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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..

Wednesday, February 29, 2012

How to Increase a Credit Score in 30 Days

Managing credit card debt, especially in today's economic tempest, is extremely difficult. Low credit scores can amount to failed attempts to purchase cars, buy houses or even rent aparments. However, there are practical steps for increasing your credit score in just thirty days. Even better, it may not even force you to eliminate one penny of your debt.


Analyze Your Current Credit


    Acknowledge where you are with your credit score. Fortunately, this process is free. Access the Internet and head to FreeCreditReport.com (see Resources below).


    Fill in the appropriate information and print out a copy of your report. Your FICO score will be listed. A FICO score is merely a credit rating based on an amalgamation of activity in your credit history. Late payments, large balances and number of credit card accounts can all affect your credit score. But, at this point, simply make a note of the score. Anything above 700 is good; below 700 and there is some room for improvement.


    Print out the report and keep it handy so you can access it when needed.

Jack Up That Score


    Find a new credit card with a low interest rate. One reason a credit score may be low is because your balance is too close to your credit limit, making it appear as if you are stretching yourself too thin. While it may seem counterproductive, opening another credit card may be your best option in this case. At LowerMyBills.com, you can find a variety of credit cards that offer 0 percent APR on transferred balances for up to a year (see Resources below). Transferring part of your balance to another card will open up the gap between your balances and your limits and may even lower your monthly payments.


    Set up an automatic payment plan. Automatic payments each month insure that your bill is paid on time every single month. Pay on time all the time and that will immediately begin to fix your credit rating.


    Pay off any balances you can. If you can afford to pay off the balance of one of your cards, do it. However, do not close the account. Having lines of credit available to you, whether you use them or not, along with a long credit history, reflects positively on your credit rating.


    Stop spending! An immediate hold on spending can keep you from raising your balances and thus affecting your credit score negatively. If you can't pay off your debts, a halt to spending can at least keep them from rising.

Rules for Wage Garnishment Attachments

Rules for Wage Garnishment Attachments

If you have to default on a loan because you have no way of paying it, both federal and state laws provide you with some protection. A creditor cannot take all of your wages or salary; the creditor must leave you with something to pay your regular bills and enough wages to live on. Generally, a creditor will garnish your bank accounts before attempting to attach your wages. When a creditor attaches your wages, it collects on your debt by a little bit each pay period. Garnishing bank accounts usually results in larger, immediate sums.

The Process

    A creditor cannot garnish your wages until he has received a judgment against you for outstanding debt; this judgment must be issued by a court. Once your creditor has obtained a judgment, the creditor can then petition the court for permission to use that judgment to garnish your pay. The creditor then sends the judgment and the wage garnishment order to your employer, who is obligated to deduct a certain percentage from your paychecks and send the money to the creditor.

How Much Can Be Garnished

    The amount deducted from your pay depends on a few different factors. First, a creditor can only garnish your "disposable" income. According to the Internal Revenue Service (IRS), this is the amount left over after taxes, Social Security and other mandatory deductions. Once your disposable income is determined, the creditor can take either 25 percent, or all your pay over and above $217.50, whichever is less. If your after-tax net pay is $500 per week, your creditor can take $125 of that, or 25 percent, and leave you with $375. If he instead took everything you earn in excess $217.50, or 30 times the federal minimum wage of $7.25 per hour as of the time of publication, your creditor would get $282.50 each pay period. Your creditor would be limited to the lesser amount under the Consumer Credit Protection Act (CCPA), or $125, 25 percent of your pay.


    If you owe back child support and your state gets a garnishment order against you, the CCPA provides you with less protection. In this case, the law allows garnishments of between 50 and 55 percent if you have other dependents besides the child you're paying support for, and between 60 and 65 percent if you do not, depending on how far behind you are. If you owe taxes, the garnishment rate is usually 25 percent, with no considerations for current minimum wage.

Employer Restrictions

    Your employer can't fire you if someone garnishes your wages, at least not for the first debt. If he does, he's subject to a $1,000 fine as of the time of publication. However, if it happens again and two creditors have garnishment orders against you for two different debts, your boss can let you go, according to CCPA rules. If your individual state's laws result in less of a garnishment than CCPA rules, your employer must use those guidelines instead.


    You can prevent garnishment by paying your debt within 10 days of the garnishment order, but for many debtors, this simply isn't possible. Another option is filing for bankruptcy protection. Your creditor would then be subject to an automatic stay against doing anything to collect from you, so it would have to lift the garnishment. Although taxes, child support and student loans are not dischargeable in bankruptcy, eliminating other debts might allow you to catch up on child support. Even though you would still owe your taxes, if the IRS is garnishing you, bankruptcy does stop wage garnishment.

Tuesday, February 28, 2012

How to Pay My MasterCard

How to Pay My MasterCard

Having a MasterCard doesn't mean you can pay your bill directly through the MasterCard website. One of the most popular credit cards in America, MasterCard is issued to consumers by hundreds of different sources, including banks like Chase and Internet sites like PayPal. Paying your MasterCard means knowing where the card was issued and what methods of payment it will accept. Have your bank account information ready when it comes time to pay your card.



    Consult your customer agreement to see when your MasterCard payment is due every month. Your customer agreement should indicate the ways you can pay your bill and the accepted methods of payment. A due date should also be on every bill you receive.


    Write a check or money order made out to your MasterCard provider in the amount you want to pay. Pay at least the amount due every month.


    Send the payment in the envelope that comes included with the bill. Take it to the post office and get a delivery confirmation to be sure your payment arrived in time for your due date. As a rule, try to send your MasterCard payment at least one week before the due date.


    Log on to your online account with your MasterCard provider. Either create an account or use the username and password you already have. Pay the bill by entering your bank's routing number and your checking account number or by using your debit card.


    Call the phone number listed on your bill to pay over the phone. Use your debit card or checking account number to complete a phone payment.

Monday, February 27, 2012

What Is Irredeemable Debt?

What Is Irredeemable Debt?

The concept of irredeemable debt in the United States is something that has had an effect on our economy, as well as on how we are capable of using our money in general. Today, countries around the world operate their finances on this principle, as it has taken precedence over the gold standard as a way of ensuring a country's wealth.


    If something is irredeemable, it cannot be bought back or paid off. In the case of irredeemable debt, what cannot be bought back is money. This refers to the standard currency that is printed by the government of the United States and other countries around the world. In short, the money is irredeemable because it cannot be backed up dollar for dollar by other wealth possessed by that country. In most cases when money was redeemable it was backed by gold.

Gold Standard

    Prior to 1971, the United States followed what was referred to as the "gold standard." Most well developed countries of the world also followed either the same or a similar method. Each country chose to print a certain amount of money in conjunction with their gold reserves. Countries set different prices per ounce of gold; therefore, depending on what that was, their dollar could be worth more or less in comparison to other countries. Debt was redeemable at this time in the sense that the government had gold in reserve to buy back the currency in circulation. Printed money could be redeemed for its equivalent in gold.


    In 1971, amidst a recession, President Richard Nixon chose to take the United States officially off the gold standard. This was an attempt to allow the government to print more money to potentially aid in the stimulation of the economy. From this point forward, the United States has lived on the financial principle of irredeemable debt.

Flat Dollars

    Flat dollars are money printed by the government that are not backed by any other kind of physical wealth. The printing of flat dollars is what creates irredeemable debt. Since, by definition, the currency is not backed by gold or other hard wealth, it cannot be redeemed for it.


    Since the divorce from the gold standard, the value of the United States dollar has declined significantly. This is due to many factors, the biggest of which being that the Federal Reserve now has the power to print as much money as it sees fit to maintain harmony. Dollars that are printed today by the government are backed only by the laws that state they are legal tender for goods, as well as the acceptance of citizens to use that form of currency for purchases.

GDP vs. Consumer Debt

GDP stands for gross domestic product, which is the value all goods and services produced in a certain period, such as a year, in the United States or another country. Consumer debt is the amount of debt that consumers have outstanding, excluding mortgage loans.


    The GDP can be used to determine whether the economy is growing or shrinking. An increase in GDP means goods and services are being produced in response to demand, and the economy is growing.


    You can measure GDP by the expenditure method. Simply add up all the money spent on goods and services within a specific period.


    The four types of expenditures are consumption, investment, government purchases and net exports. According to QuickMBA.com, consumption is the largest component. The investment category represents investments in fixed assets and inventory. Take government purchases and subtract transfer payments to get accurate government purchases. Exports minus imports are how net exports are calculated.


    Consumer debt was $2.5 trillion in the United States as of 2009, based on calculations by the Federal Reserve, according to Money-zine.com.


    Approximately 36 percent of consumer debt is revolving credit, says Money-zine.com. Credit card debt is the largest portion of revolving debt.


