making enough money to cover your bills, it may help to take a part time job for a period of time that will allow you to pay off some of your debts.

3

Downsize. If after evaluating your bills, you find that your living expenses cost more money than you can afford, then you need to find cheaper living arrangements. This can mean moving in with parents, or other relatives. This can mean moving from a large house to a smaller house. This may mean taking roommates into your own home. If your living expenses continue to be more than you make, no amount of bankruptcies or debt consolidation will help you.

4

Consolidate your bills: If you have equity in your home, it makes a lot more sense to pay off all of your bills using your home equity though a debt consolidation loan. When consolidating debt, be sure to not take so much money that your house will not be worth what you owe on it. Also, only consolidate your bills if your combined payment is a good deal less than your combined bills. The most important part of consolidating your bills is that you cannot run those bills up again. Destroy or lock away all revolving credit that you just consolidated.

5

Pay one bill at a time. If debt consolidation is not something you can do, you need to concentrate on paying off one bill at a time. After your basic bills and living expenses are covered, you need to take the balance of your income and concentrate on paying off your bill with the smallest balance. When that bill is paid off, determine which bill has the next smallest balance and use your excess money plus the money that went to paying the previous bill each month and pay off that bill. As you pay off each bill, you will find that the next bill will be paid off faster because you can apply more money to the bill you are concentrating on.

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What Date Is Applicable in Statute of Limitations on Credit Card Debt Collection?

All debts in the United States have a statute of limitations on them. This does not mean that the debt a person owes a creditor will go away after a period of time. Rather, it means that the creditor have a limited amount of time in which to file a lawsuit to collect on her. The date from which the statute of limitations starts is usually the date on which the last payment to the creditor was made.

Statute of Limitations

The statute of limitations on a debt is the length of time allotted to a creditor to file a lawsuit against an individual who owes it money. The precise length of the statute will depend on the type of debt and the state in which the individual resides. After this statute has expired -- meaning that the length of time designated by the state has elapsed -- the creditor can no longer legally sue the individual.

Commencing Date

Usually, the date that the statute of limitations will start is the day on which the debtor last made a payment. However, in some cases, the statute may commence not when the last payment was made, but when the account was written off.

Resets

Depending on state law, there are a number of situations in which the statute of limitations may be extended or even entirely reset. For example, if a debt remains delinquent, but a person makes a payment on the debt, then the statute might start over at the beginning. In addition, if the credit card company sues and wins the case, then the statute might be reset again.

Considerations

According to MSN, the exact date from which a statute of limitations starts will depend on state laws. For example, in some states, a change of status may not just include a new payment on the debt. In some cases, agreeing to repay the debt through a different payment plan or even acknowledging that you owe the creditor money may extend the statute of limitations.

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How Is Wage Garnishment for the Head of Household Calculated in Florida?

You are subject to wage garnishment after a court-issued judgment. State laws vary regarding how much can be taken from your paycheck. Florida has strict laws regarding garnishments, particularly as they relate to the head of household.

Calculation

In Florida, a creditor can garnish the amount by which your income exceeds 30 times the minimum wage ($7.25 as of March 2011) or 25 percent of your disposable income, whichever is less.

Head of Household Exemption

In Florida, a head of household is exempt from wage garnishment. A head of household is a person who provides 50 percent or more of the income for at least one dependent. A head of household earning $500 or less is not subject to wage garnishment. Income above $500 per week may be garnished if the head of household agrees to it in writing.

Other Exemptions

Not all income can be garnished. In every state, Social Security, pensions, public benefits (unemployment benefits, workers' comp and veteran benefits) and insurance and annuities are exempt from wage garnishment. Regarding pension benefits, Florida goes one step further and protects all retirement benefits.

Nonexemptions

No matter your source of income, Florida -- like every other state -- enforces wage garnishment for child support, alimony and federal taxes.

Florida Statute of Limitations

A creditor has four years to collect on open accounts, defined as credit cards or oral contracts. The statute of limitations is five years for written contracts such as installment loans. Once the statute of limitations is up, the debt becomes time-barred, meaning that the creditor can no longer make an attempt to collect.

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Debt Consolidation & Foreclosure Prevention

If your finances begin to spin out of control and you are faced with looming debt as well as an expensive mortgage, you may think the easiest way out is bankruptcy or foreclosure. However, Americans who find themselves in sticky financial situations may be able to take care of their debt problems without damaging their credit.

Debt Management

If your debts are more than you can manage, consider consulting with a government-approved credit counseling agency to create a sensible budget and a plan to pay down your debts. You can also attempt to contact credit card companies to which you owe balances. They may lower your interest rate to make your monthly payments more affordable. Furthermore, you may consult with a third-party credit negotiator to lower your credit card balances and pay off your debts more quickly without bankruptcy.

Consolidation

If your monthly debt payments or interest rates are sky-high, consider obtaining a consolidation loan. If you own a home and have equity in it, you may qualify for a second mortgage, or home equity loan. These loans allow you to borrow against your own equity to pay off expensive balances at a low interest rate. Better yet, interest paid on a home equity loan or line of credit is tax-deductible on federal income taxes. If you do not have equity in a home, apply for a personal loan. Lenders will require collateral and charge a higher interest rate, but you may find it easier to pay a single monthly bill rather than multiple payments to many creditors.

