Welcome to our website credit and debt managementr.

New offers options to American consumers who need an effective debt reduction plan. We have settled over 150 million dollars worth of unsecured, credit card debt while saving clients thousands of dollars. AmeriGuard believes it is important to make an informed decision especially when it affects your financial health. Understanding your options can be overwhelming; that’s why we offer experienced, knowledgeable guidance along the way. provides the information you need to participate in creating a better future..

Friday, September 30, 2005

How to Calculate How Long it Takes to Pay Off a Credit Card

If you have a balance on a credit card, you may wonder how long it will take to pay it off and be debt free. You can easily find out how long it will take to pay off the balance and can calculate this in a few ways. When doing your calculations, you can find out how long it will take to pay off your debt based on paying the minimum monthly payment or by paying more.



    Go to BankRate.com and use its credit card debt calculator. Refer to your credit card statement to enter the balance, interest rate and monthly payment into the designated fields. Click "Calculate" to see how long it will take to pay off the credit card at the current monthly payment.


    Enter the number of months you want to pay your debt off in to see how much you will need to pay each month to get your card paid off.


    Open Microsoft Excel as another method of calculating debt repayment. Type "=" in anywhere on the spreadsheet. Above Column A you will see the function box. Click "NPER"; if you don't see "NPER" on the list, click "More Functions" and scroll until you find "NPER."


    Enter your annual credit card rate in the "Rate" box. Divide the rate by 365 to get the daily rate and multiple that number by 30 for the monthly rate. For example, if your annual rate is 7.9 percent, enter it as "(7.9%/365)*30." Under "Pmt" enter your monthly payment. In the "Pv" box enter your credit card balance as a negative number. Enter "0" under "Fv" since you want to pay off the balance. Click "OK" and the number on the spreadsheet will be the number of months it will take you to pay off your debt.

Laws & Limitations for Credit Collection in California

No matter how far behind you are on paying your debts, your creditors have to play by the rules. Federal and state laws limit the tactics creditors and debt collectors can use to collect from you. If you life in California, you're protected under the state's Fair Debt Collection Practices Act. The law applies primarily to collection agencies, not to creditors who attempt to collect the debts themselves.


    Bill collectors can only contact you between 8 a.m. and 9 p.m.; if those hours are inconvenient, you can request different times. There's no limit to the number of calls a collection agency can make, but making multiple calls in a short time to harass you is illegal. A collector must use his real name and the agency's name when he contacts you; the state law specifically forbids saying or doing anything that implies he represents the government or law enforcement.


    A creditor -- with the exception of a health spa -- doesn't have to notify you that it's turning over your account to a collection agency. Once the agency contacts you, it must notify you within five days of the amount you owe, the name of the creditor and the process for challenging the bill if you disagree about the debt. If you do not wish to talk further, you can tell the agency not to contact you again, though the law allows the agency a final call to explain what actions it will take next.


    California and federal law prevent collection agencies from harassing you into paying. This includes calling outside the prescribed hours, using obscene or profane language or threatening violence. A collection agency can't lie about what it intends to do, or state that it will do something the law doesn't allow, such as put you in jail if that's not a penalty in your case. The company can't publicize your debts, and it can't threaten to report your debt to a credit bureau if it's not really planning to do so.


    Refusing to communicate with a debt collector can be a mistake, the California Attorney General states: The collector may feel she has no recourse but to sue. If you make a request, such as asking the agency not to call, do it in writing and keep a copy. If you disagree with the amount you're asked to pay, present the agency with copies of records that prove your position. If the agency charges interest or fees, it must be authorized by the original debt agreement, and you're entitled to a written explanation. California law states that a creditor cannot sue to seek repayment of a debt four years after the default if you have a written agreement, two years if it was oral.

Thursday, September 29, 2005

How Soon Can I Get a Mortgage Loan After I Paid All Debt in a Credit Bureau Report?

Getting your credit cleaned up and old debts paid is an important step in getting approved for a mortgage. However, just paying off debt won't get you the mortgage you want: You'll still have to prove to your lender that you can manage your finances, and this takes time. Maintain a good credit history for a few years and finding a mortgage at a decent interest rate will become a lot easier.

Mortgage Lending

    Each mortgage lender has its own criteria for qualifying someone for a home loan and may offer several different types of loans depending on your financial situation and credit worthiness. Some lenders will work with you even if you have a recent history of credit problems, though there are often strings attached to this kind of mortgage, including a high down payment, fees and interest rates. If you are offered this type of mortgage, ask the lender about what it would take to get you a better deal. If the lender tells you that they need to see a longer history of on-time payments, you can often save a great deal of money by waiting a year and then reapplying for your loan.

Debt Reduction

    Lenders don't like to see a lot of debt on credit reports, whether it is "good" debt for which regular payments are made, or "bad" debt with late payments or a default. Paying off any debt can help your credit score and put mortgage lenders at ease. However, just paying off debt won't automatically qualify you for a mortgage, as your lender is going to pay attention to your payment history and overall credit limits along with the total amount of your debt.

Credit Reporting

    Your credit report contains a lot of information about your finances and use of credit. Some people mistakenly believe that if they pay off a debt, all records of the debt disappear from their credit report. However, federal law allows credit bureaus to keep negative information for at least seven years. If you ask for a loan of over $150,000 (such as a mortgage) a credit bureau does not have to suppress any portion of your credit history. This means that very old debts, even those that don't appear on your "regular" credit reports, may be visible to a mortgage lender.

Improving Your Credit Score

    To improve your credit score, along with your chance at getting a good mortgage, continue to practice good financial habits. While paying off all your debt is a responsible thing to do, you also need to show creditors that you can manage access to credit. Use your credit cards each month to make a few purchases, keeping the balance on your card very low, then paying it off each month. If you can keep up a history of low debt and regular payments, your credit score will get better, qualifying you for a home loan.

Can Credit Cards Seize Your Joint Bank Account?

When you accumulate a large amount of credit card debt, it can be very difficult to keep up with the interest payments, let alone pay off the balances you owe. Many consumers find themselves in a situation where credit card default is the only answer. When this happens, the credit card company could potentially try to take money out of a joint bank account that your name is on.

Collection Process

    When you owe money to a credit card company, the company will begin the collections process by making extra phone calls and sending extra statements. The company could handle this internally or it could turn your account over to a collection agency. The collection agency or collections department of the credit card company will continue to try to collect the balance from you for some time. If you still do not pay the credit card bill, the company will take further action to collect.

Levying Bank Account

    The credit card company will then file a lawsuit against you in civil court. Unless you can prove that you did not incur the debt, the court will award a judgment in the credit card company's favor. The credit card company can then use this judgment to levy your bank account, which means it can take money out of your account. The credit card company then has the right to take any amount out of the account.

Joint Bank Accounts

    If you have a joint bank account with another individual, the money in the account could be susceptible to levy by your creditors. Even though the name of another person is on the account, creditors can still take money out of the account as long as you are on it. It does not matter if the other person on the account put all of the money into it. Creditors can still take the money regardless of who earned it.

Protecting the Money

    If you are in the middle of a legal battle with a credit card company about debt, you may want to notify the other person that has a joint account with you. This way, the other person could make arrangements to take the money out of the account and put it in an individual account without your name on it. This way, you will at least avoid hurting your friend or family member financially.

Wednesday, September 28, 2005

How to Freeze a Credit Card in a Block of Ice

How to Freeze a Credit Card in a Block of Ice

If you have credit cards, you may have a hard time reining in your spending. By making your credit cards harder to access, you may be able to curb your spending and even lower your amount of debt. If keeping your credit cards in your wallet is too tempting, you can try freezing them in a block of ice in your home freezer. This way you have to wait for the block of ice to thaw before you can make a charge on the credit card. By the time that happens, your urge to spend may have left you.



    Get a large bowl or bucket that is safe to be used in a freezer. Choose the largest bowl you can as it will take it longer to thaw out than a shallow bowl.


    Fill the bowl, or bucket, almost completely with water. Leave a couple of inches at the top to allow room for the water to expand when it freezes.


    Wrap your credit card in some colored plastic wrap, or even a piece of a black trash bag. Secure it with rubber bands. The purpose of the colored plastic is to prevent you from being able to see through the ice to read the credit card number.


    Drop your credit card into the bowl of water. It will sink down to the bottom. Put the bowl into the freezer. It will take it a few hours to freeze. Leave the frozen credit card in your freezer indefinitely.

How to Put a Mechanic's Lien on a House

How to Put a Mechanic's Lien on a House

Originally created for auto repair professionals, mechanic's liens have taken on a much stronger presence with real estate. Contractors, subcontractors, and suppliers can use this legal tool to help collect monies owed for work performed. Mechanic's liens help secure outstanding payments. Learning how to file this lien can help contractors and suppliers collect their payments due.



