Debt Management

Fixing A Credit Report - Quickly
 by: Steve Gillman

Fixing a credit report starts with seeing what's on it. You may get access for free online. Try a search for "free credit report." Alternately, when you are denied credit based on a report issued by a local credit reporting agency, you can request a free credit report from that agency within 30 days.

A quick look and you'll have an idea why you were denied credit. Now how do you fix what you see? What if you find incorrect information on the report? What if you want to change information that is accurate, but unfair?

First, if there is anything you want to dispute in the report, you can write a letter to the agency. Tell them exactly what is incorrect, and they must investigate. Send copies of any documentation, such as canceled checks, and send it all by certified mail.

The agency must contact the source of the disputed information. If they recieve no confirmation within 14 days, they must delete the item from their files, and send you an updated report. You can demand that they send the corrected report to all creditors that recieved your credit report in the previous six months. This last part won't be done automatically, so be sure to demand it.

Honestly, if the item is under $500, or is more than a year old, usually creditors don't bother to respond. This means fixing a credit report is possible even if it isn't incorrect. Also, if you don't succeed on your first attempt, you have the right to dispute the item again after 30 days.

Put Explanations On Your Credit Report

When an item can't be removed, you have the right to add a 100-word explanation permanently to your credit report. All who recieve the report will see your explanation. For example, if you had a valid argument with your doctor over a charge, you can explain the details.

Fixing a credit report may take a long time if it is based on a history of late payments and loan defaults. But even in this case, you can correct little errors, and explain anything that isn't fair. This will make it look a little better while you start paying bills on time and doing the other things necessary.

How to Repair a Bad Credit Rating
 by: John Mussi

If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished.

Once you have a bad credit rating, it might seem like there's nothing that you can do about it? but you don't have to believe that. It's not as difficult as you might think to get by with a bad credit rating; with a little work and time you can even repair it! Of course, before you do that it's important to realize exactly what a credit rating is.

What your credit rating says about you

Every time a lender or other creditor makes a report concerning your payment history to them, this report affects your credit score.

Your credit score is a numerical indication of the positive and negative reports that you've received from creditors and lenders; if the number is high then you have a good credit rating, and if it's low then you have a bad credit rating.

Since many creditors and lenders report either monthly or quarterly, the overall score is very fluid and can change over time? a fluidity that allows you to change and improve your bad credit rating as time goes by.

Basic credit repair

If you're looking to repair your bad credit rating, the first thing that you need to do is obtain a copy of your credit report.

Once you have your credit report, you'll be able to see the creditors and lenders that have made the negative reports for late payment and non-payment that caused you to have a bad credit rating.

Contact the lenders who have reported you for non-payment to arrange a repayment schedule, all the while making sure to keep current accounts up to date and not falling behind on your current payments.

As you gradually repay your old debts, they will be reported as being paid satisfactorily? and at the same time your current accounts will continue to report positively as long as you make on time payments.

Within six months to a year a definite change should begin to show in your credit score as the positive reports begin to outnumber and encompass the old negative reports.

It may still take a while longer for your bad credit rating to disappear entirely, but as long as you work to maintain your credit and make your payments on time you'll find that the day will come when having a bad credit rating is nothing more than a memory.

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What is a Bad Credit History?
 by: John Mussi

A bad credit history can sometimes seem like a curse... whenever you apply for financing or for a loan, it always seems to pop up and cause you problems.

Having a bad credit history can even cause you problems when applying for some jobs or other opportunities! Before you let it get under your skin, though, you should know that it is possible to live with (and even improve) a bad credit history.

Of course, the first step to getting past your credit and getting on with the rest of your life is understanding exactly what your credit history is and what it means.

Understanding your credit history

Fundamentally, a bad credit history is exactly what it sounds like... a report that states that in the past, you've had problems with your credit.

Perhaps it's a result of several late payments in a short period of time, or a debt that you were unable to repay.

Regardless of the reason, your bad credit history is an indication to any potential lenders that there may be a risk in lending money or extending a credit line to you.

It doesn't in any way indicate that you're a bad person? just that you've had problems with money before. And if financial problems are what caused your bad credit history, then working to correct your financial problems is the first step in repairing your credit.

Repairing your credit history

Since money is at the heart of your bad credit history, then money is also the best way to get rid of it. It will take some time and may require some careful budgeting, but it is possible to turn your bad credit history around on your own.

The first thing that you'll need to do to correct your credit is get a copy of your credit report, which will show you which lenders have made negative reports concerning you.

These reports are what keeps your credit score low, and taking care of them will be a major step toward fixing it.

Contact the lenders and creditors that have made negative reports, offering to arrange some method of repayment. Some creditors will allow you to repay only a portion of what you owe, others require the entire debt plus interest and fees? but all of them will be more than happy to try to work out a plan to get their money back.

While working on clearing old debts, you should also make sure to keep your current accounts up-to-date; the more positive reports you can get in the present the better. As the older debts are repaid, the newer accounts will have more bearing on your credit score.

So long as you keep your current accounts up to date and paid on time, your credit score will slowly but surely start to rise? and your bad credit history will soon become nothing more than an unpleasant memory.

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Debt a Glossary of Terms
 by: Darren Yates

Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts.

Collateral - Property acceptable as security for a loan or other obligation.

