The Four Crucial Credit Repair Laws
The four important laws which ensure an accurate and fair credit score are: Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair Credit Billing Act (FCBA) and Credit Repair Organizations Act (CROA).
The credit repair laws were enacted to help protect the customers against the inconsistencies and inaccuracies on the reported credit. The laws allow customers to solve the disputes regarding the untruthful and inaccurate listings made on their credit reports. They also allow customers to get their personalized credit report free of charge every year. A brief description about the main credit repair laws is mentioned below:
1) The Fair Credit Reporting Act (FCRA):
The FCRA marked the beginning of the credit repair process. This act allows you to view your credit account and to raise any dispute regarding bad credits straightaway with the concerned credit bureaus. Any unfair credit can be directly challenged. The FCRA is further supported by the Fair Credit Billing Act and the Fair Debt Collection Practices Act which are also equally important for a beneficial repair plan.
2) Fair Debt Collection Practices Act (FDCPA):
The FDCPA protects you from the abusive behavior of the debt accumulators. It stops them from screaming at you, calling you during the unusual hours, using vulgar speech or being violent while collecting a debt. The FDCPA provides powerful validation tools for collecting debt and facilitates you to question any reported debt. The law was enforced to protect innocent people from unreasonable and unfair collection agencies and collection tactics. The debt collectors can no longer show those behavior for which they were known in the past.
3) Fair Credit Billing Act (FCBA):
Like how the FDCPA governs the collection agencies, the FCBA allows you to challenge the negative credit reports with your actual creditors directly so as to change the manner they are describing your debt to the concerned credit bureaus. The FCBA asks the creditors to make correct and complete bills. It checks every unauthorized accusation like the accusations for wrong amount or date, accusations for products or services which you never purchased or accepted or weren’t delivered as per agreement, accusations of failure to post credits or other payments and failure to mail bills to your actual address, etc. It allows you to ask for a written document as a proof from the collectors.
4) Credit Repair Organizations Act (CROA):
While all the above mentioned laws surround credit repairs, it would be deluging for a newbie to try amending his credit. There are several authorized companies meant for credit repairs and help customers to get an accurate and fair credit report. These companies are completely governed by CROA. The CROA not only enforces the credit repair laws, but also prevents the ordinary people from being victimized of a false credit repair issue.
Stay Safe. Don’t Be a Victim of Identity Theft
Being a victim of identity theft is a sour experience. Trust us. Therefore, it is advisable to take a few steps to avoid being at a loss. However, remember, taking these steps will only reduce your chances of being a victim, not eradicate the possibility altogether. The first and the foremost, and perhaps the most useful step, is to keep a check on your credit score on a regular basis. This empowers you to track and identify any suspicious transaction.
You can know instantaneously who is falsely using your identity. Thus, the fraud will not have enough time to go deep inside your budget. Credit reports have all accounts listed under your name and in case you find the slightest of ‘here and there’ anywhere, you can track it immediately. The next step is to be extremely possessive about your personal information. Do not let anyone get near it and don’t trust anyone. This secures you to a great extent.
At times you require verifying your own identity like in banks. In the world of net banking, securing your personal data has become all the more important. You have security questions, security passwords, one time passwords and what not. Try not to leave a lot of information on bank checks as that makes you prone to being a victim of identity theft. Never give away your data even if somebody tries to assure you that he is a bank professional.
If it seems that you must provide your personal information, ask the caller for a written application duly stamped by bank authorities. Identity theft is mostly carried out by creating fake scenarios like opening of new credit cards, accounts and insurance services. If you are about to go out of town, make arrangements with the Post Office to hold back your mails till you return. Leaving mails in postboxes for long periods is a blunder better avoided and commonly committed.
Check for transactions in your credit report that were not approved by you. Order report copies for future references. Nowadays, bank customers are slowly shifting to free online credit reports. The Legal-Helper service helps you in leveling your credit score and also enables you to correct the credit. Credit scores become useful for obtaining future credits. Lenders lend money only when you have a clean record. These few basic steps might prevent you from being a victim of identity theft.