    Examine all paperwork relating to the project to be completed. Be sure that it qualifies as a valid event under the state statute. Be aware that all states have their own mechanic's lien laws. While they are similar, components such as when to notify, when to file, how to file and which court is involved can vary widely. Learn the specific state laws that apply to the project.


    Prepare a "preliminary notice", applicable in some states, advising the property owner that the work is eligible as the subject of a mechanic's lien. Some contractors and suppliers consider sending these notices even in jurisdictions that have no requirement. This notifies the property owner that even if subcontractors and suppliers (who have no contractual relationship to the property owner) are unpaid, mechanic's liens can be filed.


    Prepare and file notices of the "commencement of work," which are required in some states. These are filed as public records notifying the that work will proceed as of the specified date. This creates a legal paper trail that the contractor or supplier can use should the need arise in a mechanic's lien action.


    Prepare and file required notices of the intent to file a mechanic's lien if work goes unpaid. Be sure to file these documents in the proper offices, as they are also public records and lead to corresponding notices sent to property owners advising them that there are monies owed for completed work. This can be helpful to subcontractors and suppliers, as the property owner may have paid the general contractor, who has not paid the subcontractors or material suppliers yet.


    File the notice of lien in the proper venue (such as the city hall or county seat). This can be confusing. States have different timing rules. Some jurisdictions specify a restricted time period from the completion of the work or installation of the materials, while others mandate that mechanic's liens cannot be filed until all construction work is completed. While four to six months is the most common time frame, closely check the state regulations to file the lien notice properly.


    Follow up to be sure the mechanic's lien is recorded against the property. Mistakes can be made in recording offices. Keep close watch on all paperwork and written evidence of work performed and/or supplies used. These will be necessary should foreclosure action be necessary to enforce the lien. After filing and recording, the contractor or supplier will have a valid lien on the title to the property, making it very difficult, if not impossible for the owner to sell or otherwise transfer title to the real estate without paying all monies due.

Tuesday, September 27, 2005

Effective Credit Management

Effective Credit Management

Having credit can sound like a financial pitfall to some consumers. But with effective credit management procedures, you can establish a positive credit history and put yourself in a position to qualify for that mortgage or car loan. Good credit management takes planning and determination, but the results can be worth the hard work.

Debt Ratio

    One of the questions that consumers often ask is how much credit they should take on at any time. The Motley Fool financial website (see Resources) offers a way of calculating your debt ratio. For example, if you have $10,000 in debt and an annual income of $40,000, then divide your debt into your income to come up with a debt ratio of 25 percent. The Motley Fool website recommends having an income to debt ratio no higher than 15 percent in order to be able to manage your credit.


    When you start taking on credit debt, you need to keep track of how much overall debt you are accumulating to avoid getting into a situation where your debt is overwhelming your monthly income. Develop a personal budget that lists all of your obligations against your income. Put at least 10 percent of your income into a savings account each month, and remember to account for your monthly expenses such as gas and food. Tracking your money each month in a budget will allow you to see how much cash you have available and prevent you from taking out more credit than you can afford.

Credit Reports

    Stay informed on changes in the credit industry that can benefit you and strengthen your credit report. For example, as of 2011, the Experian credit bureau allows renters to have their good renting history be part of their credit report. This is an excellent way for you to enhance your credit score if you rent your home without having to take on the additional costs of another credit card. Monitor the news and the credit reporting bureau websites to find new ways of bolstering your credit report without taking on new credit.

Plan Your Spending

    Having and using a credit card will help improve your credit as long as you make your monthly payments on time and do not spend to the maximum limit on each card. Only use 30 percent or less of the available limit on each credit account you have, and budget enough money each month to pay more than your monthly minimums. Paying your minimum payments on time and in full is good for your credit, but paying more than your minimums helps you reduce your interest debt and also boosts your credit score even more.

Monday, September 26, 2005

Comparison of Cash Flow Statements & Net Cash Flow Statements

A company's cash flow statement tells the rest of the world whether the business in awash in money or scraping by in near-insolvency. Accounting managers prepare liquidity reports in accordance with United States Securities and Exchange Commission guidelines and generally accepted accounting principles. These edicts require that managers publish cash flow statements at the end of a period, such as a quarter or fiscal year.


    A cash flow statement is an accounting summary detailing the tactics and initiatives corporate leadership uses to generate sales, help the business make more money and stay ahead of the competitive pack. The idea is to show, initiative by initiative, how the company is wielding its commercial influence to attract more customers and outflank rivals. There's no such thing as a net cash flow statement. The closer concept is net cash, but it's distinct from net cash flow statement or cash flow statement. Financial commentators use the terms "statement of cash flows," "liquidity report" and "cash flow statement" interchangeably.

Operating Cash Flows

    Operating cash flows describe the strategies a business relies on to expand operations, indicating why the company is intensifying its marketing efforts or shedding costs in moribund segments. These liquidity movements also indicate whether top leadership's credit-risk memoranda are effectively helping the business reduce bad debt. This represents money the company may not recover from clients because of defaults. Operating cash flows include remittances to vendors and service providers as well as receipts from clients.

Investing Cash Flows

    An organization invests in long-term activities to win the economic competition and set itself up for future success. Investing cash flows show how management is relentlessly building up the company's asset base, demonstrating how long department heads intend to use specific assets to improve efficiency and productivity. If a company, for example, buys equipment with a 10-year useful life, this might indicate that segment chiefs believe the asset would be instrumental to the company's success in the next decade. Investing cash flows include purchases and sales of long-term assets, such as real property, equipment and production machinery.

Financing Cash Flows

    Financing operations enable a company to cope with specific monetary problems. These may come from increased customer attrition, reduction in revenues and growing competition. Financing cash flows deal with anything the business does to raise money and fund its operations, especially when it comes to financing strategically relevant long-term expansion initiatives.

Net Cash Balance

    At the bottom of a statement of cash flows, accountants calculate net cash flows. This sums up the total net cash of all three sections in the liquidity report.

Where Can I Get an Online Credit Report?

It is important for consumers to maintain a good credit record by checking the accuracy of their credit reports regularly. The three major credit reporting agencies offer consumers a convenient way to check their reports online.


    As one of the major credit reporting agencies, TransUnion offers consumers a 3-in-1 report that includes information from the three credit bureaus, debt analysis and score information through its website at transunion.com.


    Equifax.com offers online access to credit reports for a fee and free reports to individuals who are credit fraud victims, have become unemployed or have received a denial of credit in the past 60 days.


    Experian.com offers consumers a variety of packages including access to credit information, credit scores and a report that contains information from the three credit bureaus.

Annual Credit Report

    Annualcreditreport.com is sponsored by TransUnion, Equifax and Experian. Under the Fair and Accurate Credit Transactions Act, individuals can receive a free credit report from each of these agencies once a year.


    Review all of the pricing information before requesting your online credit report. The only way to get free credit reports is by using annualcreditreport.com.

I Am Unable to Pay My Debts

Finding out that you cannot pay your debts is financially devastating. Although this is not a situation to take lightly, it is possible to work your way through it and get back on track financially. Creating a plan to deal with your financial situation, and then executing that plan can be the difference between success and failure in your pursuit of financial well-being.

Determine the Priorities

    When you cannot pay some of your bills each month, but still have money coming in, determine your priorities or what is the most important debt or bill that you should pay. For most families, this is the mortgage payment or the rent to maintain your shelter. Food should also be considered as part of the priority list. Utilities, keeping the heat and lights on, and transportation or other expenses that let you work round out your priority bills. If you can pay these bills, you will have shelter and food, and be able to travel to your job.

Communicate on Your Terms

    If you do not have enough money left over to pay other debts after paying the priority bills, you have no choice but to remain past due on the bills you cannot pay. Many credit card companies will start to call you multiple times in one day. You do not need to talk with these people when they call, but if you do, you need to be truthful about your situation and tell them that you cannot pay. To lower your stress level, set guidelines on how often you will communicate with creditors, and inform them of your intentions.

Develop a Budget

    To get ahead financially, you must plan for the future and how you will handle your finances. A great way to do this is to create a budget. List your income on a sheet of paper and all your monthly payments, starting with the priority expenses. Plan for each dollar that comes into your home each week, and have each dollar have its own purpose. If you are married, create the budget with your spouse. Once everything is on paper, follow the plan that you have developed, without exception.

Consider Your Alternatives

    If after considering your priorities and trying to create a written budget you determine that there just isn't enough money to realistically pay your bills, you may need to consider some alternatives. You may need to sell a car or two to reduce your payments to a more manageable amount. Perhaps your house is too expensive for your income level and you need to sell it. If selling assets won't significantly help your financial situation, you may need to file for bankruptcy and seek protection from your creditors under the guidance of the U.S. bankruptcy court.