Foreclosure Alternatives

The U.S. Department of Housing provides all Americans with free access to foreclosure counselors. The counselors can provide you with foreclosure alternatives. Some homeowners are eligible for special loan modifications or refinance options under President Obama's Homeowner Affordability and Stability Plan. This plan allows you to stay in your home, as well as lower your monthly mortgage payments to a price you can afford. If you don't qualify for this plan, talk to your mortgage lender as soon as you have difficulties affording your payments. Lenders may choose to work with you to help you stay in your home, but timing is critical. As you get further behind on payments, your lender will become less flexible.

Warning

Beware of scams that seek to profit from your misfortune. Some debt negotiation agencies may claim to be non-profit or government-approved and are likely to charge expensive upfront fees for their services. Avoid companies that instruct you to stop making credit card payments or that claim to be able to lower your overall debt balances. While the company may eventually be successful in following through on these claims, there are no guarantees that the services will work. Worse, you may end up with a much higher debt due to overdue payments, fees, compiled interest and penalties.

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The Right Way to Pay Off Debt

Credit cards and loans provide a way to purchase an item or a service immediately and pay off the balance over a period of time. In the case of two or more credit cards or loans, the debt load can begin to pile up for the user of these financial instruments. Proper debt management can benefit a credit user, reducing the length of time that debts drag down his personal finances.

Instructions

1

Evaluate all credit card and loan statements and pay attention to the size of the remaining balance on each account. Organize the balances on a piece of paper, listing the account with the smallest balance as Item 1. List each additional account balance moving down the list, from the lowest balance to the highest balance.

2

Pay double the minimum payment required each month on the account with the lowest balance, while making the minimum payments on all other accounts. Continue until the account with the lowest balance has been paid off.

3

Apply the amount of money which was being spent toward paying off the smallest account to the next-higher account balance. If the minimum payment was $20 a month, and another $20 to double it, apply the full $40 a month to the next-higher account balance along with the minimum for that account. This will be nearly a triple payment on that account. Continue until the second account has been paid off.

4

Use all of the monthly funds you would have spent on the first accounts to pay off the third-highest balance, along with its normal minimum. Do the same for all additional accounts until paid in full. By applying the payment funds being used for previous cards toward the next larger debts sequentially, debts can be paid off in a systematic way.

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Can Disability Income Be Garnished in Indiana?

Garnishment occurs when courts grant a creditor or other party owed money permission to take income directly from the debtor's revenue stream to pay back the debt in question. This usually occurs with paychecks, though it can also impact bank accounts and benefits. Answering the question of whether Indiana allows the garnishing of disability income requires taking a look at the state's garnishment laws and types of available disability income.

Indiana Garnishment Procedure

Indiana provides two possible situations for wage garnishment. The first occurs when a creditor or other party owed money sues a debtor and receives permission to garnish in order to cover unpaid debts. Creditors must obtain a writ of garnishment, or official permission to garnish, and present this writ to the proper authority, such as employer or bank. The other type of garnishment permissible in Indiana, known as a Voluntary Wage Assignment, occurs when a creditor and debtor agree upon a deal to garnish wages and sign a contract attesting to this agreement. Indiana grants garnishments on credit card debts, medical debts, debts from contracts such as those signed on cell phones and unpaid taxes, child support and alimony.

Direct Garnishment in Indiana

Direct garnishment occurs when the courts grant permission to take money straight from a revenue stream before that money reaches its recipient. For instance, when an employer garnishes wages, it comes straight from the paycheck, and qualifies as a direct garnishment. In almost all instances, Indiana exempts disability income from direct garnishment. However, according to a pamphlet published by Indiana Legal Services, a nonprofit organization, the state may garnish Social Security Disability benefits to cover unpaid child support payments or debts owed to the government, such as unpaid taxes.

Deposit Account Garnishment

In some instances, such as when wage garnishment proves impossible, Indiana permits the garnishing of deposit accounts through which debtors receive benefits. State and federal laws prohibit the garnishment of many types of benefits received in deposit accounts, including Supplemental Security Income (SSI), all Veterans' benefits, including disability pensions from the military and disability benefits received from other forms of Social Service. If you live in Indiana and feels as though a judge unfairly grants permission to garnish disability income you may seek legal advice and assistance and even file a counter claim.

Additional Information

In most instances, creditors or individuals owed money must sue you in order to obtain permission to garnish. However, because garnishment of disability income in Indiana only proves legal in cases of unpaid child support or debts owed to the government, this is not the case in such instances. Government agencies may directly garnish benefits without suing a debtor and need not obtain any permission to garnish. Despite this, the government must still notify you if it intends to garnish disability income to make up for unpaid debts.

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Can You Get Your Money Back After Being Garnished?

If a creditor files a lawsuit against you and obtains a legal judgment for a debt, it may apply for a writ of garnishment in most states, which permits the creditor to contact your employer and order withholding of a portion of your wages to pay against the debt, interest on the judgment and costs associated with the judgment lawsuit. The writ may also allow the creditor to seize funds in your bank account. In most cases, you have little recourse against a garnishment order; however, in some cases, you can get your money back.

Statute of Limitations Expiration

Each state sets a statute of limitations for garnishment, which is the length of time that the judgment is valid and limits the time frame during which the judgment creditor may continue garnishment or other post-judgment collection efforts. For example, Georgia law limits the validity of a civil judgment to seven years. If the creditor continues garnishing your wages or bank account balances after the statute of limitations expires, and it has not renewed the judgment through the court, you may recover funds garnished after expiration of the statute of limitations.

Garnishment of Exempt Funds

Federal and state laws provide exemptions that prevent the creditor from taking all of your funds. Under federal law, 75 percent of your wages are exempt from garnishment unless the debt is for unpaid child support or taxes. Disability, unemployment and social security income are also typically exempt. States commonly place other exemptions on wages and bank account balances; for example, Ohio law protects $400 of the balance in your bank account from garnishment. If a creditor garnishes exempt funds, you may petition the court to get these funds back.