    The average consumer spends roughly 13 percent of his disposable income to pay down mortgage and consumer debt, according to Money-zine.com.

Can I Have My Wages Garnished for Not Paying a Debt in Michigan?

Michigan allows creditors to garnish your wages for outstanding debts. The creditor has to file a lawsuit against you in a Michigan court, and a judge has to find in favor of the creditor before a wage garnishment can begin. Creditors can also execute a garnishment of your state tax refund.

Garnishment Lawsuit Procedures

    A creditor has to file a lawsuit against you in a Michigan court, even if it has headquarters in a different state. Typically, the creditor will hire an attorney in Michigan to file the suit with your local county court. The creditor's lawyer must also officially serve you with the lawsuit paperwork. Lawyers will generally hire a local court process server or pay a fee to your county's sheriff department to serve you with the papers.

Garnishment Limits

    Michigan law allows creditors to garnish up to 25 percent of your disposable earnings. For garnishment purposes, your disposable earnings are those after state and federal tax deductions. Just as with federal laws, Michigan exempts income below 30 times the federal minimum wage from garnishment. For example if the minimum wage is $7.25 per hour and your employer pays you weekly, the first $217.50 ($7.25 x 30 = $217.50), less federal and state taxes, is exempt from garnishment.

Lawsuit Objection

    After you receive the lawsuit papers in Michigan, you have the right to object to the suit. A court will only accept your objection under certain circumstances. You may object if you already have a wage garnishment that exceeds the legal maximum, if you recently filed for personal bankruptcy, if the creditor did not properly serve you with the garnishment papers, or if your income is garnishment exempt.

Garnishment Expiration

    Garnishments expire after 91 days in MIchigan. If you pay off the debt before it expires, your employer completes Form MC 48 Final Statement on Garnishment of Periodic Payments and sends it to you, the creditor and the court. If the garnishment expires before you pay off the debt in full, the creditor has to file a new writ. A judge must approve this writ before garnishment can begin on the balance of your debt.

Saturday, February 25, 2012

Debt Elimination & Reduction

Our society is one that encourages debt, and this makes it especially hard to get yourself out of trouble and maintain your lifestyle once you find yourself in trouble. The temptation to rely on credit to help with "unusual" expenses or get you through a rough patch is one that will land you deeply in debt if you are not very careful.

Debt Reduction

    If you find yourself deeply in debt, reduction should be your first concern. First, you will need to create a budget to deal with your finances and prevent yourself from getting further in trouble. Once you have a list of your expenses, be very tough with yourself in cutting any expense that you can reasonably live without. Make yourself uncomfortable -- it will pay off -- but make sure you can stick with it. Start making minimum payments on all of your credit cards, except the one with the lowest balance. Apply every extra cent from your budget cuts to that credit card balance. Once it is gone, start applying all of that money to the next lowest balance. Whatever you do, do not start charging things to any of your credit cards. You should now be living exclusively on cash and debit, and if you can't help yourself, stop carrying your plastic. If your credit is good, consider consolidating your debt in a low interest personal loan. This will reduce the amount of interest that you pay, and will help you make one payment.

Debt Elimination

    Debt elimination is best done by making regular payments on your credit card and other debt until the money is paid back, however there are companies that promise quick debt elimination or an instant reduction of your debt. This kind of debt elimination can be damaging to your credit score since the transaction is listed as "forgiven" rather than "paid," but if you are on the verge of bankruptcy, it could be the best option for you. Consumers can't negotiate with credit card companies for debt elimination on their own, so contact a reputable debt elimination company through the National Foundation for Credit Counseling (see Resources). If you would rather work on interest rate or debt reduction, contact your credit card company and ask them for the loss mitigation department.

Extreme Measures

    While most debt can be reduced or eliminated in a reasonable amount of time with hard work and by sticking to a good plan, some debt may require more drastic measures. With large amounts of debt, or to pay off a mortgage quickly, some people take second jobs and apply every cent of the extra paychecks to their debt, plus as much of their regular paycheck as they can spare. Things like cable television, Internet, and snack foods can be cut, as well as new clothing or expensive haircuts and coffee drinks. Nothing is off limits for the extreme budget slasher except things that you literally cannot live or work without. Most financial experts do not recommend stopping savings or retirement to pay off debt, but it is not uncommon to take that step to truly get out from under debt.

How to Fight a Debt Collector in Court

By understanding the finer points of consumer protection law, you can turn the tables on debt collectors in court and fight to have an incorrect or incomplete debt discharged. Consumers fighting a debt collection claim have various options, including arguing the case in court for a final judgment. Properly preparing your case can improve your chances of winning the case and having the lawsuit overturned.



    Comply with the instructions printed on the court summons, which may require a telephone response or a written response before an appearance in small claims court.


    Understand consumer rights and debt collection. The Fair Debt Collection Practices Act (FDCPA) outlines the ways in which a debt collector can collect a debt. Incorporate examples of deceptive collection practices into your defense.


    Raise a defense and argue your case before a judge. Your defense explains to a judge why you have not paid the full amount due. Defective merchandise, bankruptcy discharge of debt and expired statue of limitations are examples of legitimate reasons. Cite examples of FDCPA violations including threats and harassing phone calls.


    Enter supporting documents into evidence. Provide copies, not original documents, in case of loss. Include documentation that supports your defense such as receipts, billing statements, canceled checks, settlement letters and bankruptcy filing records. Taped phone conversations may be admissible in court. Only 35 states and the District of Columbia allow you to secretly tape phone conversations, so research the law before doing so.


    Submit a counterclaim if you believe the debt collector owes you money. If a debt collector has failed to credit your account for a debt you've already paid, ask the court to cancel the debt collection and order the debt collector to credit your payment.

Friday, February 24, 2012

Does an IRS Bank Account Levy Appear on a Credit Report?

Does an IRS Bank Account Levy Appear on a Credit Report?

Don't bother trying to ignore a debt to the Internal Revenue Service because the federal government doesn't just give up. If the IRS has levied your bank account, you've already ignored the debt too long. A levy won't appear on your credit record, but it will hurt you financially and can have long-lasting repercussions.

Bank Levy

    A bank levy is a debt collection tactic the IRS uses after getting you to pay your debt on your own has failed. The bank levy is a one-shot deal, notes the website JK Harris, meaning the IRS can't levy your account day after day until the debt is settled. What it can do is seize your deposits. Whatever your balance and deposits are on the day of the levy will be confiscated by the IRS. Your bank holds that amount of money for 21 days while ownership of the account is verified, then sends it to the IRS. The IRS won't confiscate more than what you owe.


    A bank levy doesn't hurt your credit report because the action isn't reported to the credit bureaus. You'll be responsible for any debits or checks that bounce due to the levy. The IRS will only refund that money to you if it applied the levy in error. If the levy doesn't clear your debt, the IRS can take further action, such as attaching the debt to your wages and property or garnishing future tax returns.


    If the amount you owe the IRS is significant and the levy didn't clear it, the IRS will come after your paycheck and belongings. This is called placing a lien on your possessions, and liens do affect your credit score. Not only are they reported to the credit bureaus, they are reported to your creditors. A lien placed on your paycheck can remove up to 70 percent of it, says JK Harris. The IRS can even seize Social Security payments and retirement accounts to settle your debt.

You Have Options

    You don't have to let it get this far. The IRS is willing to work with anyone who owes back taxes. You can pay your balance in full as soon as you receive the notice in the mail or establish a repayment plan that suits your finances. Anyone interested in doing this can submit an online payment agreement application through the IRS website. (See Resources.) If you're facing financial hardships and can't make a payment, submit an Offer in Compromise. This is a request to reduce the amount you owe to a payment you can handle in your present circumstances. The payment can be made in a lump sum or installments. A $150 application fee applies unless you fall within federal poverty guidelines.

How to Report Credit Card Fraud to Credit Bureaus

How to Report Credit Card Fraud to Credit Bureaus

Identity thieves are known for stealing personal information and attempting to establish credit in someone else's name. If you suspect that you have been a victim of fraud, it is best that you notify the credit bureau immediately. There are several types of fraud alerts that you may place: a 90-day fraud alert, an extended fraud alert or an active military duty fraud alert. After the alert is placed, creditors are required to verify all information before offering credit to anyone requesting credit in your name.



    Request a copy of your credit report from all three agencies: Transunion, Experian and Equifax. Review it for any fraudulent activity or suspicious accounts.


    If you have been a victim of fraud, contact the police and request that they provide you with a written report. Be prepared to submit this report to the credit reporting agency to verify your complaint.


    Choose the type of fraud alert you would like to place. If someone has gained access to your personal information, such as your social security number, a 90-day alert places notification that you have been a victim of fraud. If the lender can't verify that you have authorized the request for credit, credit will not be extended. You may also place an extend fraud alert which works the same as a 90-day alert but it protects your credit for seven years.