Sunday, September 25, 2005

How Credit Card Companies Use Calculus


    Calculus is the tough subject in high school and college that you never thought you would ever use again in real life. In reality, if you ever plan to have a credit card and wonder how to calculate your minimum payment, you should have paid attention in class. Credit card companies use calculus on certain aspects of your account every month.

What is Calculus?

    In Latin, calculus means stone. Stones were used in ancient Rome to count and perform arithmetic. To be technical, we can say that calculus is just another form of counting. It is more advanced than algebra or geometry and is used to solve complex problems.
    Isaac Newton and Wilhelm Leibriz developed what we know as calculus in the 1680's. Although Isaac Newton is mostly noted for the discovery, Leibriz published reports on it 20 years before Newton did. The main function of calculus is to calculate change, simultaneously working computations on continuously evolving problems.
    Differential and integral calculus are the two branches of calculus. Used to solved the curve's derivative (slope and steepness) is differential calculus, or differentiation. This is useful for calculating the speed of a rollercoaster. Integral calculus, also known as integration, is used for more complex figures. Areas and volumes, such as the amount of water in a waddling pool, are topics handled by integration.

How Credit Card Companies Use Calculus?

    When minimum payments on a credit card needs to be computed, calculus is the method used. Credit card companies use the differential type of calculus to calculate this amount. There are several variables that go into the calculation because it is calculated by the amount of money that is due by a certain time (usually the due date that is listed on the bill). Add on to that the interest rate given and it becomes a complicated task. With all the changing parts, interest rates and available balances, the calculation has to be done simultaneously in order to provide the customer with an accurate minimum balance.
    The calculation that is used to determine the minimum payment starts with determining the interest that has accrued since the last payment, or over the month. To calculate the amount of interest, the following calculation is done:
    Accrued interest = Beginning balance * (interest rate/12)
    The 12 in the calculation represents the number of months in a year. So, if you have a beginning balance of 5,400 and an interest rate of 9.75%, the accrued interest for the month would be $43.88. Once that amount is calculated, then we can find out what the minimum payment is. After establishing the credit and signing up with the credit card company, a minimum monthly payment was set for what absolutely have to be paid on the card each month whether you used it that month or not. Most of the time, this amount is pretty small; $20 is what is usually set.
    The minimum payment that is on the credit card statement is calculated as such:
    =MAX(Minimum month payment, interest + minimum monthly payment)
    This means that if the interest accrued added to the minimum monthly payment is less that the set minimum monthly payment, then the largest amount must be paid. For instance, take the problem above. The minimum payment is $20 and the interest is $43.88; those two added together would be $63.88. Based on this problem, the minimum payment would be $63.88 because it is the larger amount.

How to Use Personal Loans to Pay off Massive Credit Card Debt

How to Use Personal Loans to Pay off Massive Credit Card Debt

If you have massive credit card debt, you should know that you're not alone. Millions of individuals around the world are suffering with overwhelming credit card debt that is threatening to pull them under. If you're looking for a solution, here is some information on how to use personal loans to pay off massive credit card debt.



    Gather All Credit Card Bills. The first thing you need to do is gather all of your credit card bills so you can determine exactly how much money you will need to pay off your credit card debt. Make a list of each credit card, the balance owed on the card and how much the interest is. Once you have gathered every single bill, add up the balances so you will know exactly how much credit card debt you have.


    Speak with Your Bank or Credit Union about a Personal Loan. Depending upon your credit history, loan history or debt to income ratio - you may need collateral for a loan. Speaking with a representative of your local bank or credit union will help you determine whether this is needed or not. Explain to them how much you need and what you can offer as collateral if needed. When you are told how much you are approved for, you can further determine how to use the money to pay off your credit card debt.


    Create Priorities. You may or may not be able to receive a loan that is high enough to cover all of your credit card debt. If not, you will need to create priorities. Look again at your list of debts and pay special attention to the cards with high interest rates. They should be paid off first. Pay off the credit cards that you can - paying the highest interest cards first. This will help you save money in the long run. You will have only one payment (the loan) rather than several and most likely it will be a fixed rate rather than a variable one.


    Pay Off Your Credit Cards. Now that you've determined which credit cards to pay off, or if you will be paying them all off, you need to do a few extra things. Send the money in a money order or check so you will have proof of the transaction. If possible, send the money certified mail so you will receive a receipt when the mail has been signed for and delivered. Also, send proof of the payoffs to all three major credit bureaus. These are TransUnion, Equifax and Experian. This will help insure that the information makes it onto your credit report and that the credit bureaus are aware that you've paid the debts off.


    Cut Your Credit Cards in Half. Okay, so this is an optional step, but it's important to learn how to manage credit cards. It's all to easy to end up overwhelmed by credit card debt again and be back in the same situation you were in to begin with. Consider credit counseling or something similar to empower you and give you knowledge about credit concerns.

Saturday, September 24, 2005

How to Read Credit Report Codes

It's a good idea to get a copy of your credit report from each reporting agency once per year. This will give you valuable information on who has been accessing your report and why, whether there are errors on your report that negatively affect your credit score, and whether or not you are a victim of credit fraud. However, once you've received a copy of your credit report, it can be hard to figure out what all of those codes mean. Learn how to decipher what credit reporting agencies are saying about you.



    Visit the Annual Credit Report website to get a copy of your free credit report (see Resources section). Everyone in the U.S. is allowed one free copy of their credit report per year from each of the three major credit reporting agencies. You can have the reports mailed to you or print them from your computer.


    View the Trans Union Payment History section. This is where the mysterious codes reside. These usually appear on the right hand side of the document under your credit accounts and shows your payments for a period of time relating to each account. For example, if you recently opened a credit card account, you may only see the code "0" which means that there is no balance or you may see an "X" which means that nothing was reported that month because it is so new. A "1" means the account is current and every number after that denotes a 30-day late payment, in increments of 30 days. So, if "1" is current, a "2" is 30 days late and a "3" is 60 days late. This continues up to "7" which means 180 days late. After that you receive a code "9" which means the account has gone to collections. If you see a code "B" this means there was a payment change and no other code is applicable. Each of the reporting companies uses a different code series.


    View the Trades section on your Experian report. Under this section you will see codes relating to loans and bank cards with a credit history. The codes for this area are:
    CURR ACCT = Account is current and in good standing
    CUR WAS 30-2 = Account is current, was 30 days late twice
    PAID = Account has been paid off to a zero balance and is inactive
    CHARGOFF = Unpaid balance has been included as loss by credit grantor and they are no longer seeking reimbursement
    COLLECT = Account is seriously past due and has been assigned to collections
    FORECLOS = Property was forclosed
    BKLIQREQ = Debt forgiven through Chapter 7, 11 or 13
    DELINQ 60 = Account is 60 days past due
    INACTIVE = Account is inactive
    CLOSED = Account is closed


    Review your Experian Payment History. Similar to the Trans Union codes, Experian's vary only slightly. C, N or 0 mean your account is current without a balance. 1-6 is 30-180 days past due and 7, 8 or 9 means bankruptcy has been filed or that the house is currently in foreclosure proceedings. You might also see:
    G = Collection
    H = Foreclosure
    J = Voluntary surrender
    K = Repossession
    L = Charge off
    B = Account condition changed, payment code not applicable
    - = No payment history that month


    Review your Equifax Payment History. Equifax's codes include:
    * = Current
    N = Current account/zero balance-no update tape received
    0 = Current account/zero balance-reported on update tape
    1 = 30 days past the due date
    2 = 60 days past the due date
    3 = 90 days past the due date
    4 = 120 days past the due date
    5 = 150 days past the due date
    6 = 180 days past the due date
    7 = Bankruptcy Chapter 13 (Petitioned, Discharged, Reaffirmation of Debt Rescinded)
    8 = Derogatory, e.g. foreclosure proceeding, deed in lieu
    9 = Bankruptcy Chapter 7, 11, or 12 (Petitioned, Discharged, Reaffirmation of Debt Rescinded)
    G = Collection
    H = Foreclosure
    J = Voluntary surrender
    K = Repossession
    L = Charge off
    B = Account condition change, payment code not applicable
    - = No history reported for that month

How to Shop Without a Credit Card

Shopping without a credit card might seem like an odd concept in a society where most people prefer to pay with plastic instead of cash. While some people prefer to use cash as a budgeting tool, other people simply cannot get their hands on a credit card because of past credit mistakes. Paying for purchases without a credit card is an easy task as long as you have the available funds.


How to Shop Without a Credit Card


    Use cash for your purchases. Although most merchants have grown accustomed to accepting credit or debit cards for purchases, hardly any of them will balk at receiving cash for payment. Some stores will actually offer a cash discount, so be sure to ask. Just don't be surprised if salespeople look twice when you use cash to pay for a major purchase.