Bankruptcy

If you file bankruptcy, you can recover funds garnished within 90 days before a bankruptcy filing through an avoidance action. You or your attorney must file an adversary proceeding during the bankruptcy process, and your attorney must structure your exemptions to cover the garnished amounts. The attorney must also file a complaint to prevent preferential transfer. However, your ability to recover garnished funds through an avoidance action is not guaranteed.

Considerations

Avoiding a garnishment is a much less costly and time-consuming option than trying to get your money back after a judgment creditor takes funds from your wages or bank account. You probably can avoid judgment and a resulting garnishment order by contacting your creditor as soon as you determine you cannot afford your debt payments. Because filing a lawsuit and executing a garnishment order is costly for creditors, your creditor may offer a settlement, extended repayment plan or other solution to avoid these expenses.

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How to File for Unemployment Compensation in Covington, Newton County, Georgia

If you lose your job in Covington, Ga., you may be eligible for unemployment benefits from the state. The Georgia Department of Labor processes unemployment applications for the entire state of Georgia. When you are ready to file for unemployment compensation, the Georgia Department of Labor provides more than one method for doing so. You are free to choose any of the methods for filing for your unemployment benefits.

Instructions

1

File your unemployment claim online on the Georgia Department of Labor website. You can do this from anywhere, even if you are not currently in the state of Georgia.

2

Visit the Georgia Department of Labor Career Center in Covington to file your claim in person. The office is located in Covington at 7249 Industrial Boulevard N.E. The office is open Monday through Friday between 8 a.m. and 4:30 p.m.

3

Call the Georgia Department of Labor's unemployment claims phone number, which is called OLIVoR. If you are in Covington when you make the call, use 404-232-4290. If you are outside the metro Atlanta area, use 866-873-5676 to call toll-free.

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How to Transfer Credit on Etisalat

The Etisalat credit transfer service works on both prepaid and postpaid GSM and Wasel accounts in the United Arab Emirates. You do not need to register or sign up for the service, because it automatically works if you have an active Wasel or Ahlan mobile account. With the Etisalat credit transfer service, you can transfer a balance or credit from your account to anyone who has a Wasel account. Five AED is the minimum credit you can transfer, with 100 AED being the maximum. AED, or dirham, is the official currency of the United Arab Emirates.

Instructions

1

Power on your cell phone, if it is not already on.

2

Use the phone's keypad to type in an asterisk, the credit transfer code, an asterisk, the mobile number you are transferring to, an asterisk, the amount to transfer and the key. The credit transfer code is always 100. For example, if transferring 13 AED in credit, your mobile screen should look like: *100 * 050 456 7891 * 13

3

Look at your screen to confirm you have entered the correct mobile number and amount. Press "Send" to initiate the transfer.

4

Press "1" to confirm the transfer when the confirmation appears on your screen. If you need to cancel and start over, press "2" instead.

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How to Turn Debt into Equity

The most common forms of debt are home mortgages, auto loans, education loans and credit card debt. Equity is the monetary value of your asset, minus what you owe on it. It is the opposite of debt. Turning debt into equity is similar to saving money. Instead of depositing your money into the bank, you make payments to lenders, which increases your equity and decreases your debt. As your equity increases, your ownership of the asset increases. Any reduction you make in your debt will increase your equity in a particular asset.

Instructions

1

Turning the debt held against your home into equity is simple: Continue to pay the balance you owe on your mortgage. Unless you have an interest-only loan, each payment will be allocated to principal and interest by the lender. As you make payments, you reduce your debt and your equity increases. In the case of a home, the equity is also related to the real estate market. The amount of equity you have in your home is equal to the current market value of the home less the amount of debt you owe on the home. Review your current mortgage payment stub or statement to find out the principal you owe.

2

Arrange with your bank to make biweekly mortgage payments. Biweekly mortgage payments involve paying one half of your monthly payment every two weeks. In doing this, you reduce the amount of interest you pay on your mortgage; your last two payments of the year go directly to principal, increasing your equity. Use the biweekly mortgage calculator to find out how much interest you can save (see Resources).

3

Pay more on the balance you owe on your vehicle. This will increase the equity on your car, van, or truck. The blue book, or resale value, of the vehicle, less the debt you owe, represents the equity you have in your vehicle. In the case of a leased vehicle, there is no equity since you do not have ownership of it.

4

Pay down the debt you owe on education loans as quickly as possible. Paying off your student loans will enable you to pay down other debt, such as your home mortgage. Interest rates and repayment terms on education loans are designed with the student in mind. Take advantage of the low interest rates and long payoff periods and make payments slightly larger than what is required. This will enable you to pay off your loans more quickly and a reduce the interest you pay. Gather the documents relating to your education loans and use the student loan calculator (see Resources) to determine the savings available to you if you make slight modifications in your monthly payment amounts.

5

Increase payments on your credit cards. Making the minimum payment each month will not result in a payoff any time soon. If your credit card debt increases by a large amount in a short period of time, it will not be easy for you to find financing for a home or auto. That is why any reduction in credit card debt is an increase in your equity, even though there is no asset directly linked to credit card debt.

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Can I Pay My Past Due Bill Before Going to Court?

Any creditor can sue you if you refuse to pay. If the creditor wins the case, the judge can order you to pay off the full debt plus court fees. In some cases, the court may also order you to pay your creditor's attorney fees. This can leave you owing much more after the lawsuit than before. Thus, if you can afford to pay off your debt before going to court, it's a wise choice.