    Request an active duty alert if you are being deployed by the armed services. This alert protects your credit from fraudulent activity while you are away.


    Contact Equifax to request the alert be placed. Once you contact Equifax, the other two agencies, Transunion and Experian will automatically be notified. Contact Equifax by telephone at (800)-525-6285 or submit a request online using Equifax's online fraud alert request form.


    You may also send a request in writing to: Equifax Information Services LLC P.O. Box 105069 Atlanta, GA 30348-5069. Submit a letter advising the agency that you have been a victim of fraud and that you wish to have an alert placed on your account. List any suspicious accounts on your report that you didn't authorized.


    Be prepared to submit your proper identification, including your name, address and social security number with the fraud alert request. Expect the request to be placed on your credit file within 48 hours of receipt of the request.

Disadvantages of Credit Settlements

If you're got a lot of credit card debt and you're unable to meet your minimum payments, a credit settlement might sound like an appealing option. After all, the constant advertisements on TV and radio make it sound so simple. However, there's a dark side to settling with your credit card companies that these ads don't tell you about.

Credit Settlement Basics

    In a credit settlement, you or an authorized representative work with the credit card companies to come to an agreement regarding your balance. In some cases, you can resolve your balances by paying less than what you currently owe. The prospect of reducing your principal balance is a huge appeal of credit settlements; however, there are serious consequences that can be realized by going this route.

Creditor Harassment

    The most immediate consequence of a debt settlement is that you're likely to receive collection calls and letters from the credit card companies. Since credit settlement agencies ask you to stop making your monthly payments in order to save for a settlement, you'll incur the wrath of your creditors, who will bombard you with requests for payment. Of course, missing these payments helps your cause in qualifying for a settlement. If the credit card company thinks it can get your money without settling, it has no reason to agree to a settlement with you.

Credit Implications

    Missing payments to prepare for the settlement also has a huge effect on your credit. Each late payment will be listed on your credit report, and if your accounts become more than 90 days past due, it sends a clear message to future creditors that you are a credit risk. Also, the accounts you settle will be reported as such; that is, your credit report will show that you failed to honor the original terms of your credit agreement, which is another huge red flag that can prevent you from obtaining credit in the future.


    Credit settlement companies advertise that they can settle your debt for a percentage of what you currently owe. However, the reality is that what you currently owe may be far less than what you'll owe at the time of settlement. All of the late fees and over-the-limit fees you rack up during the settlement process will be your responsibility; you'll also owe fees to the settlement company you work with and you'll also owe taxes on the settlement amount. In the end, you might end up owing more than you owe now, even if you're able to settle.

No Guarantees

    The biggest disadvantage of credit settlements is that there are no guarantees. Just because you fall way behind on your bills and just because a settlement company promises you the world doesn't mean the credit card companies will agree to settle with you. In fact, not only can your credit card company refuse to settle, but they can also sue you for late payments. There's a very real chance that you could come out of the settlement process far worse than you were when you initially considered settling.

How to Avoid Balance Transfer Fees

How to Avoid Balance Transfer Fees

Balance transfers were great back in the easy-credit days of yore. With 0% credit card offers and no-fee balance transfers you could move balances around without issue. Now that the economy has contracted, balance transfer fees are back in the 2-5% range and 0% interest offers are getting harder to find. However, there is a method that can get you around the balance transfer fees and help you pay less on your existing credit card debt.



    In a previous article, I demonstrated how it was possible to arbitrage a credit card using the US Mint's Direct Ship Program. This form of arbitrage effectively amounts to a free loan from the Mint which you can use to invest in high interest accounts or obtain credit card rewards. To summarize the process, you simply need to go to the Direct Ship Program's web page and purchase 1 or 2 boxes of Presidential Dollar coins with your low interest credit card. The Direct Ship program offers free shipping at this time and the coins usually arrive within 1 week of purchase. Please see my previous article in the resources section if you want a detailed outline of how this process works.


    Once you have received the coins from the US Mint, simply put the money in your bank account and use the funds to pay down the balance on your high interest credit card. Voila! You have effectively transferred the balance of your high interest credit card to a lower interest card via a purchase of legal tender from the US Mint. And no balance transfer fee was paid!


    Even though banks have increased the fees and interest rates on credit cards, balance transfers are still a useful way to manage your credit history. Just remember to keep the ratio between the amount of credit available and the amount owing as low as possible, and always make your payments on time. The length of your credit history also affects your score so don't close the account if the high interest card you are transferring the balance from is old. Just leave it open with a zero balance and your credit history should remain unaffected.


    Finally, you should consider looking for fixed interest rate loans or lines of credit rather than low interest credit card offers if you need to consolidate debt over long periods of time. Most low interest credit card offers only last 6-12 months in this market and then they usually sky rocket up to 18+%. You would be much better off with a 5-7% fixed interest loan in such a situation.

Thursday, February 23, 2012

Best Ways to Pay Off Large Credit Card Debt

Best Ways to Pay Off Large Credit Card Debt

Many conditions can lead to large credit card debt, including unemployment, unexpected medical expenses, or living beyond your means. While having some credit card debt may be beneficial, as lenders like to see the responsible use of credit, having excessive credit card debt leads to falling credit scores, rising interest costs and sometimes inability to pay. There are different strategies to handle paying off large credit card debt, and some are more appropriate than others depending on the debtor's personal situation.

Lump Sum Payment

    To promote long-term financial stability, and the most beneficial outcome for your credit score, the ideal way to get out of large credit card debt is to pay it off in one lump sum. As soon as the debt is paid off, interest and fees stop accumulating. The freeing up of additional credit can improve credit scores, enabling lower interest rates on any future loans.

Debt Prioritization

    Prioritize debt by designating the largest payments toward the highest-interest credit cards. Doing so will shrink overall debt faster.


    Contact creditors to negotiate smaller balances in exchange for promises to pay over a certain period of time. Creditors are often willing to do so, especially in a time of rising defaults. At the very least, negotiate lower interest rates, which over time result in lower account balances.


    Consolidate credit card debt into a monthly payment plan, either through direct discussions with creditors or through the use of outside debt restructuring companies. While restructuring companies may be able to consolidate overall debt balances more easily, fees for this service are often steep.

Late Payments

    Consider debt-reduction negotiations with late payments pending. Resolutions in these negotiations often are more easily accomplished after an account is 60 or 90 days late. Creditors must write-off a debt once the debt ages 6 months without payments, so the more likely it seems that a company will receive nothing for an outstanding debt, they more likely they are to take a lesser payment. This course of action, however, can prove damaging to an account holder's credit report.

401(k) Loan

    Debtors who have a 401(k) retirement plan can consider borrowing up to 50 percent of the value of the account for emergency needs, for which excessive debt generally qualifies. Principal and interest are paid back to the investor's account rather than to the credit card companies.

How to Request Credit Report When Turned Down for Credit

When you apply for a loan or a credit card, you may not always get a positive response from the creditor. Based on the information they receive from one of the three major credit reporting agencies--TransUnion, Experian, and Equifax--they may turn you down. Under the Fair Credit Reporting Act (FCRA), you are entitled to receive a free copy of your credit report from the agency consulted by the creditor. With this credit report, you can check for errors in the report and discover what might have led to the rejection.


Getting Your Free Credit Report


    Learn which credit reporting agency provided the information. Creditors receive information from one of the three agencies to make their determination. You will receive a notification in three to seven days following the rejection explaining why you were denied and telling you which agency provided the information used to make the decision.


    Contact the specified agency. If you act within 60 days, you can receive a free copy of your credit report from that agency. The notification letter should include the address, phone number and/or website of the specific agency.


    Review your credit report. If your request is made online, you will receive immediate access to the information. If you make the request in writing or over the phone, you may need to wait several days or weeks to receive the report. When it arrives, carefully review the information included, looking for errors.

If a Car Is Towed Off Street Due to Expired Registration Tags, Would it Show on One's Credit Report?

A car that is unregistered or that has an expired state registration parked on city streets would definitely be considered an eyesore by most communities, and the municipal government would probably take action to remedy the situation, according to the local laws. These laws may impose a fine for each day the vehicle was parked, and if you did not pay the fine, it could cause problems.

Impound Fees

    It is unlikely that an unregistered vehicle parked on city streets would be towed off the first day, or even the first week that it was sitting in one location. Your city likely has laws that specify how long the vehicle may be left on the street before a fine is imposed. Some cities even prohibit parking an unregistered vehicle in your driveway for longer then a certain time period. If the city determines that your on-street parked vehicle is in violation of the law, they will probably have it towed. The tow-truck operator is allowed to impound your vehicle to secure payment for his services and the fines.