Collection Agency - A company hired by a creditor to collect a debt that it is owed.

Contract - An agreement between two or more parties, usually written down and enforceable by law .

Cosigner - To endorse (another's signature), as a loan agreement, lease or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt.

Credit Bureau - An organization to which business firms apply for credit information on prospective customers.

Credit Report -An account of your credit history, prepared by a credit bureau. A credit report will contain credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and any lawsuits in which you have been involved.

Creditor - A person or entity (such as a bank) to whom a debt is owed.

Debtor - A person or entity (such as a bank) who owes money.

Debt to Income Ratio - Most mortgage lenders use this ratio to analyze your financial well-being. It is figured by using your monthly debt divided by your monthly income. The lower the percentage the better your financial picture. This is often referred to as credit worthiness.

Default - To fail to pay money when it is due. A default on a mortgage or loan takes place when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of your agreement with the mortgage / loan company.

Discharge (of debts) - A court's writing of off the debts of a person or business that has filed for bankruptcy.

Dischargeable Debts - Debts that can be erased by going through bankruptcy.

Down Payment - A cash payment made by a buyer when they purchase a property.

Equity - An increase in the value of your home or decrease in the loan amount on your home creates equity. Equity is the difference between what is owed on your home and the sale value. Most home equity lenders will allow you to borrow up to 80% of that value.

Fair Isaac and Company - Fair Isaac is the company responsible for creating the popular FICO score. This three digit score is created using information from your credit report and ranges from 300-850.

Foreclosure - The forced sale of property to pay off a loan on which the owner of the property has defaulted.

Garnishment - A court order directing a third party who holds money or property belonging to a defendant to withhold it and appear in court to answer inquiries.

Grace Period - A period of time during which you are not required to make payments on a debt.

Guarantor - A person who makes a legally binding promise to either pay another person's debt or perform another person's duty if that person defaults or fails to perform.

Interest - A commission you pay a bank or other creditor for lending you money or extending you credit. Usually calculated as a percentage of the mortgage or loan.

Lien - The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.

Loan Consolidation - The combining of a number of loans into a single new loan. Usually done to gain more favourable terms e.g. lower cost repayments or longer time to pay.

Principal - A sum of money owed as a debt, upon which interest is calculated. If you purchased an item for $100 on your credit card that would be the principal balance.

Repossession - A creditor's taking of property that has been pledged as collateral for a loan.

Secured Debt - A debt on which a creditor has a lien. A car loan would be an example of secured debt.

Term - The time required to repay a loan.

Unsecured Debt - A debt that is not tied to any item of property. Credit card debt is an example of unsecured debt.

Powerful Ways To Manage Your Money
 by: Lorraine Pirihi

Hi!

How did your finances shape up at the end of the tax year?

Are you in a better financial position now than 12 months ago? Have your assets increased in value? Are you earning more money?

If you've answered yes to these questions, that's great. If you've answered no, then perhaps it's time to take stock of where you are financially and look at how you can enhance your current situation.

Avoid Laziness

I'm always amazed that so many people spend most of their life at work and totally neglect their personal affairs.

Many of the business people I coach want their professional lives to be in order, and admit that their personal affairs are in chaos.

They have no systems for handling this most important area. The household paperwork is disorganised?piled up in a corner of the house?somewhere. They have no idea where they spend their money and often have no plan for their financial future.

If you do not organise your personal life, you won't have much of a future to look forward to.

Avoid the excuses that you are too tired, don't have the time, and don't know how.

Step Off the Treadmill

Here are several tips to get you started:

Set up a filing system to store your paperwork.

File your papers in categories: Bank, Car, Children, Home, Medical, Insurance, Investment, Tax, Utilities etc.

Organise direct debits for regular bills.

Read, sort and action your snail and e-mail daily. This will avoid a big build-up.

Make a note in your diary when you need to remember to do things.

Check your bank accounts weekly via phone or the Internet to keep tabs on your money.

Allocate a particular day and time each week to review your personal affairs.

Get educated - attend seminars, read books and listen to information on wealth creation. (Our fortnightly Event Update often advertises worthwhile events that will help you). Having knowledge will make it easier to make decisions and take action.

If you have a pro-active accountant or financial advisor " ask them what can you do to make the most of your money.

Review all your insurances to ensure you have adequate cover and are getting the best value for your buck.

Record your income and expenses in a spreadsheet to gain a true picture of where your money really goes.

Organising Your Financial Future

This area should be top priority. If you do nothing because it's too much effort well think about this.

What would happen if you lost your job, have an accident and receive no income for 6 months? How would you (and your family) survive financially? Do you have your insurances in order?

Where will you be in the next five years? Maybe retired and on a pension? Or perhaps you have superannuation you hope will be enough to live on?

Unfortunately too many people are under false illusions about how superannuation will be the answer for a secure retirement.

Hope is not enough. You have to be pro-active and seek out people who can help you. But be careful who you take advice from and what is the motivation behind them "selling" you their ideas.

Educating yourself on how to make the most of your hard-earned money so you can create wealth should be a high priority. After all, if you're not interested in securing your financial future, who is?

The Final Word

If you take control of your personal affairs you will have peace of mind and know that you are making things happen.

I once heard someone say: Some people make things happen, others watch things happen and still others wonder what happened. What do you choose to do?

Have a great week

Lorraine Pirihi