Avoiding Court

If you agree that you owe the debt and wish to avoid the stress of going to court, nothing prevents you from paying off your debt before the scheduled court date. Your creditor's goal is to collect the debt you owe. Thus, if you are willing to pay it, your creditor will accept it. Once you pay the debt, the creditor will dismiss the pending lawsuit against you. A creditor does not have to dismiss its lawsuit unless you pay your debt in full. By the time a creditor sues you, your opportunity to pay off the balance via a payment plan has already passed.

Payment Amount

While you can pay your past due bills before your court date, don't expect a break on the amount you owe. A creditor that wins a judgment through a lawsuit will force you to pay off the full balance, plus fees. Because your creditor can collect the full balance with its lawsuit, it often has no incentive to settle out of court for a lesser amount.

Your creditor does not want to risk losing its lawsuit. Thus, the company may negotiate with you and let you pay less than you owe if it sees that you plan to put up an aggressive defense in court.

Failure to Pay

If you cannot pay the debt in full by the court date and your creditor refuses to accept a partial payment, the lawsuit will proceed as scheduled. If the judge sides with your creditor, the resulting civil judgment carries considerable negative consequences for your future. State laws vary, but judgment creditors often have the right to force payment through wage garnishment and bank levies. Your creditor can also seize personal property that you own, such as jewelry and electronics, and place a lien against your home or motor vehicle.

Considerations

If you have a valid case for why you should not have to pay the debt, such as the account does not belong to you or the statute of limitations for collecting via a lawsuit in your state has passed, paying before the court date may not be necessary. Seek legal counsel to determine whether or not you are legally liable for the debt or have an affirmative court defense that will help you prevent a civil judgment and the consequences that come along with it.

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Explanation of Debit & Credit

For years, when it came to purchasing different items, you could choose cash, check or credit. In the early 1990s an alternative form of payment started to gain in popularity, the direct debit, which could be also be accomplished using a card. Together, credit and debit have revolutionized the retail world and created a great deal of convenience for consumers.

Identification

Although the terms debit and credit may sound like they are related, they are actually two very different concepts. A debit is a deduction taken out of an account holder's account and moved to different location. Merchants may do this through a check, debit card or electronic transfer. Credit generally refers to the ability to buy something by taking out a loan, such as with a credit card.

Credit Card History

The first credit cards were store-based cards mainly designed to increase customer loyalty for certain stores or brands. In 1946, the first bank card was issued, known as Charg-It. While plastic cards have become a standard, the first cards were made of cardboard. Revolving lines of credit began in 1959. The two major credit card associations were formed in 1966. Bank of America started the card that would eventually come to be known as Visa, and another group of banks came together to form what would come to be called MasterCard.

Debit Card History

Debit cards, while they take advantage of the some of the same technologies as credit cards, came onto the scene a couple of decades later. Though they were available in the 1980s, the format really began to gain popularity in the 1990s. As terminals that could read the cards grew and more banks began offering the option as a standard instead of an ATM card, the volume of sales grew. In 2009, debit cards outpaced credit card transactions, accounting for $1.63 trillion in sales.

How They Work

Debit cards and credit cards function very much the same way. The magnetic strip on the back of a card operates as a hard drive, where data such as the user's account and routing numbers are located. When that strip is read, or the number entered into the machine, the information is transferred onto the network, eventually leading to a debit from the user's account and a credit to the merchant's account.

Consumer Differences

The major difference for the consumer is in how payment is handled. Consumers using credit transactions have the purchase amount added to a balance, which must be paid back over time. Debit transactions, on the other hand, directly take the money out of a personal banking account, such as a checking account, or in some cases, a savings account.

Merchant Differences

The main difference for the merchant is the fee that is charged for a credit or debit card transaction. Banks may charge merchants as much as 3 percent for a credit card transaction but only half that amount for a debit card transaction since there is less risk to the merchant.

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Is the Debt Ratio Important to Lenders?

Whenever you apply for a loan -- whether it's a car loan, mortgage or credit card -- your lender wants to feel secure that you can and will repay the money on time. When lenders evaluate borrowers to determine whether they are a safe investment, part of their calculation involves the borrower's debt-to-income ratio.

Debt-To-Income Ratio

A debt-to-income ratio (DTI) is a basic measurement lenders use to determine how much money you are taking in and how much money you have going out. For example, if you earn $10,000 a month and pay $2,000 per month to pay debts, you have a 20 percent debt-to-income ratio. A high DTI means you have a lot of debt and are at risk for financial difficulty. A low DTI means the opposite and shows you are a safer investment.

Front-End Ratio

A front-end DTI represents your housing payments, plus any related expenses, such as homeowner's insurance and property taxes. For example, if you earn $5,000 per month in gross income and pay $1,500 per month in mortgage, plus another $300 in insurance and taxes, you have a front-end DTI of $1,800 divided by $5,000, or 36 percent. Lenders typically prefer a front-end DTI of about 30 percent or lower, according to Truthful Lending.

Back-End Ratio

A back-end DTI represents the total amount of debt obligations you currently have, including your housing obligations. For example, if you make $5,000 per month, pay $1,800 for your housing needs plus another $700 for other loans, such as your car payment and credit cards, you have a total debt obligation of $2,500, and a back-end DTI of 50 percent. Lenders generally prefer you to have back-end DTI of 40 percent or less, according to Truthful Lending.