Taking Possession of the Vehicle.

    With your vehicle in impound, you will need to pay the towing company for their expenses before you can pick up the vehicle. In addition, you may have to pay any fines the city has imposed on you for this violation. If you do not pay these bills, either the city or the towing company can take legal action to obtain the title of the vehicle and then sell it to recoup their expenses. In some areas, this title transfer may appear as a public record, but it would not be unlikely your credit report would list this as they don't routinely review vehicle transfers.


    If the towing operator has a remaining balance due after the car is sold, it will probably send this bill to a collection agency after a certain amount of time. The city or state imposing fines for this violation is also likely to seek the assistance of a collector as well. Cities look at these fines as unpaid bills that need to be collected. The collection service may give you a short time to pay the bill, but then they will likely list it with the credit reporting agencies as a collection account.

Other Considerations

    It would be best to take care of this type of problem before the bill gets in the hands of the collector. You may be able to work out a deal with the towing operator where he may accept the title of the vehicle that you sign over as payment in full for the bill. Perhaps he would even pay you enough for the car to settle any fines you have incurred for the unregistered vehicle. Regular communication with both parties, and even a payment arrangement, may keep the incident off of your credit report.

Wednesday, February 22, 2012

How to Negotiate a Settlement With Chase

How to Negotiate a Settlement With Chase

Credit card debt plagues the homes of countless Americans. During these difficult economic times, many people have found themselves owing more on their credit cards than they are capable of paying each month. Fortunately, negotiating a settlement with a credit card company is a common practice that can yield positive results and eliminate stress. Making the effort to negotiate with Chase (or any other creditor) can have a less dramatic effect on your credit score than defaulting.



    Determine the balance you owe on your credit card. You can find the balance on your monthly statement or by logging onto your account (see Resources). Of the balance you owe, determine how much you would like to try and settle for. Credit card lenders will often settle for 40 to 50 percent of the debt.


    Call Chase. When you reach a representative, pleasantly explain that you are experiencing unexpected financial difficulty. Request that they settle your debt for the amount that you predetermined. While remaining polite, make it clear that if they are unable to accommodate your request that you will be forced to take more dramatic measures and file for bankruptcy. If you reach an agreement with Chase, request that you receive a copy of the terms in writing as soon as possible. If Chase is unwilling to cooperate, consider enlisting the help of a debt settlement company.


    Find a debt settlement company. This is only necessary if you are unable to reach an agreement with Chase. Debt settlement companies will often be able to settle debt for 25 to 50 percent of what is owed. Be mindful of the fact that they charge for their services and will often require that their fees be paid up-front.

The Advantages of Revolving Debt

The Advantages of Revolving Debt

Revolving debt is an open-ended form of credit that is not required to be paid off by a certain date. Instead, you can carry a continuous balance and make only required minimum monthly payments. Common examples of revolving debt include credit cards and home equity lines of credit. Revolving debt can offer certain advantages over closed-end debt, although users must manage it carefully to keep it under control.

Ease of Access

    Revolving debt allows easy access to credit. If you have a credit card, you simply present it to a merchant when making a purchase instead of applying for a loan. You can continue to make purchases until you have reached your credit limit. If you have demonstrated you can manage the debt responsibly, your lender may increase your credit line with no action necessary on your part.

No End Date

    While there is normally a monthly due date for minimum payments, there is no finite end date to your revolving debt credit line. You could conceivably owe on a credit card for the rest of your life, assuming you continue to make any required minimum payments and fees in a timely manner. This makes it a useful tool to protect against unexpected financial emergencies where you need money quickly and may need time to pay it back.


    Revolving debt can offer a high degree of flexibility. Although you are required to make minimum monthly payments, the amount is relatively small when compared to your outstanding balance. On credit cards you may only have to repay 2 or 3 percent of the amount you owe each month. You can also make larger payments if you prefer or pay off your entire balance each month to avoid interest charges. There can be serious ramifications to not paying the amount of closed-end debt due each month or not paying off the entire debt by the end date, and sometimes prepayment penalties apply for paying more than the amount due each month.

Broad Use

    There are usually no restrictions as to how you use the money you obtain with revolving debt. If you tap into a home equity line of credit, where you borrow against the equity you've built up in your home, the money can be used for virtually any purpose. You can also use a credit card to purchase anything from a merchant that accepts your card. When you take out a car loan, on the other hand, the money you borrow only applies to financing the vehicle.

Tuesday, February 21, 2012

How to Rebuild Your Credit Fast

How to Rebuild Your Credit Fast

Credit challenges make even the simplest tasks, such as renting an apartment or getting a job, difficult. Even if your credit is less than stellar, there are actions that can rebuild credit quickly.Your credit score is comprised of several different categories. Focusing on the areas that make up the largest chunk of your score can make a significant impact on your credit rating.



    Order a copy of your credit report. The first step to rebuilding credit quickly is identifying problem areas. A free credit report can be ordered through Annual Credit Report (see Resources) every 12 months. Look for errors, such as unfamiliar accounts. Also, look for a track record of late payments, high credit balances and reports of collection activity. Make a list of the areas that need improvement.


    Create a plan for making timely payments. According to MSN Money, payment history makes up 35 percent of your credit score. Simple actions, such as setting up automatic payments with your bank, will ensure you rebuild your credit.


    Evaluate revolving credit balances (such as credit cards or home equity lines of credit). If you have a balance that exceeds 30 percent of the available credit, it's hurting your credit score. Focus on paying down balances on revolving credit lines. For example, if your credit limit is $10,000, aim to get your balance below $3,000.


    Avoid closing out old credit card accounts. Credit history length accounts for 15 percent of your total credit score. Leave old credit card accounts open. Monitor activity through your credit report (to ensure there isn't fraudulent activity). If you decide to use the account, pay it off monthly.

How to Turn Your Bad Credit Score Around

Turn your bad credit around and improve your chances of qualifying for low-rate financing deals. Bad credit can happen after you lose a job or deal with an illness because you may fall behind on payments or rely on credit card to make ends meet. However, regardless of the cause of credit issues, you can turn your bad credit around.



    Set up alerts to remember to pay your bills on time. Manage your accounts online and/or through your smartphone and request payment reminders a few days before your due date. Mailing a bill late or forgetting to pay a bill can hurt your score. Pay credit cards and loan statements on time each month to help turn your bad credit around.


    Erase consumer debt or pay down balances. Ideally, balances on credit cards should not exceed 30 percent of your credit limit. Use cash for purchasing items and reserve credit cards for emergencies.


    Review your credit report at least once a year to check for errors or problems. Identity theft, credit mistakes and other errors can have a negative impact on your score. Get free reports from AnnualCreditReport.com.


    Work with creditors and collection agencies to pay off or satisfy debts and help turn around your bad credit. Creditors report collection accounts, charge-offs and judgments on your report, and these unpaid negative items lower your score and affect loan approvals.

Monday, February 20, 2012

How to Pay Off My Bills Before Death

Bills and debt don't disappear when a debtor dies. This responsibility falls on surviving loved ones, and for this reason, many people have life insurance policies to help pay personal expenses after death. But if you don't want loved ones to worry about bills and debt after your death, take steps to pay off balances now.



    Get rid of credit cards. Regular credit card use can slow efforts to pay off bills. Take credit cards out of wallet and purses, and then use scissors to destroy the cards. Begin using cash and save before buying.


    Ask for a lower interest rate and then increase your payments. Get on the phone with creditors to see if you qualify for a cheaper interest rate on credit cards. Getting a lower rate reduces how much you spend in interest each month. With this lower rate, pay more than minimum to get rid of debt faster.


    Negotiate to settle older debts. Delinquent accounts such as unpaid judgments and collection accounts may resurface after death. Deal with these accounts now and contact old creditors or collection agencies to negotiate a debt settlement. Negotiate low and offer to settle debts for less than you owe. Know how much you can afford first, and then offer this amount. Start negotiations around 20 to 25 percent of the outstanding balance.


    Sell assets to create additional income. Eliminating a few material possessions such as extra cars, a vacation/rental home, clothing, jewelry and electronics can produce enough cash to get rid of your bills.

How to Cash a Check at a Check Cashing Store

How to Cash a Check at a Check Cashing Store

Many banks will not cash your check if you don't have an account, so you may need to go to a check-cashing store. These businesses cash a variety of checks, from personal and cashier's checks to Social Security, pension checks and income tax refunds. You need the proper identification and there will be a fee depending on the type of check cashed. Policies vary between stores based on the type of check, the customer and other factors.



    Call several check-cashing stores and compare terms and fees, which vary from store to store. Some stores charge fees of 1.5 percent of your check amount for business checks, 10 percent for personal checks, 3 percent for government checks and 6 percent for cashier's checks.