Is it Wise and Legal to Get Loans to Pay off Debt
You borrowed that loan with the intention of paying it off. Your intentions were good. You never planned to be in a situation where you would not be able to pay off your debt. However, if you find yourself in that situation, then this is where borrowing loans to pay off your debt might help you. You might be wondering whether it is legal or not. Well borrowing loan with the intention of returning it is legal.
Do you use your credit much too often? Did you buy a house that is beyond your budget? Now, you stand at a point where all these debts amount to more than your spendable income. Were you being foolish? No! Absolutely not! You are not the only one to face such a problem. There are many out there facing similar predicament. You are a righteous person and do not want to throw in the towel by declaring yourself bankrupt.
Most people in such situations make the folly of scraping together all the cash that they have and pay off a loan. Many are so desperate to take this debt off their back, that they withdraw all their retirement savings to pay off the debts. These tactics might enable you to pay off the creditors, but then let us be reasonable; can you pay off all your creditors this way? Withdrawal of even a small amount from your retirement fund can cost you a large sum in returns, in the future.
Let us get down to some serious sorting out. We know you have not been a great planner until now, but then it is never too late to start. First and the most important step is to stop the loss. Cut down on your expenses to the bare minimum and build upon your savings. Now, consider borrowing loans to pay off the debt.
Peer to peer lending is becoming a popular way of borrowing nowadays. All you need to do is find a group. The house, which you bought yesterday, might today cost much more than what you owe the bank. You can borrow a loan on this residual amount. Consistency in income may even prompt some banks to give you a personal loan. Last but not the least, you could transfer all your credit card balance into one account, with a new card of course, as the interest rate on a new card can be as low as 0%, or maybe 3-5%, yet much lower than what you were paying. In each of these solutions, you will be borrowing loans to pay off debt. Therefore, you will have to be a better planner, a better organizer and a better executioner than you were yesterday.
Average Credit Card Debt Rates In the U.S
According to the U.S Census Bureau, here are some interesting published statistics regarding the average credit card debt pattern in the States in the recent years. These reports are based upon the surveys conducted over the last two years (2010-2011). Though there was an unprecedented increase in the number of credit cards holders in the U.S over the years, but there was a marked decrease in the actual number of credit cards in circulation. In the year 2012 alone the net American credit card debt ranged up to $886 million and is expected to rise even higher up to staggering $1,177 trillion! Each American card holder, at an average has nearly $5,100 as debt which might rise up to $6,500 by the end of 2011 or 2012. According to the reports submitted by the Trans Union, the credit card delinquencies have however, dropped down, which quite interesting to note keeping the current state of economy in mind.
Statistics provided by the Public Consumer Reports survey of the United States gives a clearer picture of the average credit card debt ratios. It is interestingly revealed that one third of the populace still DOES NOT own a credit card. American currently own nearly $917 billion on the revolving credit line and nearly $69 billion as past dues to be cleared off. With only 54% percent of the card holding population clearing their hundred percent dues at the end of each month it is no rocket science to understand why the debts are piling up.
As per the state wise payment analysis the states with the highest average credit cards debt are Alaska ($7,667); Tennessee ($7,065) and Nevada ($ 6,578) respectively. On the other hand the best performing states are Iowa ($ 4,247); North Dakota ($ 4,417) and South Dakota ($4,077). The states with the steepest increase in their average credit card debt rates were District of Columbia (+6.3%); Alaska (+2.5%); and Nebraska (+2.7%). Similarly the states with the steepest decline in the debts are Hawaii (-2.7%); Utah (2.6%) and Illinois.
There are several analysis and discussions everywhere, regarding the basic reason behind these huge credit cards debts. Usually late payments over the credit card dues are attributed to unemployment. According to the research, the biggest employment fall was witnessed among the non farm workers with declining payrolls. With unemployment jumping up to 15%, no wonder the credit accounts valuing nearly $751 million has closed down with families going in for greater savings.
Average credit card debt rate are a result of various social economic factors and the current state of the U.S economy has much to explain for it. The numbers of new credit issues have greatly dropped steeply and especially in the states which are worst hit by the economic meltdown. With nearly 40% of the U.S Households now going in for huge cost cutting and domestic savings, the public spending through credit cards are surely going to crash down but the chances of clearing the due already piled up over the years is highly unlikely, at least in the near future.