    Write a check. Check beforehand to make sure that the merchant accepts personal checks because not all stores will accept checks. Make sure that you have ample identification handy because you will probably need to show at least one form of photo identification before your check will be accepted. Some stores keep a running list of approved customers who are allowed to write checks, so ask about getting your name on that list if one exists.


    Use a debit card. Debit cards look just like traditional credit cards but they pull funds directly from your checking account instead of using a revolving credit account. This way you have the convenience of a credit card without incurring any debt. As long as your debit card has a Visa or MasterCard logo you should be able to use it for purchases anywhere credit cards are accepted.


    If you want to make a major purchase, but you don't have credit or cash available, check to see if the merchant offers a layaway program. Layaway allows you to put an item on hold while you make payments. Sometimes the payments are interest-free, so this can certainly be an economically feasible way to get the things you want. Find out about any fees associated with layaway before you sign up.

Friday, September 23, 2005

Debt Recovery Information

Debt Recovery Information

Recovering from debt will take commitment, dedication and determination, but if you stick to a strategy, you can eliminate your debt over time. Once you know how much you have to contribute each month to paying off your debt, you will be able to take a good look at the options you have for getting out of debt as fast as possible, with the method that will have the least impact on your credit. Remember that paying off your debt now will help you have better financial opportunities in the future.


    You need to create a plan of action before you can begin recovering actively from your debt, and that's where a budget comes into play. Your goal for creating a budget is to figure out just how much you're spending each month in relationship to how much income you're making. To do this, you need to track your out-of-pocket spending over the course of a week. If you just use your debit card for all your purchases, your online bank statement is a good indicator of your weekly spending total. Add this to whatever monthly recurring bills you may have, such as utilities, mortgage/rent, day care or cell phone bills. Multiply the entire total by 4.3 to get a good idea of your total monthly spending. Where can you cut back so that you have more to contribute to your debt each month? If you find yourself feeling reluctant to cut back, remember that you'll recover more quickly when you pay more to your debt each month -- which will save you money in the long run.


    Once you figure out the maximum amount you can contribute to your debt each month, you need to decide on a payment plan that you'll stick with until your debt is paid off. Those who need to see their payments impacting their debt utilization ratio quickly may benefit from using the debt snowball plan, in which they pay off the smallest debt first. A $100 payment makes a much larger impact on a $500 balance than a $10,000 balance, and seeing their payments bring down big chunks of the balance may be motivational. Others may be motivated by saving money, in which case paying off the debt with the highest interest rate first may be the best option. This route ensures that you are paying as little on interest as possible over the course of your debt recovery.

Credit Counseling

    For those feeling overwhelmed by the amount of debt they need to pay off before they have fully reached financial freedom, credit counseling may be helpful. You may find a reputable credit counseling organization by using the search function on the National Foundation for Credit Counseling website. By reviewing your specific financial situation, your credit counselor will be able to help you formulate a workable budget and make recommendations that are best suited to your life. Your credit counselor may propose solutions such as assistance in formulating a strategy for self-help, debt consolidation, a debt management plan or bankruptcy.


    Identify the root of the reason you got into debt to begin with so that you know how to avoid that behavior when choosing a debt recovery plan. For example, if your problem is overspending, debt consolidation may actually present you with more problems than solutions, since a consolidation loan frees up your credit, and without restraint you could potentially end up with even more debt. When working with a credit counselor, you will have the ability to ask for the benefits and drawbacks of each option to avoid harming your credit.

Wednesday, September 21, 2005

How to Report a Good Standing to a Credit Bureau

How to Report a Good Standing to a Credit Bureau

Credit scores are one of our most important forms of currency. A negative score can stand between you and home ownership, a car lease or a college education. It appears that Americans are getting the picture because, according to a 2010 MSNBC poll, consumer debt has decreased significantly, and many folks are on the road to financial recovery. If you too have gone from a negative credit history to good standing, then it's time to make sure your credit bureau knows it and shows it.



    Order your credit reports. The Federal Trade Commission (FTC) guarantees every American a free annual credit report from each of the three major credit bureaus: Experian, Transunion and Equifax. Fortunately, they have an aggregated site where you can see and order all three reports at once. Log on to www.annualcreditreport.com and enter your identifying information (Social Security number, prior addresses, family name). You may be asked to verify your identity with several security questions. You can also order your reports by phone by dialing 1-877-322-8228, or by mail by writing Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.


    Collect good-standing documentation. Contact your creditors to verify that you are in good standing and seek advice on how to document it. In some instances, an account supervisor may agree to mail a letter stating that your account is in good standing. Other companies will help you understand their definition of good standing, such as 12 months of on-time payments. Then it's your responsibility to gather that documentation (12 months of statements) as your proof.


    Register a dispute. Each credit bureau has an online feature that enables you to provide a brief description of any item you select to dispute. It may be as simple as providing a brief description that states "this account is currently in good standing" to jar the credit bureau into updating the account information.


    Wait 30 days before follow up. According to the FTC, the credit bureaus have to investigate and respond to your request within 30 days. If the matter has not been resolved in your favor, follow up with a detailed but brief letter to the credit bureaus and include copies of the documentation that indicates your good standing. You may also request that a statement of dispute accompany your credit report until the matter is resolved.

How to Document a Financial Hardship

How to Document a Financial Hardship

Economic troubles make it difficult for many people to repay the debts they owe. While it may be possible to negotiate a settlement plan that eases your financial burden, you may be required to document a financial hardship before creditors are willing to do this. The most common way to do document a financial hardship is through a letter to the creditor which documents the reasons why it is difficult to maintain your financial responsibilities.



    Include a brief description detailing the specifics of the financial hardship. According to USAttorneyLegalServices.com, valid reasons for documenting financial hardship include job loss, health problems, a death in the family and military service.


    Provide proof. Include documents that support the claim, such as bank statements, late notices, verification of income or other documents that detail financial hardship.


    State the type of relief sought. State exactly what you are looking for the creditor to do, such as lower or defer payments, lower the interest rate, refinance or approve a short sale on a property. Debts that may qualify for such negotiations include medical bills, student loans, personal loans, credit cards and mortgages.


    Disclose the timeframe in which the creditor can expect the situation to be resolved. A creditor may be more willing to work out some type of negotiation if he expects that someone may be able to repay the debt in the future.


    Keep copies of all correspondence and financial documents sent to, or received from, the creditor.

Monday, September 19, 2005

How Long Does it Take to Show an Authorized User on Credit?

If you have poor credit, it may be difficult for you to get a credit card in your name. However, if you have a friend or relative who trusts you and who has good credit, he can list you as an authorized user on his credit account. As an authorized user, you have your own card and the same rights to make purchases. The credit card company may or may not report positive information about you every 30 days when the primary cardholder pays his bill. It should not report negative information about you if he defaults.

Timeframe Depends on Lender

    Some creditors do not report authorized users on credit cards to the credit card bureaus. This practice helps stop fraudsters from paying a person with good credit to authorize them as users for the sole purpose of raising their credit scores due to the primary cardholder's good payment history. If a creditor does report authorized users to the credit bureaus, it does so every 30 days when it reports whether the primary cardholder has paid his bill on time.

Negative Information

    In most cases, the authorized user's credit is not affected if the primary cardholder defaults on the credit card. The primary cardholder is considered solely responsible for the debt; thus, the creditor will report her if she does not pay the debt as agreed, not the authorized users. Some creditors report authorized users anyway in the hopes that they will pay the debt, but this practice is illegal.


    Since the primary cardholder is liable for any credit card use, he has little recourse if the authorized user abuses credit. The abuse will not show on the authorized user's credit report, and the primary cardholder's credit may be affected. Thus, many primary cardholders ask authorized users to sign a written agreement stating they will not use more than a certain amount of credit or only use the card for certain purchases. This agreement supports the primary cardholder should he have to sue the authorized user to recover funds.

What to Do

    If an authorized user discovers that delinquencies have been reported on her credit instead of on the primary cardholder's, she should dispute the debt in writing. Send a letter to the credit grantor as well as the credit bureau that reported the information. In the letter, inform the creditor that you are an authorized user and not financially responsible for the debt. If the creditor will not remove the negative information, contact an attorney.

How to Challenge an Incorrect Credit Report

As a consumer, you have the right to challenge a credit report with any inaccuracies. Use the following steps to get any errors on your credit report fixed.



    Get a copy of your credit report from the three credit bureaus -- Experian, Transunion and Equifax. Check for and flag any inaccuracies. Keep in mind that each credit report could have different errors so make sure to check each document carefully.


    Once you have found an error in one of your credit reports, dispute the error either online at the credit bureau website or via a registered letter that references your account number, the error and any identification information.


    Call the phone number for the credit bureau to make sure that you are including any documentation needed to challenge the credit report. Ask how long it will take to address any inaccuracies. The credit bureau should provide you with a form that you can fill out with all the requisite information.