Other Factors

While knowing your DTI is important, especially when you are considering applying for a mortgage or determining how much you can spend on rent, it's not the only factor lenders use. Lenders also want to know how well you've handled credit obligations in the past, and they look at your credit score to determine this. Also, each lender sets its own standards for what it considers an acceptable DTI and credit score, so even if one lender refuses you, that doesn't mean all lenders will.

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What Happens if They Garnish Your Checks for a Student Loan?

Student loan garnishments deduct a smaller amount of money from a worker's wages than garnishments to recoup payments for back taxes or child support. People who have delinquent student loans receive advance notice of a garnishment order, as do all others who face garnishment. Therefore, they should take advantage of the opportunity to prevent a garnishment by responding to the notice.

Higher Education Act

The Higher Education Act allows the U.S. Department of Education to garnish 15 percent of a borrower's wages to repay a delinquent student loan. The department can require an employer to deduct that percentage from the borrower's wages each pay period until the borrower pays off the loan. Nonetheless, the department notes in its information on recouping overdue loans that wage garnishment is only used against borrowers who refuse to voluntarily repay their delinquent student loans.

Process

The Department of Education notifies borrower's 30 days before ordering a wage garnishment. Some types of wage garnishments require a court order, but that's not the case with a student loan. The garnishment notice that a borrower receives from the department shows the amount of the debt. It also offers the borrower the chance to review documents the department has that relate to the debt. Borrowers can make copies of those documents for their records, which may be particularly important for people who want to dispute a debt.

Disputing Garnishments

You can request a hearing with the Department of Education to object to a garnishment if you disagree with the amount the department claims you owe. Borrowers who feel they can't afford to lose 15 percent of their wages in a garnishment can request a hearing as well. Borrowers must demonstrate at a hearing that a garnishment would cause them serious financial harm. They can present bills and other documents that show they would be unable to pay for rent, food or other necessities. Nonetheless, it's up to the department to decide if a borrower is unable to afford a garnishment.

Other Terms

People who receive a student loan garnishment notice can avoid the garnishment by making a payment agreement with the Department of Education, but the department decides the terms of the agreement. Employers can't fire borrowers who have their wages garnished to repay a student loan, and companies can't refuse to employ someone due to a garnishment. No information about the borrower's financial situation is part of the garnishment order that an employer receives beyond what's necessary to begin the garnishment, according to the department.

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Does Getting Denied Credit Increase or Hurt Your Credit?

Being denied credit, such as an increased limit on a credit card, a car loan or a store credit line, can be disconcerting. A credit denial doesn't devastate your credit, though. The denial doesn't show up on your credit report at all, but the credit inquiry does. Too many credit inquiries can have a negative effect on your credit report and score.

Credit Inquiries

When you apply for credit, it generates an inquiry on your credit report. Multiple inquiries in a short period for multiple types of credit can lower your credit score, whether you're denied or approved for the new credit. If you are shopping for a loan, though, such as a mortgage or car loan, and you have multiple inquiries because of shopping for a rate, it doesn't have a negative effect on your credit. The credit scoring system doesn't count multiple inquiries for the same type of credit within a 30-day period.

Credit Report

Any time you're denied credit, you're entitled to a free copy of your credit report from the company that provided the information leading to your denial. Your credit report details accounts you've applied for, accounts that you have open and accounts that you've closed, along with delinquencies. You are also entitled to one free credit report each year, regardless of whether you've applied for credit. You can obtain your free credit report from the Annual Credit Report website. If there are any mistakes, write to the reporting company and let it know. Correcting mistakes on your credit report increases your credit score and improves your chances of being approved for new credit and credit line increases.

Credit Score

Your credit score isn't included in your credit report. You can obtain it through any of the three main credit reporting agencies (TransUnion, Equifax, Experion) or through the Free Isaac Corporation, which is the company that actually compiles credit scores. Your credit score isn't free, but it is worth paying to obtain a clearer sense of your creditworthiness. If you're denied credit, it doesn't inherently lower your credit score. Multiple inquiries will lower your credit score, as will late payments and having high balances on your credit cards.

Increasing Your Credit

Increasing your credit score takes time. You have to have a sustained period of on-time payments on all of your bills, loans and credit cards. You have to pay down credit cards so you're not carrying high balances as compared to your credit lines. Apply for new credit only if you absolutely need it.

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Does Debt Relief or Credit Counseling Hurt Your Credit Rating?

Debt relief and credit counseling are strategies you can use to lower your interest rates and make your debt payments affordable, which can help you get out of debt more quickly. These strategies can also end creditor calls and letters, reducing stress and interruptions throughout your day. In some cases, opting for debt relief or credit counseling can negatively affect your credit score.

Reporting by Debt Counselors

Most debt counselors do not report credit counseling to the credit bureaus. Even if your credit counseling company does report your counseling agreement to the credit bureaus, the current FICO scoring algorithm does not factor in information related to credit counseling. This means that signing up with a credit counseling service will not, in and of itself, lower your credit score.

Reports by Creditors

Although a credit report entry initiated by a debt relief or credit counseling agency will not affect your credit score, your lenders may opt to provide information related to your credit counseling agreement. Your agreement with a debt relief or credit counseling company may include a reduction of payment amounts or interest rates, which may prompt the creditors to report you as "not paying as agreed." Credit reporting and scoring agencies interpret these entries as derogatory items, which may reduce your credit score.

Impact of Creditor Reporting

The impact of reports initiated by creditors regarding participation in a credit counseling or debt relief plan depends on the information already contained in your credit file. Entering into a credit counseling agreement will likely have a more significant impact on your score if all of your debt payments are current than if you have recently missed payments. The exact credit score impact also depends on other factors that determine your score, such as the length of your credit history, the types of debt you carry and the amounts of your debt balances.