Bank Overdraft Fees: How To Avoid Banks Charging Overdraft Fees
One of my favorites sayings is “It is expensive to be broke”. This quote could not be more truthful than when you have to deal with banks charging overdraft fees. The frustrating part about dealing with overdraft fees is that they can get more viral than a Youtube video. It seems like once you get one, there are several more to follow.
Avoiding bank overdraft fees is actually easy to accomplish. The best way to tackle this problem is not to spend more than you have in the bank. It can be tough at times trying to balance your life and make a dollar stretch farther than it can go, but you must realize that taking these risks can double your debt. In addition to paying the bank overdraft fees, you will still end up paying a late fee for your late bill payments.
Bank Overdraft Fees Caused By Monthly Maintenance Charges
One of the first task you must do to make sure you stay away from additional fees is keeping track of your monthly maintenance fees for your bank account. If you can at all avoid it, try to find a bank that offers completely free checking without any fees. If you are dealing with a second chance bank, this may not be possible, so it is important to know exactly how much these fees will cost you each month. Nothing stings more than having less in the bank then you anticipated.
Another recommendation is to utilize money orders or prepaid debit cards to pay bills instead of checks. These methods ensure that you only pay what you have. Often checking your bank balances without balancing your checkbook can give you a false balance that does not include items being held.
ACH Withdrawals And Bank Overdraft Fees
You should also avoid signing up for automatic withdrawal transactions. These ACH transactions can catch you off guard and cause excessive fees. In addition, they do not always come when you expect it. Creditors tend to change billing dates without notice. You are better off setting alerts on you cell phone that reminds you of when you need to pay your bills. Also these payments are controlled by humans so there is always a chance of human error and multiple billings in the same month.
Unless you have overdraft protection, you should also never attempt to clear a check that you are uncertain of the funds being available. The banks have a way of making sure they collect multiple bank overdraft fees from your account, after all, they are in the business of making money.
Tricky Computer Programming That Cause Bank Overdraft Fees
Let’s say you had $261 dollars in the bank and you tried to clear 4 items for a total of $270. Also let’s assume the total of the transactions were one day apart in this order: $255, $3, $3 and $9. You would expect to get one bank overdraft fee for the last item for $9 dollars right? Wrong! Many banks computers are programmed to reverse the order of these deposits. This means that it possible that the $9 dollars would clear first followed by the $255 causing 3 bank overdraft fees instead of one.
Having a bank account, credit card, and a good credit history is a luxury that will be surely missed when it has been destroyed. It is much easier to manage your finances properly today then to attempt to repair them in the future.
How To Safeguard Your Credit In Tough Economic Times
Lately it seems that every other person is taking turns either being unemployed or losing a business. These tough economic times makes it real hard to maintain good credit. What do you do when you just can not pay your monthly bills.?
The worst thing you can do is simply ignore your bills and allow yourself to fall into debt. There are actually some steps you can take that may buy you some time until you can get back on your feet.These few simple steps can help you to maintain your credit score while keeping the bill collectors off your back.
Step #1: Do not Use Your Credit Cards For Any Purchases
It may be tempting at times when your are waiting for money to come in to pull out your credit card to pay for other bills. This practice will end up costing your more and will put you in deeper financial debt. At all cost, you should attempt to only use cash to pay for any purchases.
Step #2: Contact Your Creditors Immediately
Call all your creditors to let them know of your situation. Explain to them that you really want to maintain your credit rating. There are times when creditors may be willing to lower interest rates, postpone payments until a later date, or make lower payment arrangements to accommodate you. You will never know what they may or may not do if you never contact them.
Step #3: Exercise Your Payment Protection Option
Check to see if you have payment protection on your credit cards. This coverage will cover you in the event that you become unemployed or unable to work due to illness. If you do not have payment protection, many creditors will allow you to sign up for it even if you are already in hardship. Taking the initiative will prove to them that you are willing to pay your bills.
Step #4: Pay The Minimum Balance If Possible
Instead of not paying on your bills altogether, you should attempt to at least pay your minimum balance. The balance of your credit cards will not decrease, but this will keep you from incurring late fees, late payments and charge offs on your credit.