    After you have given the credit bureau a sufficient amount of time to correct your credit report, follow up to ensure that your issues have been addressed appropriately. Call the credit bureau and provide details of the inaccuracies and the date you sent out the letter and request a status update. The Fair Credit Reporting Act provides you with the ability to dispute any incorrect or incomplete information, so make sure that you continue to follow up until your credit report is completely accurate. You can challenge a credit report easily and have any inaccuracies resolved within 30 to 45 days.

Sunday, September 18, 2005

How Long After Paying Off All Debts on a Credit Report Will It Affect the Report?

It's a common misconception that negative information on a credit report goes away once a debt is paid off. However, the amount of time that information stays on your report is a matter of federal law and, in most cases, has nothing to do with when the debt is paid off.

Credit Report Time Frames

    The federal Fair Credit Reporting Act (FCRA) sets time limits on a credit bureau's reporting of negative information. Most negative information, such as late payments, paid judgments or charged-off credit card accounts can stay on your report for seven to seven and a half years. The FRCA allows credit bureaus to report bankruptcies for up to 10 years, though some credit bureaus voluntarily remove a Chapter 13 repayment plan after only seven years.

    With the exception of unpaid judgments, which can stay on your report until its statute of limitations runs out, the fact that a debt is paid or unpaid has nothing to do with these time restrictions. Once the time frame prescribed has passed, information about a debt--even a legitimate, unpaid debt--can't be re-added to your credit report.

Credit Report Update

    When you pay a debt, your creditor or collection agency should update the information on your credit report to reflect your payment. This usually means reducing your balance to zero and indicating that the account has either been paid in full or that you settled the account for less than the amount due. Unfortunately, this second notation can often hurt your credit, though your zero balance will reduce your overall debt-income ratio.

Common Misconceptions

    Some people fear paying off old debts because, in the past, paying off an old debt could "reset the clock" on the length of time that the debt could stay on a credit report. However, the Fair and Accurate Credit Transactions Act of 2003 changed this, so paying an old debt won't extend its presence on your credit record.


    When working with a creditor or collection agency, ask if they will remove a negative account from your report in exchange for repayment. Some won't agree to this, but some will, so don't be afraid to make the request. Of course, be sure to get your agreement in writing before sending any money.

Can I Fix My Bad Credit After a Divorce?

Can I Fix My Bad Credit After a Divorce?

Ending a marriage is painful enough on its own, but when one of the results of your divorce is a trashed credit report and score, it can hurt even more. Even just one unpaid joint credit card can knock points off your credit score. You can take steps, though, to protect your credit rating both during and after the divorce, ensuring that you can make a financial fresh start after your marriage ends.


    Fixing poor credit is often a matter of time. Regardless of the reason for your credit woes -- divorce, illness, unemployment, etc. -- the only true way to fix your credit is to pay what you owe, maintain a solid payment history on the accounts that are in good standing and wait for the legitimate negative information to be removed from the report. Most information will appear on your credit report for at least seven years. After your divorce, regularly monitor your credit report and address any errors immediately. Continue to use credit responsibly, by paying your bills on time, keeping your balances low and limiting the number of new accounts you open. In time, your credit score will improve.

Joint or Separate Accounts

    How a divorce affects your credit depends in large part on whether your accounts are individual or joint. A joint account takes both partners' information into consideration and both are equally responsible for repaying the debt. Individual accounts are those in which the lender considered only one person's income, assets and credit history when making the offer for credit. If you live in a community property state -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin -- then both spouses may be responsible for all debts incurred during the marriage, regardless of whether the account was individual or joint. You are responsible for any account with your name on it, so continue to make payments until your name is officially removed from the account to keep your credit intact.

Credit Report

    When you and your spouse decide to separate, take steps to protect your credit, as you could end up responsible for debts your spouse runs up during the divorce process. Remove your name as an authorized user on any of your spouse's accounts, and close or convert any joint accounts. As soon as your divorce is final, request a copy of your credit report from all three credit bureaus. Carefully check your report for errors and discrepancies, and notify the bureau if your report lists any accounts for which you're no longer responsible. Continue to monitor your report regularly and immediately address any incorrect information that appears.

Divorce Decrees

    Many times, a divorce decree will state that one spouse is responsible for assuming certain debts, such as charges on a joint account or a card in your name that she was authorized to use. However, even if the divorce decree indicates your ex-spouse agrees to pay, you are still legally responsible for the debt, so if she does not pay the bill, your credit suffers. When you receive your divorce decree, forward a copy to the creditor, explain the situation, and ask to have the contract or agreement amended to legally shift responsibility for repayment to your ex-spouse. Not all creditors are willing to change the agreements; if your creditor will not, carefully monitor the account to ensure the debt is being paid. If your ex is falling behind, you'll need to pay the bill to keep your credit intact and work with your ex-spouse to get the money back.

Saturday, September 17, 2005

Can Interest Accrue on Charged Off Debt?

Many borrowers with charged-off debts are surprised by bill collectors claiming the debt has accrued large amounts of interest. Although some debts may become too old for lenders to collect, charged-off debts do typically continue to accrue interest.


    Charged-off debt, according to the financial website The Dollar Stretcher, is outstanding debt that a lender has declared uncollectable for accounting purposes. Although the lender may scale back collection activity, the debt remains valid and may continue to accrue interest.


    Although The Dollar Stretcher points out that lenders typically charge off the outstanding debt, the Iowa Division of Banking notes that some lenders charge off both the debt principle and anticipated interest. In some cases, the charge-off activity may limit the amount of interest that can accrue.

Statute of Limitations

    Some states, according to The Dollar Stretcher, limit the amount of time a borrower can be responsible for an unpaid debt. This expiration date, known as the statute of limitations, varies from state to state but typically ranges from three to six years.

Information on 0% APR Credit Cards

If you are lucky enough to be receiving 0% credit-card offers, you can use these offers to your advantage. However, be very careful to read the fine print because 0% often does not mean that you pay absolutely nothing. There are typically conditions to the 0% offer, and if you do not follow the conditions, you could end up paying a very high interest rate. Nevertheless, there are many ways to use a 0% credit offer to your advantage.

Conditions of the Offer

    Check the terms and conditions of the offer. Credit card companies typically will offer 0% on purchases (old and/or new), cash advances, and balance transfers. However, just because a credit card offers 0% interest does not mean that it is completely "free." In cases of cash advances and balance transfers, there is usually a fee that the customer must pay upfront for the services.

0% on Purchases

    Credit cards that offer 0% on purchases usually mean any NEW purchases. Thus, if this is an existing card, any old purchases you have made do not receive the 0% offer, and it is advisable to pay off all old purchases completely before taking advantage of the 0% offer. However, in most instances, you received the 0% when you open a new account, so you do not have to worry about old purchases. The 0% offer lasts anywhere between 3 months to 12 months. There are offers of 0% lasting longer than 12 months, but they are rare, especially in today's market. Moreover, while some cards are "no interest, no payment," where the customers do not have to pay a minimum payment every month, most cards require customers to make a minimum payment every month in order to maintain the 0%. Thus, it is essential that you pay the minimum balance each month, or your interest can suddenly jump to a very high rate.

0% on Cash Advances

    A cash advance is when the credit card loans you money, at a certain rate. This is usually a very bad idea since credit cards will charge a much higher interest rate than a bank would for a loan. However, if a credit card is at 0%, you can certainly take advantage of that interest-free money for as long as the offer stands. If you decide to take advantage of the cash advance offer, make sure you find out what fees are charged. Most credit cards charge a 3% processing fee, up to a certain maximum. This means if you decide to do a cash advance of $1,000, the credit card company will charge you $30. In this scenario, the 0% cash advance actually carries an interest rate of 3%, assuming the 0% rate is for a period of 12 months. If the 0% offer is only valid for 6 months, then you are paying 6% interest for that $1,000 cash advance. Further, it's essential to pay back the cash advance before the 0% offer expires. This is extremely important because if you do not, the interest will jump to a much higher rate once the 0% offer expires, and you could end up paying hundreds of dollars in interest.

0% on Balance Transfers

    A balance transfer occurs when you transfer your balance from one credit card to a different credit card. This option makes sense if you have a balance on a credit card that carries a high interest rate and you want to transfer that balance to the credit card with the 0% offer. Before doing this, find out what fees are charged. Most credit cards charge a 3% processing fee, up to a certain maximum. For example, if you transfer $1,000 from another credit card to the 0% credit card, you will be charged $30 for the transaction. Again, this means you are still paying a certain amount for this service, and it is not actually "free." Finally, as in the case above, you must pay back the balance transfer when the 0% offer expires. If you do not, the interest will increase to a much higher rate once the 0% offer expires and you could end up paying lots of interest.