Considerations

If you are behind on your debt payments, and are using debt relief or credit counseling to help you eliminate your debt, the impact of entering into a credit counseling agreement will have a less significant long-term impact than continuing to miss debt payments. Likewise, if all of your payments are current, but you anticipate having problems meeting your debt obligations in the near future, entering into a credit counseling or debt relief agreement is a less damaging alternative than ignoring your impending financial problems.

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How to Call a Bank & Ask Them to Accept a Credit Card Debt Forgiveness

A settlement is when you and the bank mutually agree to let you pay less than the outstanding balance. Many banks are accepting settlements on credit cards because of the state of the economy. They reason that it is better to get something than nothing. If you want a settlement you must meet certain requirements. Your account needs to be at least 90 days past due. When you settle a debt your credit can be damaged. If you need to call a bank to ask for a settlement there is a way to go about it.

Instructions

1

Call the bank using the toll free number on the back of your credit card or your monthly statement. Ask for the collection department. The representative will transfer you to the collection department. If you are asking for a settlement you are probably experiencing financial difficulty. Explain your situation to the bank and inform them you would like to settle your debt. The representative will review your account.

2

Determine the amount you would like to settle for. According to MSN Money Central, banks and credit card companies usually accept settlements in the range of 20 to 75 percent of your outstanding balance. The amount that you can settle for will depend on the financial institution. Start as low as 25 percent of your balance. If you have a credit card balance of $2,500 you would have to pay $625, if they accept your settlement offer.

3

Make a counter offer. If the bank accepts your offer you are in good shape. However they may make a counter offer which is a higher percentage. Negotiate until you reach a mutually agreed upon settlement. Depending on the situation you may have some leverage because banks don't want to force you into bankruptcy by refusing your offer.

4

Gather the funds needed to settle. When you reach a settlement amount you will need the entire amount of money in a lump sum, in some cases. Some banks do offer settlements, depending on the amount, which are broken up into three large payments. A possibility also exists for you to make monthly payments on a settled debt. No matter how you settle the arrangements should be comfortable for you.

5

Get payment information. Find out from the bank where the money should be sent. Usually a payment address is on your monthly statement but it's always good to confirm the information. It's a good idea to get written confirmation of the settlement offer before you send money. This is your proof that you have a settlement arrangement with the bank. If there is a dispute later on you can provide your written proof to defuse any disputes or disagreements that may occur.

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Can They Garnish Wages if I Just Started to Work for a New Company?

When you miss a payment on a debt, your creditor will likely attempt to help you bring your account current by contacting you by phone or mail. However, if you continue to miss payments, your creditor may use more aggressive collection strategies. In most states, this can include garnishment of your wages. If your state permits wage garnishment, the creditor may take a portion of your earnings even if you have just started a new job.

Statute of Limitations

Your state's statute of limitations stipulates the time frame during which a creditor may pursue collection efforts, including wage garnishment, after obtaining a legal judgment against you for your debt. The statute of limitations varies by state -- for example, Georgia allows wage garnishment for seven years after the date of judgment, while Massachusetts permits wage garnishment for up to 20 years. This means that even if you were unemployed when the creditor obtained a judgment, the creditor may seek garnishment if you start a job within the statute of limitations.

Finding Your Employer

You may think that if you change jobs or start working after a civil judgment for a debt the judgment creditor will not find out about your new employer. However, most states permit a judgment creditor to question you about your income and assets at any time within the statute of limitations for your judgment. Depending on your state's laws, you may have to answer written interrogatories or attend a debtor's examination hearing to disclose financial information, including the identity of your new employer. If you do not answer or attend the hearing, the court will typically hold you in contempt, which can result in fines or imprisonment.

Garnishment Order

After finding out about your new job, the judgment creditor can apply to the court that awarded the judgment for a writ of garnishment, which authorizes the creditor to seek recovery of the judgment debt by taking a portion of your earnings. The creditor or court will then order your new employer to withhold the nonexempt portion of your earnings and send them to the court or creditor to apply toward your debt. Once your employer has been served with a garnishment order, garnishment will continue until the debt is paid, you leave your job or the statute of limitations expires.

Garnishment Limitations

Most states' garnishment laws mirror federal law, which protects at least 75 percent of your earnings from garnishment for judgment debts other than child support or taxes. Federal law provides a complete exemption if you earn less in a week than 30 times the hourly federal minimum wage. Some states also provide exemptions higher than federal law -- for example, South Carolina, Texas, Pennsylvania and North Carolina exempt all of your wages from garnishment for most private debts.

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How to Define Unsecured Debt

To best define unsecured debt, consider the opposite -- secured debt. A secured debt is a loan guaranteed with an asset or collateral. The lender places a lien against your asset, giving him the right to take it if you don't pay the debt. Unsecured debt is a loan given without the benefit of collateral or security for the lender.

Secured Debt

Examples of secured debt include your mortgage, for which your home is the collateral, and your car loan, secured by your vehicle. If you should declare bankruptcy, the lender can repossess your vehicle or foreclose on your home. The lender can then recover monies owed by selling either asset at auction or hold the property until you reconcile the debt.

Unsecured Debt

Most credit cards are examples of unsecured debt, as well as money owed to doctors, hospitals and student loans. The lender in these cases has few options for collecting outstanding debt if you fail to pay. In the event of a bankruptcy, the court pays your secured creditors first from proceeds obtained through the sale of your assets. Unsecured creditors will have claim to any remaining amount.