    Pick the store with the best deal and go there. Tell the representative what type of check you want to cash. Present valid photo identification--state identification, driver's license, passport, or military identification. Fill out a customer record card, which includes your name, address, and phone number, place of employment and frequency of pay periods. There may be a minimal new-customer fee of about $3, depending on the store.


    Wait for the representative to verify that the check is valid. If you are trying to cash a personal check, the representative must speak to the person that issued the check and will call the bank to verify that the check is good. Social Security and other checks have to be verified as well. The verification process can vary from store to store, but most will call the bank to confirm the funds are there. This helps cut down on instances of fraud. If for some reason they cannot verify that a check is good, they will not cash your check.


    Take your funds. When verification is complete, the representative will give you the cash minus any fees. If you visit the store in the future, they will have a record of your information on file and the process will be a little faster.

Sunday, February 19, 2012

Money Rules for Debt

Money Rules for Debt

Money and credit are what drives the world and using these tools effectively will make your own life financially sound. Consumers who follow common sense money rules for debt avoidance will reject the temptations of instant gratification that credit cards offer, and make use of good debt that can pave the way for a comfortable retirement.

Living Beneath Your Means

    The essential rule of smart debt management is to live on a budget that's beneath your means. Lenders often approve credit lines and loans that are much greater than you can actually afford to spend. Just because you were approved for a $5,000 Visa card doesn't mean you should charge it up every month, even if you can pay it off in full. Saving toward a rainy day fund is a wiser use of your spare funds, and will come in handy in the event of an emergency -- or investment opportunity. Plan to set aside six months of emergency funds, if possible.

Mortgage Debt

    Examine the debt rules that mortgage underwriters consider when reviewing home loan applications. These rules, known as front- and back-end ratios, provide a framework for the maximum amount of debt that a consumer should have, given income constraints. The rules state that no more than 28 percent of pretax monthly income should be used for housing -- including taxes, insurance, and association fees. This percentage isn't the target, rather it's the maximum amount allowable and is the front-end ratio. Borrowers usually have other debt, therefore the total of the housing debt plus other debts shouldn't exceed 36 percent of pretax monthly income. This is the back-end ratio.

Credit Card Debt

    The temptation to overspend with credit cards can be overwhelming. Do yourself a favor and keep your limits small. Don't use more than 30 percent of your credit limits, and train yourself to walk away when tempted with an impulse purchase. Avoid charging essentials. Always pay your bills on time, and preferably, in full. Keeping your credit score high earns you the most competitive interest rates on mortgages and auto loans, two common types of good debt.

Retirement Versus College Savings

    College costs can easily exceed $200,000 for America's top private schools. However, sound debt management states that you shouldn't borrow more than what the student can expect to earn in the first year of employment. Is your student willing to pay possibly tens of thousands of dollars toward his education? If not, consider your question answered. Put your savings toward your own retirement first, and college, second. You may be able to borrow against your 401k for college at an interest rate that's lower than what a bank would offer and you'll be paying interest to yourself instead of a bank.

Paying Off Debts

    Pay your highest interest loans first; this approach saves the most in interest charges. Ramp up your monthly payment on one debt only by making much larger monthly payments while paying the minimum on the others. When the first debt is paid, add that payment to the next debt. Common sense money rules are all about modesty, patience, discipline, and delayed gratification. Practice these traits and your reward will be a comfortable retirement.

What Are the Positives & Negatives of Having a Debit Card?

What Are the Positives & Negatives of Having a Debit Card?

Debit cards, also known as check cards, have both positive and negative points. Debit cards look like credit cards, but they are linked directly to a checking or other bank account. They can be used similarly to credit cards to make purchases, or they can be used to withdraw cash from an ATM.

Obtaining a Card

    One positive of debit cards is that they are easy to obtain. They are often issued automatically with a new checking account. so there is no credit check that would disqualify you from obtaining a card. The negative side of this is that you are limited to accessing funds available in your bank account--there is no additional credit available.

Debt Managment

    Since a debit card is linked to a checking or other bank account, it is very easy to control spending and avoid going into debt. Unlike a credit card, with a debit card you only have access to the money in your account, so no monthly payment is required to maintain a debit card.


    If a debit card is used and the account is overdrawn, a bank may charge overdraft or insufficient funds fees. The amount of these fees varies by bank. In addition, banks may charge fees if the card is used at another bank's ATM. Some banks also charge a fee if the card is used to make a purchase using a PIN rather than a signature.


    If your card is lost or stolen, you may be liable for some of the funds taken. According to the New York State Banking Department, you are responsible for $50 of lost funds if you report your card stolen within two days. If you report the missing card within 60 days, you are responsible for up to $500. If you do not report the card stolen within 60 days, you may lose all money taken from your account.

Saturday, February 18, 2012

How to Protect Against Debt Collection Harassment in Minnesota

How to Protect Against Debt Collection Harassment in Minnesota

Ideally, creditors will work with you to create a payment plan. If you fall behind with payments, creditors send the account to an in-house collection department or employ a third-party collection agency. Although valid debt is collectible, debt collectors must provide proof that the debt is legitimate and follow Minnesota and federal laws protecting consumers from unfair practices. Under Minnesota law, debt collection employees must apply for and be registered with the state to perform collection activities within the state.



    Report unfair or deceptive debt collectors to the Federal Trade Commission and the Minnesota Attorney General's Office. Debt collectors are prohibited from calling you before 8 a.m. or after 9 p.m., calling repeatedly in a short time frame, using deceptive practices or otherwise harassing you. Debt collectors may contact people you know in an attempt to locate you, but they cannot discuss the debt with anyone but you or your attorney.


    Request validation of the debt and proof of your liability. Collectors must send a notice validating the amount owed and the original creditor's name within 5 days of first contact. However, disputing the debt stops collection actions for 30 days.


    Ask the creditor for proof of the last action on the loan. Minnesota law places a statute of limitations of 6 years on most consumer debt. However, creditors will not volunteer the information. Debts beyond the statute of limitations remain valid, but a debt collector cannot sue a consumer beyond that point. The statute of limitations begins when the last action was taken on the account or when the loan became delinquent.


    Stop collection calls. If a debt collector calls you at your job, they must stop if you tell them that your employer prohibits phone calls. In addition, consumers may stop collection calls completely by sending the collector a "no contact" notice. Once a creditor receives the notice, it cannot contact you again unless it is to notify you of further legal action. The "no contact" letter does not eliminate debt, and creditors may use other legal means to collect.


    Respond to lawsuits promptly, as neglecting to obey a court summons may result in a judgment against you. However, providing proof of financial hardship or income exemptions to the court may result in a judgment in your favor. Debt collectors may garnish wages and bank accounts with a court order. Excluding income exemptions, up to 25 percent of your wages may be garnished for outstanding debt. Income exemptions include most government benefits.

Thursday, February 16, 2012

Is There any Benefit in Having an Unsecured Loan Rather Than a Secured One?

Loans can be broken down into two types: secured and unsecured. A secured loan is a loan that is backed by collateral. In the event that the borrower defaults on the loan, then the lender can seize the collateral as compensation. An unsecured loan is a loan that is not backed by collateral. Although unsecured loans typically carry higher rates of interest than secured loans, they have several advantages to the borrower.

Less Complicated

    In many cases, taking out an unsecured loan is easier and quicker than taking out a secured loan. This is because when a person takes out a secured loan, the lender will often have to do research into the asset being used as collateral. The lender will often choose to have this asset assessed and appraised. By contrast, an unsecured loan includes none of this verification, which can often allow it to be approved faster.

Assets Not Tied Up

    Another large advantage to the borrower is that he does not have to turn over any of his assets to the lender. While some secured loans, such as car loans and mortgages, do not require the borrower to allow the lender to hold the collateral until the loan is paid off, some do. For example, when a borrower uses a secured credit card, he must keep a cash account with the lender.

More Difficult to Collect

    Unsecured loans are often harder for the lender to collect on in the event that the borrower does not pay off the loan. When a loan is secured by collateral, the lender will often have the right to simply seize the collateral in the event that the borrower falls behind in his payments. By contrast, to forcibly seize assets for an unsecured loan, the lender will first have to sue the borrower in court and win.

No Seizure of Property

    In the event that a lender does file a lawsuit against the borrower and receives an award of damages from a judge, it is very unlikely that he will be able to seize the borrower's property if the loan is unsecured. While the lender could, theoretically, garnish the borrower's wages or seize money from his bank account, it would be extremely difficult for him to seize physical assets from the borrower.

What Does the Credit Bureau Validate?