Shop and Compare

    To find the credit card that best suit your needs, shop and compare. There are many sites that help you compare credit cards and pick the best one for you. Creditcards.com (see Resources) is a good option.

Friday, September 16, 2005

How to Negotiate Debt Payoff

How to Negotiate Debt Payoff

If you're deeply in debt, or even have a moderate amount of debt, paying it off should be high on your list of priorities. Being in debt means you're likely paying plenty of money in interest, which keeps you in the tight noose of creditors. Negotiating a debt payoff plan is a first step to becoming debt free. It might take a little work on your part, but will be worth it when you write that final debt payment check.



    Gather together any statements that you have from various creditors, whether they are from credit cards, home removations, store cards or any other debt. Calculate the amount you owe each creditor.


    Call each creditor and ask if it will settle for a lower, lump sum payment instead of a higher and more drawn out payment process. As a general rule, try and negotiate 50% of the amount you owe to start as a lump sum payment. You can also negotiate for removal of late fees and penalties. Many smaller creditors will choose a lower lump sum payment.


    Find out the statue of limitations for your state. As you near the statute of limitations (the amount of time that a creditor is allowed to attempt to collect a debt from you) your creditors will be more likely to try and settle the debt with you.


    Keep calm during the negotiation process, otherwise your creditors will sense your desperation and will be less likely to negotiate a debt settlement. Be polite and courteous and keep your statements handy so you can show your creditor that you are knowledgeable and organized.


    Report a settlement to all of the credit reporting agencies so that they can mark the debt as settled and adjust your credit score accordingly.

Thursday, September 15, 2005

How to Prevent Identity theft on a College Campus

Every fall thousands of young adults leave home and go to college. Some get their own apartments. But the majority of college students live in the dormitory. If you plan to stay in the dorm, its vital to take certain precautions. Identity theft on campus has become a big problem in recent years. Fortunately, there are practical ways to protect yourself.



    Keep your dorm room locked. It only takes a few minutes for someone to walk into your dorm room and swipe important information. This may include a bank statement, credit card or Social Security number. Once they have this information, they can open a variety of new accounts in your name.


    Purchase a locked file cabinet. Rather than keep your personal information lying on a desk in open view, buy a small file cabinet and keep the drawers locked. This is a great place to store valuables, money and financial information.


    Request a post office box. Some campus dormitories dont have private mail boxes. To prevent identity theft on campus, visit your local Post Office and ask for a P.O Box. Have all your statements and private mail forwarded to this address.


    Protect your computer with a password. Today, its easy to keep website login information stored on the computer. Unfortunately, if someone gets hold of your computer, they can easily access this information. Password-protect your desktop computer or laptop.


    Change your student identification number. Often times, a students identification number is the same as their Social Security number. The best way to prevent identity theft on campus is to request a new, unique student ID.

Wednesday, September 14, 2005

How Will a Line of Credit Affect a Credit Rating?

How Will a Line of Credit Affect a Credit Rating?

Many want to improve their credit scores, but with the various criteria credit reporting companies use to determine scores, it's difficult to know what you should be focusing on. Opening a line of credit, whether you're doing it for your first time or fifth, has both positive and negative effects, depending on your personal situation.


    A line of credit is a loan, either secured or unsecured, granted to you by a financial institution. Examples of lines of credit include car loans, student loans, mortgages and credit cards. When you take out a secured line of credit, you have provided collateral to back up your loan in case you can't pay it off in full. An unsecured line of credit, like most credit cards, is a line of credit that doesn't require any collateral upfront.

Credit Ratings

    Your credit rating is what lenders use to determine your creditworthiness, or how much of a risk you'll be if they extend a line of credit to you. Your credit rating is made up of both positive and negative aspects. You can access your credit report annually for free online through one of the three main credit reporting companies: Equifax, TransUnion, and Experian.

Positive Impact

    A new line of credit can boost a credit rating in three main ways. First, if you don't have a credit history, a new line of credit enables you to build one. Second, if you have a high balance on a card and open a new line of credit to transfer part of your balance, your score may improve. This is because lenders would rather see you have two cards with low balances than one card that's "maxed out." Finally, opening a new line of credit in addition to a couple of accounts in good standing will further increase your score, since it demonstrates your ability to manage multiple accounts.

Negative Impact

    A new line of credit isn't always a good thing, depending on your situation. For example, if you already have multiple accounts (especially if many of them have been opened recently, or if many have high balances), your credit rating will drop. If you continually take out new lines of credit to transfer a large balance from one card to another, your score may drop. Closing many accounts in a short period of time adversely affects your score.

Expert Insight

    If you're considering taking out a new line of credit to pay off other credit due to overspending, be wary. You can't be certain you won't be tempted again to use your new card for unnecessary purchases, so the Federal Trade Commission recommends instead budgeting your monthly expenses, contacting your creditors to ask for a reduction in monthly payments (or a reduction in interest rates), or even enrolling in a Debt Management Plan to help you repay your debt in a realistic way.

Tuesday, September 13, 2005

How Do I Negotiate to Pay Off a Credit Card With Bank of America?

Whether you're looking to reach a debt settlement on your credit card or attempting to pay off a credit card early or with less interest and waived fees, Bank of America has customer representatives specialized in dealing with your specific requests. Banks and other lenders often make special arrangements with customers who show a good-faith effort to pay their debts by lowering interest rates, making payment arrangements or settling a debt for less than what is owed.



    Review your credit card statement and personal budget. Determine how much money you need to pay off the credit card and how long it will take to obtain those funds. Ask yourself if you can pay off at least 25 to 50 percent of the card balance in full now or if you will have the total funds needed to pay the entire balance in full over an extended period. Bank of America might accept a payment as low as 25 percent of the total amount owed, or you can request monthly payments under a lower interest rate and with past fees waived.


    Make notes for a payment plan proposal to offer the Bank of America representative you reach. Be willing and expect to have to compromise on your proposal, but make certain you know your limits. Include a verifiable reason you are requesting help, such as unemployment, a death in the family or disability, and gather documents that could support your financial position, if needed.


    Call Bank of America's Consumer Credit Card and Personal Line of Credit help line at 888-800-5160. Ask for and make note of the representative's information, including his or her name and direct phone line. Give your account number and explain your situation. Make certain you are speaking to the right type of account specialist for your request before you go into too much detail. Mention any documents you can fax or mail to support your reasons for requesting help. Explain how much you are able or willing to pay to bring your balance to zero. Politely ask if any payment plans exist to fit those circumstances.


    Negotiate until agreeable terms are met. Expect the representative to counter your proposal with an amount higher than what you've suggested. Remain calm, speak politely and professionally, and be willing to compromise on the amount without going over the payoff you've noted you can afford. Ask for something in exchange if you agree to Bank of America's proposed amount, such as a more favorable report to credit reporting agencies (ask them to list your account as "paid" rather than "settled").


    Be prepared to ask for a supervisor. The representative to whom you are speaking might show an inability or unwillingness to negotiate. Politely request to speak to their supervisor, and start your negotiations again. If a supervisor is not available, hang up and call back until you reach a different account specialist.


    Get everything in writing. If the Bank of America representative agrees to your payment proposal, request the details in writing by mail or fax. You will also be required to sign paperwork agreeing to the terms.

Monday, September 12, 2005

How Does Credit Card Consolidation Affect Your Credit Score?

Credit card consolidation potentially helps your credit score by reducing balances on other accounts. However, improvement in your score may be minimal or short-term. Actually paying down balances is a much better strategy than consolidation, which merely moves the debt around. Paying all your bills on time and keeping all revolving balances low is the most effective way to build credit.

Reasonable Expectations

    Patience and persistence is needed to rebuild credit, with significant results usually realized after 12 to 24 months of practicing solid credit fundamentals. One-time moves such as consolidation could improve your score by a few points, and maybe that's all you need to qualify for a mortgage or better interest rate on a new car loan. Overall, it's best to adopt a broader strategy for building credit.


    Some people consolidate credit card debt and later begin charging again. After a while, the cards that were paid off are carrying a balance, creating an even bigger drag on the credit score. That's perhaps the biggest danger with consolidation. Many people consolidate and find that it leads to little real improvement in score and eventually more debt. Lock your credit cards away in a bank safe deposit box if you do consolidate. The cards will remain available in an emergency and you'll avoid impulse spending by not carrying them around.

Credit Scores

    It's impossible to predict exactly how much your score will improve after consolidation because everybody's credit situation is different. Usually people with lower scores see the most improvement. Credit scores are three-digit numbers ranging from 350 to 850, with scores of 720 or higher representing excellent credit. A score of 620 is usually needed to qualify for a home mortgage, although there are exceptions. Higher credit scores lead to lower interest rates.