Significance

Since secured debt presents less of a risk for the lender, the interest rate for a secured loan is usually much lower. The lender knows she can sell the property to recoup the money loaned. The only thing backing an unsecured loan is your credit-worthiness, your income, and your promise to repay, which means a much higher interest rate, especially if you have a low credit rating.

Priorities

If you are struggling to pay off your debts, it is best to pay your secured debts first. Failure to pay unsecured debts is unlikely to result in the loss of your home, vehicle or other substantial assets. If you fail to pay secured debt, the lender may pursue litigation in court to obtain a money judgment against you.

Consolidation

A viable alternative for lowering high interest rates and monthly payments on unsecured loans is debt consolidation. The easiest way to consolidate unsecured debt may be through a refinance of your current mortgage or attainment of a second mortgage or home equity line of credit. Typically, you will have a much lower interest rate on these types of loans, and you can enjoy some tax benefits not available with most unsecured credit.

Bankruptcy

Filing for personal bankruptcy is the choice of last resort for reconciling your unsecured debts. A bankruptcy can significantly lower your credit rating and remains on your credit report for seven to 10 years. Whether you file for Chapter 7 or Chapter 13 bankruptcy, either can discharge unsecured debts, stop repossessions or foreclosures, prevent wage garnishment and provide exemptions, which may allow you to keep certain assets.

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How to Get a Garnishment Removed

Wage garnishment is a legal process that allows a creditor, a former employer, business, individual or government agency to receive payment through a third party---known as the garnishee---after a judgment has been obtained. In many instances, wage garnishment is the result of unpaid taxes, court-ordered payments such as for child support, or nonpayment of a judgment in favor of a creditor.

To get a garnishment removed, you can apply for an Offer In Compromise, file a Slow-Pay Motion, work out a payment arrangement, or file for bankruptcy.

Instructions

1

Apply for an Offer In Compromise. The Internal Revenue Service allows taxpayers who are in arrears to apply for an Offer In Compromise. A taxpayer must fall under one of three categories: exceptional circumstances, such as caring for a child with a serious illness; inability to pay within the statutory time frame (simply meaning the taxpayer does not have the assets or resources to actually pay), and "liability doubt," which states that there is sufficient doubt as to the legitimacy of the amount owed.

Taxpayers must file Form 656 and pay an application fee of $150 for an Offer In Compromise.

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File Slow-Pay Motion. In some jurisdictions, a person being subjected to wage garnishment can file a Slow-Pay Motion with the county clerk's office. This motion must be filed prior to the granting and/or implementation of the garnishment. A Slow-Pay Motion is an alternative to wage garnishment asking a judge to let you make small payments instead of being subjected to wage garnishment.

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Enter into a payment arrangement with the creditor. If you are informed that wage garnishment is imminent, attempt to make a payment arrangement agreement that will allow you to repay the judgment. In most cases, a creditor will even settle for a smaller amount if it can be paid in one lump sum.

4

File for bankruptcy protection. If your wages are being garnished and you are in danger of losing your home or having a vehicle repossessed, you might consider filing for federal bankruptcy protection. You should consult a bankruptcy attorney for advice on the process and your options. In the event that you do file for bankruptcy, most wage garnishments are removed, but federal tax liabilities may remain.

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How to Get Free Credit Scores

How to get free credit scores! You have probably seen the commercials "Free Credit Report Dot Com" with the guys singing the catchy little tune. What they do not tell you is after the first month they will start to charge you. If you are looking for your once a year free credit scores, this is how to get them. I will also include some tips on improving your score.

Instructions

1

Before you head to the website to get your free credit scores, be advised they will ask questions about family members, or people whom you are associated with or have been, sometimes they will even ask questions and you will not know any of the people or businesses listed, answer honestly "I am not familiar with any of these" etc. You might want to think about previous addresses you have lived at, get the address, and zip codes, as they use these questions along with your social security number to verify you are who you say you are.

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Now that you know what sort of questions they will be asking, and you are prepared, head on over to http://www.annualcreditreport.com/ to get your free credit scores. You will want to select all 3 credit bureaus (Equifax, Transunion, and Experian). They will have options that you can purchase, unless you really think you need them, do not choose any options, you are looking to get free creit scores. Just follow the step by step directions, that's all there is to it, you now have your free credit scores.

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Here are some tips on how to improve your credit scores.
1. Report any wrong information on your credit report immediately to the reporting credit bureau.
2. Set up your bank online so you can pay bills quickly and easily
3. Pay your bills on time each month, use a spreadsheet to keep track of due dates and due amounts, then each month as you pay the bills put the amount paid under the month it was paid. That way you know what bills you have paid and have not paid for that month, and know the due date you need to have it paid.
4. Top priority over high interest credit cards is paying down cards that have a balance higher than 50% of max allowed. So if you have a $300 dollar card that has a $200 dollar balance, get that below $150 dollars as fast as possible. Credit accounts that have higher than 50% of allowed credit used have a negative impact on your credit score. You might pay a little more in interest on higher interest cards over some time, however negative credit scores can impact many other things that effect how much you pay, like car insurance.
5. Once you have balances below the 50% threshold, you will want to take out the highest interest rate with the smallest balance. This will help give you the sense of accomplishment, and allow you to then put those funds to use on the next biggest balance.
6. If balances are paid, and you are trying to build your credit score and history, use your cards, just pay them off monthly, best yet is just pay the balance as soon as it shows up on the account.