Each credit bureau maintains a database of financial records that makes up your credit report with that particular bureau. In the event that information on the bureau's report is inaccurate, federal credit reporting laws under the Fair Credit Reporting Act give you the right to contest the information's accuracy. The credit bureau must conduct a "reinvestigation" and attempt to validate the item.

Dispute and Validation

    Regardless of whether you file a dispute online or send a dispute via mail complete with thorough documentation that the item in question is inaccurate, the credit bureau assigns your dispute a code. It then forwards the code to the information furnisher that originally reported the disputed entry. It's up to the information furnisher to verify the accuracy of its original report to the credit bureaus. If the information provider's records indicate that the item was not reported in error, it will "validate" the entry to the credit bureau and the error remains on your credit report.

Potential Problem

    The problem with this method of validating information is that the credit bureau depends on the information furnisher to either verify or discount the disputed entry's accuracy. The information furnisher only receives a code -- not the full dispute. If the information furnisher's original records were incorrect and the entry is not the result of a computer error, the company will verify an error as an accurate report.

Consumer Options

    Consumers have the option of disputing errors directly with the information furnisher rather than through the credit bureau. Doing so allows consumers to provide the company that reported the error with the documentation it needs to correct its records. Once the information furnisher amends its own records, it will amend its previous report to the credit bureaus -- preventing the consumer from having to file a dispute with both the information furnisher and the credit bureaus.


    Many consumers, unaware of their rights to dispute errors directly with merchants, file repeated disputes with the credit bureaus for the same error. The law, however, gives the credit bureaus the power to refuse to reinvestigate information they previously validated. Thus, the credit bureaus mark repeated disputes as "frivolous" and do not investigate them.

    If you have new information about a previous dispute, you can contact the credit bureaus, provide the new information and ask that they reopen the previous investigation. If the original investigation is underway, providing new information gives the credit bureaus an additional 15 days under federal law to consider your information and investigate the accuracy of the disputed data.

Grants for Individuals to Pay Off Debt

Grants for Individuals to Pay Off Debt

When your debt is affecting your marriage, your job, your family or your sleeping habits, it's time to get help. Unfortunately, there's no easy way out, and advertisements suggesting that a free grant is the solution to your debt problem are lying. Don't despair; help is available for those who seek it. The solutions are low-cost, confidential and easier than you might think.

Grants: What They Can---and Can't---Do

    Both government and privately sponsored grants are godsends to those who qualify. According to the Department of Health and Human Services, "grants are not benefits or entitlements." Grants are used to improve the lives of citizens as ordered by legislation or private directive. If you need money to fund cancer research, money is available. If you're looking to pay your American Express bill, not so much.

    Grant assistance scams are so prevalent that the Federal Trade Commission has issued several warnings about falling prey to official-looking and sounding "programs."

If You've Already Applied

    If you've already applied for a debt relief "grant," run, do not walk, to order your credit reports. You're eligible to receive one free report per year from Equifax, Experian and TransUnion. If you don't recognize recent activity, such as a new account, call each bureau to report identity theft. Next, call your attorney general.

    Criminals have been asking "grant" applicants to provide bank account, credit card, and social security information to complete the application---except that they actually set up new accounts in your name. Real grant applications never charge a fee and never ask for personal data; if you are asked to provide it, don't.

Mortgage Help

    Although it doesn't technically qualify as "grant," the federal government does provide assistance to a homeowner who needs help paying his mortgage. Borrowers who have FHA loans are particularly lucky, since the "streamline refinance" is an easy way to lower your monthly housing debt payment. Known as "HARP," this program simply lowers the interest rate on the mortgage loan. Not convinced? Try the math: it can save hundreds of dollars, and that's just per month.

    The "HARP" program has encountered some stumbling blocks, but is worth pursuing if your loan is conforming (not a jumbo). If your lender is participating, your payment is lowered to 31 percent of your monthly pretax income on a trial basis; if you make timely payments, the modification is made permanent. Reductions are achieved by extending the term or lowering the principal or interest (sometimes, both).

Debt Repayment Options

    With the grant option extinguished, if you don't qualify for government mortgage assistance, you may be able to devise your own debt repayment plan. Choose your highest-interest loan and put every available cent toward its repayment; only pay minimum payments on the others. When that debt's paid, "snowball" the next loan's payment by adding the first loan's payment to it. This technique is referred to as the "debt avalanche."

    You can also opt for credit counseling. It's not government-sponsored, but it is recommended by the Federal Trade Commission as a way to legally repay your debts. Interest rates are reduced, and accounts closed, but made current. You repay the enrolled debts within five years.

Wednesday, February 15, 2012

How to Stop Wage Garnishment in Florida

How to Stop Wage Garnishment in Florida

Wage garnishment is allowed after a creditor has been granted a judgment by a court of law. A creditor is able to garnish wages based on the limits set by the state of Florida. Florida law allows 25% of wages to be garnished in most cases. Once garnishment is in place and established, filing bankruptcy can prevent further wage garnishment. The exception to this is in cases where your wage garnishment is due to child support.



    Consult with a Florida attorney who specializes in bankruptcy. Contact his office and schedule a time to have a free consultation to discuss the wage garnishment issue.


    Form a list showing all of your monthly income and outgoing expenses. Make copies of any court orders allowing the creditor to garnish your wages. If a judgment was issued by a Florida court, make copies of the judgment to give to the attorney.


    Meet with the attorney and discuss your situation and options. The attorney will review your information and inform you if filing bankruptcy is possible or if he has determined another way to stop the garnishment. Florida allows sole providers for the family to be exempt from wage garnishment as long as the garnishment is not for child support.


    Proceed in the direction you feel best after getting advice from the attorney. If you file bankruptcy, the attorney will contact the creditor to halt garnishment. If he can petition the Florida courts to alter the wage garnishment order, he will set up the court dates and advise you of the process.

Tuesday, February 14, 2012

Can You Negotiate a Payoff With Credit Cards?

If you cannot make payments on your credit cards, you may seek a way out of your predicament. One avenue is negotiating a payoff with your credit cards, so you do not have to pay the full amount but are no longer liable for your debt. While this may seem to be a better way out than bankruptcy, each type of debt settlement has its advantages and disadvantages.

Direct Negotiation

    If you want to lower the amount you owe on your credit cards, direct negotiation with your creditor may be your best option. Unfortunately, most creditors will be less likely to negotiate with you unless you have missed a few payments. Creditors "charge-off" debt after six months of non-payment, and most would rather collect at least something from you instead of sending a debt collection agency after you for repayment. Depending on your situation, you can ask for an interest rate reduction, a balance reduction or both. Typically, to receive a reduction in your balance you must make an upfront payment of the entire amount of the reduced balance. While creditors may be more likely to agree closer to the charge-off date, they are under no obligation to do so.

Debt Management

    A debt-management program is a type of payoff negotiation that uses the help of a third-party service. While the Federal Trade Commission warns that many debt-management programs may be deceptive, certain nonprofit counseling services can be of service. Essentially, a debt-management program negotiates with your creditors to lower or stop interest payments altogether if you agree to make a set monthly payment. While a monthly payment plan may work better with your cash flow than a directly negotiated upfront payment, you will have to pay the debt management service fees as part of your monthly payments.


    One of the major negatives of negotiating a settlement with your credit card company is that you will owe taxes on the amount of debt your creditor cancels. For example, if you negotiate your $50,000 debt down to $20,000, the IRS considers that $30,000 of forgiven debt to be taxable income.


    While you may consider bankruptcy to be your last option, or not even an option altogether, in some situations, it may make more sense than simply negotiating with your creditors. When you discharge your debts in bankruptcy, you do not owe taxes on the cancelled debt, as you do in a debt-management plan. While bankruptcy will damage your credit report, so will missing payments to your creditors and paying them less than you owe.

What Is a Credit Report Charge Off?

What Is a Credit Report Charge Off?

If you have bad credit due to the non-payment of debts, your credit report may contain one or more charge-offs. A charge-off on your credit will reduce your credit score.


    A charge-off is a debt that has become more than six months delinquent, without payment, according to cardreport.com. To creditors, a charge-off is written off as uncollectable.

Time Frame

    According to the Fair Credit Reporting Act, a charge-off will remain on your credit for up to seven years even if it is paid.

Paying Charge-Off

    Paying an old charge-off will update the status to a paid charge-off, but it will not remove it from your report. Even though the charge-off status will have been upgraded, it is still derogatory.


    Some debtors may negotiate on your behalf to have the charge-off removed from your credit report in exchange for a partial or full payment. If you do this, get the agreement in writing.


    Charge-offs on your credit will affect your credit in a bad way. It may prevent you from obtaining credit cards, loans or charge accounts.