Negative Information

    Consolidation won't help much if your credit report is full of negative information such as late payments, charge-offs, collection accounts or tax liens. Simply making payments to bring all your accounts current could boost your score as much as consolidation. Removing negative information such as charge-offs through legal and ethical methods helps as well. A creditor may agree to remove an old charge off in exchange for full payment. That is called "pay-for-delete," and it is rarely granted. However, it's worth a try on all charge-offs and collection accounts.

Free Credit Reports

    Pull a copy of your credit report for free before starting your rebuilding. View and print the report from AnnualCreditReport.com, which is endorsed by the U.S. government to offer credit reports for free under the terms of the Fair Credit Reporting Act. Order you credit score separately, for a fee.

Sunday, September 11, 2005

What Is Sufficient for a Debt Collector to Show in Court as Proof of a Debt?

In any civil lawsuit, the burden of proof rests with the plaintiff. This means that when a debt collector sues you in court, she must prove that the debt exists; it's not necessary for you to convince the court of the opposite. The burden of proof in civil court is much lower than in criminal court. A debt collector can prove the debt's existence in several ways.

Your Failure to Plead

    Under the Federal Rules of Civil Procedure, which are closely mirrored by the civil procedure codes of the states, your failure to file an answer within the time allowed after getting served will be treated as an admission of allegations in the plaintiff's complaint. If you fail to plead, the plaintiff can obtain a judgment against you by resting on the pleadings alone. As such, you will lose the case even if you could have put on an airtight defense. Only in very narrow circumstances will a court set aside its judgment and allow you to defend the case.

Requests For Admissions

    Requests for admissions are another civil procedure tool that a plaintiff can use to win a case without a fight. Under the civil procedure codes of many states, the plaintiff can serve you with a set of statements that you are asked to admit or deny within a certain time period. You may be asked to admit or deny the authenticity of copies of documents attached to the request, or the plaintiff may again allege the facts set forth in the complaint. If you deny something that the plaintiff later proves to be true, you can be held responsible for the attorney fees incurred in proving the assertion. If you admit all of the key facts -- or if you fail to respond -- the plaintiff can obtain summary judgment against you.

Signed Agreement

    Even if you file your answer on time and properly respond to any requests for admissions, a debt collector may be able to prove the existence of the debt by producing an account agreement signed by you or some other written evidence that you incurred the debt. If you sign up for a credit card or personal line of credit and charges are made against the account, for example, you will be responsible for those unless you can show you were the victim of identity theft and promptly took steps to notify the creditor.

Account History

    The history of your account may also provide evidence that a debt exists and that it's yours. A lot of bill collection work involves collecting accounts where the debtor made at least some partial payment on the account; if you ever sent the creditor payments in response to a bill or statement, this will operate as an acknowledgement that the debt was yours. The court will likely reason that you wouldn't have made payments on an invalid debt.

How to Deal With a Judgment From a Credit Card for Unsecured Debt

A civil judgment for an unsecured credit card debt puts you in a tough position. According to The New York Times, the judgment gives the credit card company or debt collector the right to seek garnishment of your wages or bank account. The Times reported in 2010 that garnishments were rising fasts in some areas -- including an increase of up to 121 percent in the Phoenix area since 2005 and 55 percent in the Atlanta area since 2004. Garnishments increased 30 percent in Cleveland between 2008 and 2009. No national statistics were available, according to the Times.



    Ask for a payment plan. Contact the attorney for the credit card company or debt collector. The lawyer has complete leverage at this point because you have already lost in court. Offer to pay the full amount due through installments or a lump sum in exchange for a promise that your wages and bank account will not be garnished. Get terms of any agreement in writing.


    Contact a nonprofit credit counselor for help if you cannot negotiate an agreement. Get a referral for a nonprofit counselor by contacting your bank or credit union. Ask the counselor to contact the attorney on your behalf and negotiate an agreement.


    Make an appointment for a free consultation with a bankruptcy attorney as a last resort. Ask the attorney about Chapter 7 bankruptcy, which eliminates unsecured debts such as credit cards, within months. Your bank accounts and wages will be protected from garnishment as soon as you file for bankruptcy according to Nolo.com. Another possibility is Chapter 13 bankruptcy, which also will end the threat of garnishment. Chapter 13 requires a payment plan of three to five years. The bankruptcy attorney can describe the option best for your circumstances.

Saturday, September 10, 2005

How to Figure Out Debt to Credit Ratio

When you apply for a loan, a lending institution looks at a number of different calculations to determine how likely it is that you will be able to pay back the loan. Your debt-to-credit ratio is one of these calculations, and it has a direct impact on your credit score, which is a basis for most lending decisions. By understanding this ratio, and how to keep it in line, you can take steps to raise your credit score, and therefore to raise your chances of getting that new loan.



    List all the debt you have on revolving credit accounts, such as credit cards and lines of credit. Then list all the credit limits on these accounts. For example, you might owe $5,000 on a credit card with a $10,000 credit limit.


    Add up all of your debts. Then, separately, add up your credit limits.


    Divide your total debt by your total credit limit to find your debt-to-credit ratio. For example, if you have $10,000 in total debt and a $50,000 credit limit, your debt-to-credit ratio is .2, or 20 percent.

What Can a Debt Relief Counselor Do for Me?

A debt relief counselor can help a consumer make decisions with the intention of reducing their debt loan and improving their financial situation. Debt relief counselors fall into two main categories: debt settlement counselors and credit counselors. The former, who is always associated with a law firm, can help a person settle debts with creditors. The other will generally provide financial advice designed to improve the person's management of debt.

Debt Management Strategies

    A debt relief counselor will often help the person develop strategies that will help them cut down on their expenses and make the most of the money they have at their disposal. For example, the counselor may help the person identify unnecessary expenses that are eating up his funds each month. In addition, the counselor may introduce programs that can help consumers pay their bills or cut expenses.

Restructured Loans

    Some counselors will also help people modify or restructure their loans. This can be done a number of ways. Some people may seek to refinance their loans, particularly if the loans are larger, such as auto loans and home loans. In addition, the counselors may help them develop loan modifications that they can present to their creditors. Some creditors may be willing to modify existing loans if it will keep the borrower from defaulting.

Debt Negotiation

    Counselors may also help a person negotiate a debt settlement with their creditors. Sometimes creditors will agree to accept only part of an outstanding debt and not attempt to collect the remaining portion, as they would prefer partial payment over nothing. Counselors may conduct these negotiations themselves or provide their clients with strategies to help them negotiate with the companies. The downside to debt settlement is it can lead to a lower credit rating for the debtor.


    The cost of counseling, as well as the quality of the advice offered, can vary considerably. Some credit counseling services are not regulated by the government and may offer cookie-cutter service at high prices. In addition, some of these companies, even some of the so-called nonprofits, receive funding from credit card companies, which may lead the counselors to suggest advice that benefits the creditors more than it does the client.

Advantages & Disadvantages on College Students With Credit Cards

Advantages & Disadvantages on College Students With Credit Cards

College students, or their parents, may toy with the idea of getting a credit card. Credit cards carry out a useful purpose. But if not careful, college students can develop credit or money problems from the misuse of credit accounts.

Establish Credit History

    A strong credit history is highly important when the time comes for financing a mortgage. Upon receiving an application, lenders and creditors immediately pull credit reports to review an applicant's credit score, amount of present debts and payment record. Applicants without a credit history may not acquire financing. You need credit to build credit, and obtaining a credit card as a college student opens the door to good credit history. Some banks readily offer student accounts to individuals in college, and banks report account activity to the credit bureaus on a monthly basis.

Budgeting Skills

    Having a credit account can provide college students with a real life lesson in budgeting and managing their personal finances. Credit card companies send monthly statements with due dates. College students then have the responsibility of remembering when payments are due, and reserving enough money to make payments by the due date. Paying on time is crucial to building a good score because creditors notify bureaus when payments are 30 days late.

Debt Accumulation

    Although credit cards can give college students an early start with regards to building a credit history, owning a credit card also opens the door to high credit card bills. Some banks issue small credit limits when dealing with a first-time credit card user. Limits gradually increase, and this increases the danger of accumulating excessive debt. Too much debt not only takes a chunk of disposable income each month, but students risk maxing out their credit cards and being unable to pay down balances. Debt can follow students post graduation, and lower their FICO credit score.

Credit Card Tips

    Benefiting the most from credit cards as a college student involves making wise choices. Acquiring a credit card in your name isn't a pass to buy whatever you want. The more you purchase with the card, the more you have to repay. Rather than let balances accumulate from month-to-month, start off on the right foot and eliminate balances each month. In other words, only charge what you can payoff within 30 days. This method greatly improves your payment history which ups your credit score, and you avoid high credit card balances.

Is it Possible to Climb Out of Debt?

Rising interest rates and unexpected emergencies can cause a manageable debt to snowball into a huge debt in a very short space of time. However, you can take certain measures to reduce your debt burden and ultimately enable yourself to climb out of debt. You cannot clear your debts overnight but you can take immediate steps that will eventually help you to reach that goal.