Remember there is no magic bullet to give you an instant excellent credit score, nor one to remove bad credit. Obtaining a good to excellent credit score takes time, 2 to 3 years if there is nothing negative showing on your current report. If you have negative items on your report it will take longer and more effort on your part. That being said, you can dig out and go from a bad score to good/excellent in 3 to 5 years, I know because I did. Hope this helps, and always remember your personal credit scores are nothing to joke about, they effect you in so many ways.

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US Government Advice on Debt Relief

Debt problems can arise for a number of reasons. Sometimes you accumulate more debt than intended or unexpected events, such as job loss or a death in the family occur. Regardless of why you're having debt problems now, there are several steps you can take to start getting relief.

Create a Budget

To fully determine the health of your personal finances, you need to compare how much money you earn against how much you spend. The U.S. government suggests creating a personal household budget and tracking everything you spend money on each month, including small and insignificant purchases. By seeing exactly where you're spending money, you can make adjustments in your personal budget as needed and put more funds towards paying debts down.

Contact Creditors

If you're not able to make full payments on your debts by the scheduled due date, the government advises you to call each of your creditors and explain the situation to them. Tell each creditor why you're having problems making your payments, and try to get a new payment plan agreement that includes lower monthly bills that you can more easily afford.

Get Financial Counseling

If you have problems creating or sticking to a budget, or your attempts to work out payment plans with your creditors have been unsuccessful, you may find credit and debt counseling services useful. Many financial counseling services provide financial educational materials and help you create a personal budget that works for your lifestyle. Some companies also offer debt negotiation and debt management plans to help ensure you pay the bills on time each month.

Use Caution

The United States Federal Trade Commission strongly advises you to use caution when choosing financial counseling services to work with. Many companies are non-profit organizations, but that doesn't mean they will not charge you a fee for their services. Some companies claim to be non-profit when they aren't however, and others offer financial services that may damage your credit far into the future.

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How to Pay Off Student Loans Early

If you have recently graduated from college or professional school, your debts may look like a dark cloud over your future. You could have government loans or private student loans. You could have put tuition and books on credit cards and borrowed to buy a car. Now that you have finished school, you probably want more of the luxuries of adult life -- a new home or condo and nice vacations. But as long as you have huge debts, many of these will remain out of reach. Don't despair. You can find a way to pay off your student loans early.

Instructions

1

Make a list of all the debts you owe, as Ric Edelman, author of "The Truth About Money," recommends. Write the lender, the amount, the interest rate, and the minimum payment. Total up the debts and the minimum payments. To get out of debt faster, you will need to pay more than the minimum on one debt at a time.

2

Budget for a surplus to retire your debts. Don't upgrade your lifestyle too much even if you have a full-time job. Remember, you have only your net income, not the gross, for both living expenses and debt repayment. Earmark at least several hundred dollars a month for debt repayment, depending on the size of your debt. If you are married, work with your spouse to create a plan that allows you to pay more than the total minimum every month.

3

Pay cash for your purchases. Don't run up more debts, or you will only be digging yourself in deeper. In "Making the Most of Your Money Now", Jane Bryant Quinn writes that this rule is crucial to debt reduction.

4

Transfer loans to save on interest. According to Quinn, if you can transfer credit card balances to a new card with a lower rate, you should. Find new cards with low rates, or call the banks and ask for better rates.

5

Consolidate your government loans for convenience and interest-rate protection. Quinn suggests that if you consolidate, you choose the fastest repayment plan in order to force yourself to repay quickly. You won't incur a penalty for paying still faster, she says. According to Federal Direct Consolidation Loans, you can also convert variable interest rate loans to fixed-rate loans, protecting yourself from possible interest rate increases.

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Put your extra money towards your highest rate debt until it is paid off, as Jane Bryant Quinn recommends. Your highest rate debt is probably credit card debt. Continue making the minimum payments on your other debt.

7

Work off your government loans. If you join AmeriCorps or Teach for America, you can receive money to help pay off your loans, according to Kiplinger's article "How to Pay Off Student Loans." You can also have your debt forgiven by teaching in a low-income area, according to Kiplinger's.

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Have the freedom to pursue your dreams.

Put your extra money on the highest rate loan remaining once your credit cards are paid off. If you get pay increases, bonuses or overtime, put that money toward debt payoff. Just make sure no prepayment penalty exists for any loans you pay early. Continue until you have paid off all your loans. Then you will have the financial freedom to pursue your other dreams.

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How to File a Judgment Lien

One debt collection method available to judgment creditors is lien recovery. After you win a lawsuit against a debtor and become a judgment creditor, you earn the right to place a lien against the debtor's real estate or personal property. Your lien encumbers a home's title -- preventing the debtor from being able to sell or refinance his property without first paying off the judgment and having the lien released. Judgment liens are advantageous to creditors because liens are less likely than aggressive recovery measures, such as garnishment, to push a debtor into bankruptcy.

Instructions

1

Visit the county court that originally awarded you the judgment. Request two certified copies of the judgment and pay the fee which varies by state. Some states, such as California, refer to a certified copy of a judgment as an "Abstract of Judgment".

2

File one certified copy of the judgment with the Land Records Office in the county in which the debtor owns real estate. Once your judgment appears on file, your lien automatically attaches to all real estate the debtor owns within that county.

3

Request a Notice of Judgment lien from your county court or, if available, download the appropriate county forms online. Fill out the forms.

4

Attach a certified copy of the judgment to the Notice of Judgment lien. Mail the completed form and documentation of your judgment to your Secretary of State's office. This creates a lien against the debtor's non-exempt personal property, giving you the right to seize it in lieu of payment.

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