Monday, February 13, 2012

How to Use Credit Cards to Improve Bad Credit Scores

Misusing credit cards can cause your credit score to drop like a stone. However, you can also use credit cards to rebuild your credit if you have a bad credit score. You must be extremely disciplined when you are trying to use credit cards to improve your credit score. If you let your spending get out of hand, you can completely ruin your credit.



    Sign up for a new credit card. Since you have bad credit, you'll probably only be able to get a credit card that is marketed to people with bad credit. This card will have a low credit line and a higher interest rate.


    Use the credit card to buy small things every month. Don't make more than $100 in charges, and make sure that you have the money to pay off the bill every month. If you overspend, you won't be able to improve your credit score.


    Pay off the credit card on time, but leave a small balance of $10 on the credit card. Credit agencies like to see that you have a line of credit and that you use it responsibly. Keeping a small balance on the credit card will show them that you know how to use credit.


    Get a better credit card as your credit score improves. Improving your credit score will make you eligible for better credit cards. These credit cards will have better interest rates and larger lines of credit.


    Pay off the first credit card completely once you have opened the second credit card account. Keep both accounts open, but only use the card with the better interest rates. Continue to charge a small amount and pay off almost all of the bill every month, and your credit score will improve dramatically.

Free Debt Elimination Advice

Free Debt Elimination Advice

Acquiring a debt-free life does not require using a debt-consolidation agency or other professional help. You can get rid of your debt free. And once you have cleared your debt, you'll enjoy a higher credit rating and better rates on loans and credit cards.

Higher Payments

    Minimum payments may reduce your principle on credit card, but it's not enough to put a significant dent in your balance. Plan to make higher monthly payments to reduce your debt and ultimately become debt-free. Pay off your $1,000 in as little as 10 months with $100 payments each month.

Savings Account

    You may hesitate to dip into your personal savings or emergency fund to pay off debts, but if carrying high balances and a high interest rate, using personal funds can quickly erase this burden, and you'll save money on interest payments. Devise a plan to replace the funds taken from your savings accounts.


    Having several hundred dollars of disposable income each month can quickly solve your debt problems. If your present income does not generate extra cash, check the classified ads for a part-time night or weekend job, or look for a better-paying full-time job. Earning an extra $125 a week adds $500 to your monthly income. This cash can pay off a $2,000 debt in four months.

Does Debt Consolidation Hurt Credit?

Does Debt Consolidation Hurt Credit?

Will Debt Consolidation Hurt My Credit Rating?

    The concept of how debt consolidation affects an individual's credit rating is complex. In the short term, depending on the method of debt consolidation, it may harm one's credit rating. This is especially true if the debt consolidation involves bargaining with creditors to arrange for a lump payment lower than the outstanding debt. Such debt consolidation tactics will lower a person's credit rating for the immediate future. In the long run, however, debt consolidation is almost always beneficial to a person's credit score.

How Will Debt Consolidation Help My Credit Rating?

    In the long run, debt consolidation will help a person's credit rating by making their monthly payments easier to make and easier to manage. Missed payments and many outstanding debts to various creditors are two things that can really harm a person's credit rating. Debt consolidation generally allows a person to pay a lower interest rate and to make only one easy-to-manage payment each month against their debt. Over time, if a person makes their payments on time and sticks to the debt consolidation plan, their credit rating will improve because they will have demonstrated that they are trustworthy to lenders.

How Do I Know If I Need to Consolidate My Debt?

    There are several key methods of determining whether it's a good idea to look into debt consolidation. To begin with, those who are simply unable to make their payments at all, and who won't really benefit from debt consolidation, may be better served by simply speaking with an attorney about filing for bankruptcy. Those who could make their payments if their interest rate was reduced, however, are better served by attempting to consolidate their debt into one low fixed-rate loan. This is also true of those who aren't able to keep track of all of their monthly statements and who want to simplify things.

Sunday, February 12, 2012

Credit Consolidation Help

If you are paying too high an interest rate on your credit accounts, credit consolidation can help you acquire a cheaper rate. And with consolidation, you can merge your outstanding credit accounts into one loan or bill. Explore consolidation options first, and then select the method that works best for your situation.

Second Mortgage

    Taking out a second mortgage on your home, which refers to getting a loan using your home's equity as collateral, can provide a means of consolidating your credit cards and other loans. This method works by using the second mortgage funds to pay off all your credit accounts. This eliminates balances on your previous accounts, and results in only one loan payment -- the second mortgage -- which often has a lower interest rate. Make monthly payments to the lender to pay off the second mortgage.

Transfer Balances

    If you don't want to meet with lenders and apply for a loan or you don't own a home, apply for another credit card with a higher credit limit and move all your credit card balances to the new account. Balance transfers are advantageous because some card companies offer low introductory rates or 0 percent interest on transfers. This benefits consumers who plan on paying off the debt before card companies issue a permanent rate. Compare balance transfer fees before accepting an offer.

Debt Management Companies

    Seeking help from debt or credit counselors can help with managing consumer debt. Consolidation using a firm or agency doesn't involve a loan to pay off your existing debt. Rather, consolidation companies take all your accounts and combine them into a single bill with a lower interest rate. Choosing this route will place a freeze on your credit accounts, meaning you're unable to use these credit cards. This freeze alleviates new charges and facilitates the debt-reduction process. Consolidation agencies accept one payment each month and apply this payment to your debt. Agencies remove credit freezes if you cancel the service.

Personal Loan

    Personal debt consolidation loans from a bank or credit union also provide a means of consolidating your credit. Getting this type of loan will require a good credit history demonstrated by a high credit score. Lenders establish the minimum credit score requirement, but a score in the 700s can help you qualify. Plus, personal debt consolidation loans will need collateral to secure the funds. A car title, jewelry or electronics can work as collateral or security for the loan. Beware, though, these loans often have high interest rates that may not be much less than what you are paying on credit card debt.

How Is a Foreclosure Reported on Your Credit?

How Is a Foreclosure Reported on Your Credit?

Losing a home to foreclosure is an experience that many individuals would prefer to keep private. Unfortunately, if your mortgage lender seizes your property, it inserts a record of the foreclosure into your credit history. This allows other lenders and creditors to see that you lost your home due to nonpayment whenever they review your credit report. Both your lender and your local court system play a role in reporting your foreclosure to the credit bureaus.

Mortgage Trade Line

    The original record of your mortgage appears on your credit report as a mortgage trade line. The lender reports each payment that you make or miss to the credit bureaus, along with the date you originally opened the account and how much you owe on the loan. As you begin missing payments prior to the foreclosure, the missed payments appear on your credit report. When the lender initiates foreclosure activity, it will note this fact within its mortgage trade line as well. Each mortgage lender possesses its own set of guidelines for reporting foreclosure activity. Thus, the exact notation within your mortgage trade line noting a foreclosure may vary depending on your lender.

Public Record

    After the foreclosure process is complete, your county courthouse files documents noting that the incident took place in the county's public record database. Public records are viewable by anyone who wishes to review them. Representatives from the credit bureaus frequently review public records online in order to update consumer credit reports accordingly.

    Once updated, a separate trade line noting the foreclosure will appear within a section of your credit report reserved for negative public records. This does not erase the mortgage lender's original report noting the foreclosure within its own trade line. Rather, evidence of the foreclosure appears within the mortgage lender's trade line and the public records section of your report.

Time Frame

    Although foreclosure records remain part of the public records database indefinitely, evidence of the event on your credit report only remains valid for a limited period of time. The Fair Credit Reporting Act limits the credit bureaus to reporting foreclosures for no more than seven years from the date the foreclosure took place. After seven years, both the public record of the foreclosure and the mortgage lender's original trade line will disappear from your credit report.

Foreclosure Effects

    Once your credit report reflects a foreclosure, you become a much higher default risk to future lenders and can expect to pay higher interests rates and deposits for goods and services. The impact that a foreclosure record has on your credit rating diminishes with time. The Fair Isaac Corp.'s FICO credit scoring formula considers incidents that took place within the past two years of the greatest relevance when determining your credit score. Because of this, you can improve your credit after foreclosure even if the evidence of the foreclosure still appears within your credit history.

What Is APR Financing?

What Is APR Financing?

Postmodern economies are predicated on credit. Not only do consumers buy what they can't immediately afford, lenders extend credit based on interest earnings they haven't collected yet. APR financing is the most common method of credit for consumers and is used in buying things like houses, appliances, and cars.


    Federal law requires that lenders report an annual percentage rate, or APR, to borrowers for ease in comparing loan offers. Thus, APR is a protection against deceiving lending practices that is used by consumers as a means to "shop around" and evaluate loan offers that might have different maturities and interest rates. By incorporating fixed costs and annualizing the rate, borrowers can make "apples to apples" comparisons.