    Before you cut your spending you first need to get a clear idea of your income and that means reviewing your pay check, retirement check and other sources of income to determine take home, or net pay, as opposed to pre-tax pay. Having determined your take-home pay, consider writing a list of essential expenses, such as utilities and your mortgage. Gym memberships, premium cable subscriptions and your daily newspaper delivery are all examples of discretionary spending. Set yourself a reasonable weekly limit for other expenses like food and gas and try to stay within this budget. You can use surplus funds that you previously spent on discretionary items to start paying down debt.


    You should review your credit card statements and other loan payments to see which debts have the highest interest rates. Use surplus funds to make principal payments on the debts with the highest rates so you can pay those debts down faster. However, if you cannot afford to pay all the bills, pay your secured debts, such as your mortgage and car loan, first so you do not end up being foreclosed on or having your car repossessed. If you can afford to pay the bills before the due date, doing so enables you to prevent a couple of days worth of interest from accumulating and little savings like this can go a long way as part of your debt reduction plan.


    Contact your creditors and attempt to negotiate principal or interest rate reductions if you cannot afford to pay all of your debts. Try to negotiate debt reductions yourself rather than going through a debt reduction company since those companies have no power to do anything you cannot do yourself and you end up paying fees that could have gone toward the debt. If you have equity in your home, try consolidating other debts into a low-rate home loan. If you do so, you put your home at risk so do not take on a home payment you cannot afford.

Last Resort

    Sometimes creditors refuse to negotiate and income levels are just not high enough to pay down debt. If you find yourself in this situation you have one other option: bankruptcy. Chapter 13 bankruptcy enables you to keep assets like your home and set up a payment plan to settle debts. Chapter 7 bankruptcy involves selling all of your assets and clearing all of your debts. Bankruptcy stays on your credit report for 10 years and makes it very hard to borrow in the future, but you may prefer to have no debt and a limited ability to obtain future credit rather than having more debt than you can afford.

Friday, September 9, 2005

How Long Does it Take for a Creditor to Take You to Court?

When you owe a debt to a creditor, one of the actions that it could take to collect the debt is to file a lawsuit against you. Once a lawsuit is filed, you will have to appear in court and risk receiving a judgment against you. Understanding how much time you have before this occurs can help you determine your best options to handle the debt.

Account Charge-Off

    When you have a debt with a creditor, you will not be sued until the creditor charges off your account. A charge-off is a process by which the creditor removes your account from its books and writes off the account as bad debt. The creditor typically will not do this until somewhere between six and eight months have passed. When the account is charged-off, it will appear as a negative item on your credit report.

Verifying the Debt

    After charging off the account, the creditor will most likely turn your account over to a collections agency. A collections agency will contact you and try to collect the debt. Once the collections agency contacts you, you can request a verification of the debt. The collector then has 30 days to provide verification of the amount you owe. From that point, you have 30 days to pay the debt or set up a payment plan. After that, the creditor may file a lawsuit against you.

Will Creditor Sue?

    Even if you owe money to a creditor for an extended period of time, you may not be sued. Creditors evaluate each account differently to determine whether they will file a lawsuit. If the amount is relatively small and the creditor does not want to pursue it, you may never have a lawsuit filed against you. Companies know that they will incur legal fees along the way and it may not be worth it to them to file.

Statute of Limitations

    When it comes to collecting a debt, creditors must abide by the statute of limitations laws. Each state has a statute of limitations on debt. If the debt has been in effect for longer than the statute of limitations, the creditor can no longer collect it. Statutes of limitations very from as short as three years to as long as 15 years.

What Is a FICO Score & Why Is It Important?

What Is a FICO Score & Why Is It Important?

Building a credit history and maintaining a high FICO credit score opens the door to various financing opportunities. Credit scores are highly important, and understanding how lenders and creditors use FICO scores may encourage you to improve your score and make wise credit decisions.

What Is a FICO Score?

    FICO credit score refers to a three-digit number that creditors and lenders use to determine whether a person is a good candidate for financing. The score is based on information found in an individual's credit report. These scores range from 300 to 850, and having a score 700 or higher is generally a good indication of wise credit habits, says Experian. They are called FICO scores after Fair Isaac Corp., the company that developed the credit scoring model.

Factors that Influence FICO

    Knowing the factors that influence a FICO credit score can put you a step closer to improving your present rating. Myfico.com highlights several factors that affect scoring. The two biggest factors are payment history and the amount owed, which impact scores by 35 and 30 percent, respectively. Improving a FICO score undoubtedly calls for paying bills on time and reducing consumer debt. Other factors that are used in determining your credit score include the length of credit history (15 percent), the types of credit accounts held and recent credit applications (10 percent each). For these reasons, keeping older accounts opened, acquiring a mixture of accounts and limiting inquiries can give your FICO credit score a boost.

FICO and Approvals

    Having a high FICO credit score, also referred to as maintaining a good credit rating, is important when applying for loans and credit accounts. Applicants with no credit score or a low score are often denied credit due to their higher risk. Quite the contrary, someone with a good credit score and few credit issues (such as collection accounts and late payments) may qualify for easy financing to purchase an automobile, buy a home or acquire another type of loan.

FICO and Interest Rates

    In conjunction with determining whether someone can get a credit or loan approval, having a good FICO score influences the interest rate on different loans and credit cards. A score of 700 or higher generally indicates a good history of bill payments. Being a low-risk applicant warrants a lower interest rate; and because lower rates decrease monthly payments, having a good FICO score can increase buying power when financing a house or car.

Alternative Financial Solutions

Alternative Financial Solutions

Personal finance can sometimes get away from you if you do not have a plan or stay with a plan you do have. When you find yourself in a situation where your monthly obligations may be overwhelming your income, the thought of a debt consolidation loan may come to mind. But alternative financial solutions can help you get your debt back under control without having to take out a loan.

Follow a Budget

    Financial problems can arise when there is no plan on how to spend or save money, according to the article "Debt Elimination Tips" on the financial website The Digerati Life. Track your spending for a month by saving all of your receipts and writing down every purchase you make. At the end of the month, analyze your spending and cut unnecessary purchases. For example, if you buy a cup of coffee on the way to work every morning then you can save that money by bringing coffee from home.

    Bring all of your bills together and develop a budget that will tell you how much per month you pay in bills and allow you to see areas where you can reduce your monthly spending. If you have a cellular phone and a land line, you can save money by getting rid of one of them. Apply the money you have saved to your bills, and you will begin to reduce your debt.

Extra Income

    One of the ways you can address your financial problem without taking out a consolidation loan is to inject more income into your monthly budget. Take on a part-time job for a few hours a week, or ask if your company is offering overtime that you can take advantage of. Try your hand at online auctions and sell some of your unused belongings for cash. Find any way you can to generate more income, and apply that extra income to your bills.

Call Your Creditors

    If you analyze your credit card bills, you may see that for some accounts you have an interest rate exceeding 20 percent. According to The Motley Fool financial website, you should call those creditors and ask to have your interest rate lowered. It seems simple, but it also never hurts to ask. Let the creditors know that you will transfer your balance to a different card if they do not help you out. The end result will be less interest you will have to pay, a lower monthly payment and more money you can apply toward your bills.

How to Get Out of Debt to Raise a FICO Score

How to Get Out of Debt to Raise a FICO Score

Most consumers carry debt from mortgage loans, auto loans, student loans and credit cards. However, debts such credit cards can harm your FICO score if you carry a large balance. Thus, it's wise for you to keep these debts to a minimum. Paying down your credit cards increases your available credit, and as your available credit goes up, so does your FICO score. Debt doesn't have to linger. There are several ways to quickly eliminate outstanding balances and raise your credit score.



    Bring in extra income. It's difficult to eliminate debt when you're living paycheck to paycheck. Explore ways to earn extra money, such as getting a job on the weekends, or asking your boss to let you work overtime. If you have special skills or talents, turn them into a side business. Put all your extra money toward getting rid of debt.


    Get rid of credit cards. Don't close out your accounts; that decreases the length of your credit history, which damages your score. Instead, cut them in half or remove them from your possession. You're less likely to accrue additional debt when credit cards are inaccessible.


    Use whatever extra money you have to pay down your debts. Rather than spend the extra $300 a month you have on entertainment and shopping, use this money to knock down the balance on your credit card. Consistently making higher payments helps get rid of debt faster.


    Ask credit card companies to lower your interest rate. A lower rate decreases the amount of interest you pay on a credit card. In turn, the majority of your monthly payments will help bring down the principal balance. A lower balance equals a better credit rating.


    Take money from your emergency funds. High-interest debts can linger for years. Tap your personal savings, if applicable, and use this money to eliminate debt and raise your FICO score.