    APR reflects the difference between the principal of a loan, that is, the amount borrowed, and the total that will be repaid including all interest, fees and charges, expressed as a per annum increase. APR financing is an agreement between a lender and a buyer that is repaid over a fixed number of months. Credit cards and savings accounts will also usually report an APR, but these are often inaccurate because they do not account for compounded interest.


    Calculating the annual percentage rate of a loan requires the principal, the annual interest rate, the maturity date and any financing charges or fees. A $1,000 loan that was due back in a year with $500 interest and no other fees would have a 50 percent APR. If the maturity was increased to two years, the APR would be 25 percent. If, there was also a $100 financing fee, the one-year loan would have an APR of 60 percent, the two-year loan 30 percent.


    Interest is generally understood as the borrowing cost of money. By including closing costs, financing fees, insurance premiums on the loan or any other upfront fees and charges, APR reflects a more accurate assessment of the cost by adjusting the interest rate higher. Nevertheless, APR financing probably provides a net savings to the borrower by helping them find the cheapest loan available. The very extension of credit helps every segment of the economy by allowing for consumer spending based on future earnings.


    Despite the goals of APR financing, there are several different ways calculating APR, and borrowers are recommended to do their own calculations if possible. They should be aware if the lender is using a constant yield method that does not favor early payments. Additionally, borrowers should be aware that on relatively small loans, lenders can adjust the ratio of upfront charges to longer term interest payments without significantly altering the APR.

Best Ways to Repair Credit

There are several ways to build a positive credit history. Lenders request credit reports upon receiving a loan application. And, based on your three-digit personal score, they'll either approve you for a loan or deny your application. Improving your credit is one of the best ways to guarantee an approval and low interest rate. But before you can acquire a better rating, you'll need to recognize factors that result in a rating decrease.

Credit Report Mistakes

    Credit bureaus and lenders are imperfect; thus, they're capable of making mistakes. Some mistakes are minor and may include misspelling your name or printing a wrong address. But in severe cases, lenders may accidentally report another person's information on your report. And if this information is negative, your credit rating may decrease. Fortunately, there's a simple fix. Because reporting errors are common, it's vital for everyone to order a copy of their credit report once or twice a year. Carefully look over the report and check for mistakes, such as unknown account information. Contact the creditor to dispute the remark. If this proves ineffective, draft and send a dispute letter to the credit bureaus.

Late and Missed Payments

    Defaulting on a loan or credit card payment can quickly damage your credit rating. You'll lose points with every late or missed payment, and it can take months to reverse the damage. If looking to repair your credit, start by making on-time payments. In turn, you'll build a good relationship with your creditor, and you'll likely qualify for lower interest rates and better loan deals. Knowing your due dates is crucial to paying your bills on time. If necessary, use a calendar to mark your dates, submit online payments or make payments several days before the actual due date.

Control Your Spending

    Using credit cards unwisely can also have a damaging effect on your credit. In this instance, repairing your credit involves altering your spending habits and paying for the bulk of your purchases with cash. Uncontrolled credit card use often results in excessive debt. This creates a high debt-to-income ratio, which can reduce your personal rating. Lenders may see you as a risky applicant; this label can impact your loan approval odds. Learn how to live within your means. Buy things with cash, pay off your credit card balances monthly and don't max out your credit cards.

Saturday, February 11, 2012

Is My Debt Settlement Program Legitimate?

A lawfully created debt management or debt settlement company is bound by federal and state regulations regarding operation and communication with potential clients. Separating a legitimate debt management company from a scam operation is a matter of information. The more information clients are given regarding the company's business practices and track record of consumer advocating, the more likely it is that the business is legitimate.

Upfront Fees and Charges

    The Federal Trade Commission's Telemarketing Sales Rule prohibits a company selling debt management or debt settlement services from charging you any fee for services until the company works to settle or reduce your debt. A company that attempts to charge you an upfront fee for service without advocating on your behalf with your creditors is most likely not a legitimately licensed debt management company. This type of business is attempting to use your financial crisis to turn a profit and may leave you in a worse financial situation than when you approached the company for help.

Disclosing Important Information

    A lawfully licensed debt management or debt settlement company must fully disclose the terms of your agreement with regard to price of participation in the program, conditions of service and how the company intends to help you lower your overall debt. A company that obfuscates its debt management practices and provides vague information on how your money is used to pay your creditors is probably a scam waiting to happen. Do not sign with a debt management company or give it any of your financial information if you cannot obtain a clear picture of how the company operates.

Holding Your Money

    How a debt management or settlement company uses your money to pay your creditors can be an indicator as to the legitimacy of the business. Contact your creditors regularly when you sign on with a debt management company to make sure your funds are distributed appropriately. A debt management company that holds on to your money too long can cause you credit problems by having delinquent payment notations placed on your credit report. It's your money, and you are ultimately responsible for paying your creditors on time, even if a debt management company is making the monthly disbursements on your behalf.

Communication Problems and Guarantees

    A debt management or settlement firm that tells you to stop communicating with your creditors is most likely fraudulent, according to the Federal Trade Commission's website. Communication with your creditors is a key element in managing your debt and ensuring your account is being properly paid each month. Additionally, a debt company is most likely illegitimate if the business promises to stop all collection practices and phone calls from creditors. The only way to stop collection practices is to bring your accounts current. Unless the debt management company shows you a plan of how the business intends to bring your accounts into good standing, collection practices will continue.

Friday, February 10, 2012

How do I Get a Credit Report Free When Credit Is Refused?

How do I Get a Credit Report Free When Credit Is Refused?

The Fair Credit Reporting Act is a federal law designed to regulate the information shared by credit reporting agencies thereby protecting the consumer. A provision of the act allows consumers to receive a free credit report upon denial of credit.

Denial of Credit

    You may be eligible to receive a free copy of your credit report if there has been any adverse reaction as a result of information contained in your credit report. This may include denial of a credit or loan application, inability to extend credit limits or cancellation of credit. You should receive written notification of denial from the lender which includes the name of the credit reporting agency that provided the negative credit information.

Credit Reporting Agency

    A free credit report may be requested from the agency listed on the notice of denial within 60 days of the date of denial. The three main credit reporting agencies are TransUnion, Experian and Equifax. Equifax and TransUnion both offer online request forms to download, print and submit by mail. Contact Experian toll free at 866-200-6020 to request your free report.

Required Information and Documentation

    Basic personal information is required for requests including your full name, address, previous address (if you have moved in the last two years), phone number, Social Security number and date of birth. You should also provide a copy of the letter of denial and a utility bill to validate your mailing address. Credit reports will be delivered by mail and do not include your credit score.

Florida & Creditor Denial Laws

The Federal Trade Commission has the authority to prosecute lenders who violate federal anti-predatory loan laws and the Equal Credit Opportunity Act. Under federal law, lenders who deny credit to applicants based on their credit history must provide them with written reasons for denying them credit. States can enact additional consumer protection regulations. In Florida, the Office of the Attorney General has the authority to investigate violations of the Fair Credit Reporting Act in conjunction with the Federal Trade Commission.

Florida Office of Financial Regulations

    The Division of Finance within the Florida Office of Financial Regulations is responsible for regulating loan originators, lenders and brokers; money service businesses, including check cashers and deferred presentment providers; title loan lenders; retail sales lenders, including motor vehicle leasing companies, auto sales lenders and home improvement finance lenders; collection agencies; and mortgage lenders. Florida law requires mortgage brokers and lenders to obtain licenses before they can transact business with Florida residents. Furthermore, loan originators and mortgage modification companies must obtain specialized licensing.

Florida Law

    The Florida Fair Debt Collection Practices Act is identical to the federal law, but provides Florida residents with additional opportunities to dispute their credit denials. The act covers household and personal debts, including medical debts, automobile loans, credit card debts and retail service installment contracts. The act governs the procedures lenders must follow when collecting debts from borrowers. Additionally, the Florida Attorney General can pursue complaints against lenders who deny credit to applicants based on discriminatory reasons, and lenders can face criminal and civil penalties.

Federal Equal Credit Opportunity Act

    The federal Equal Credit Opportunity Act prohibits lenders from denying credit to applicants based on their race, gender, origin, religion, disability or family status. Under federal law, lenders have 30 days to provide written responses to applicants about whether their applications are denied or approved.

    The federal credit laws require lenders to state their reasons for denial in their loan response letters and provide applicants with information on how they can dispute their denials. Furthermore, lenders' written disclosure letters must provide applicants with instructions on how to request further information regarding their decisions to deny credit.

Florida Attorney General

    According to the Florida Office of the Attorney General, credit card companies, banks, insurance lenders and any other agency relying on information obtained through credit reporting agencies must provide borrowers with free copies of their credit reports if they deny their credit applications and borrowers officially request that information. If they approve a borrower's application, they can charge a nominal or reasonable fee for providing a copy of the credit report.


    Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.