Step #5: Defer Your Payments
Check with your creditors to see if they offer payment deferment until you get on your feet. One debt that you can defer for sure are student loans. So if you have a student loan, do not allow it to become delinquent. Call them to take advantage of their deferment option.
Recovering from a lost of good credit is a long arduous road. If you can at all avoid allowing your credit to go into delinquency, you should make every effort. Sometimes, all it takes is a few months of not having to worry about your bills to help you get back on your feet.
Bad Credit Second Chance Credit Cards
In today’s world it is imperative to own a credit card regardless of whether you intend to use it or not. Credit cards are needed for times of emergency. They are also needed for ordering online or renting a vehicle. Unfortunately many people abuse the privileges of having a credit card which eventually turns into the woes of having bad credit.
In my opinion, making the majority of your purchase with cash is the only way to stay out of financial trouble, but at the same time, having a credit card is a good luxury. Once you have lost your credit card privileges you will soon notice their real importance. There is good news however; You can still bounce back with bad credit second chance credit cards.
A bad credit card card is a card that you can qualify for regardless of your past credit history. These cards usually comes with some kind of secured deposit to give the bank a little more security. This only makes sense since your past history is not favorable. Some bad credit second chance credit cards are fully secured, while others may match your deposit to give a little more credit to play with. It will all depend on the level of your credit delinquency.
Disadvantages Of Bad Credit Second Chance Credit Card Offers
Second chance credit cards can give you the privilege of once again having a credit card, but it does come with its disadvantages. There may be hidden fees and other stipulations that can affect your credit limit before you even make any purchases.
The things to look out for when opting for a bad credit charge card are instant annual fees, extremely high interest rates, high usage fees, and higher late fees. To avoid any surprises after you have attain such a card, it is wise to compare several secured credit card offers before making your decision. No matter what card you choose, you should expect to pay more for having loss your credit privileges in the first place.
Rewards Of Second Chance Credit Cards
Remember, bad credit second chance credit card companies are in the business of making money. The fact that a huge number of the population are suffering from the credit crisis make these businesses very lucrative. You should also bear in mind that having one of these cards is not a permanent situation. You will end up paying more in the long run because being broke is expensive, but if you take advantage of these offers and pay your bills on time, you will soon be able to enjoy your rewards.
The rewards of paying your bills on time for about six months may lead to the opportunity to raise your credit limit, lower your interest rates and apply for a non secured credit card. Your second chance credit card company may also return your security deposit. Make the most of your bad credit second chance credit card in order to make sure you never look back.
Good Credit Is Not The Answer
You see, the whole purpose of getting a good credit score is to pay less, get a lower interest rates and therefore get the best bang for your buck. All of these things are good, but so many of us see credit as a way to purchase things that we can not afford. These purchase end up costing us more in the long run and therefore forfeiting the savings we enjoyed from having lower rates.
The answer to having a healthy credit lifestyle is actually purchasing with cash. The key to making cash only purchases on a regular basis is discipline. Discipline starts with saving your money and budgeting for the things that you want. When you can save up for things such as furniture, buying a used car, or doing home renovations, that is when you actually pay less.
A good example where good credit can be a disadvantage is evident when buying new furniture. Many big companies will offer to give you the furniture upfront with no payment for 3 years. All this does is put off what you should be doing today until later. Believe it or not, those 3 years will fly by and you will have to face those payments eventually, probably at a most inopportune time.
After successfully paying off let say $5,000 dollars worth of furniture, you may find that you paid 50% percent more than the showroom price. That defeats the purpose of having good credit and getting a lower interest rate in order to pay less.
Credit should be used in emergency times when cash is is available but not at hand. Credit should never be used to make purchases for items that we do not have the funds to cover. These types of practices is the main culprit of what I like to call a credit roller coaster. This means simply going back and forth from having good credit to back to rebuilding bad credit.
The credit roller coaster can easily be avoided by making wiser choices. You would be surprised of how much you can save when you sit down a make a budget that is reasonable to your lifestyle. You will find several unnecessary items that you may be able to do without, therefore providing you a cushion for the things that you really want. When you can afford to do that, you will enjoy more financial freedom.
The title of this article may lead some to believe that I am diminishing the importance of having good credit. That is entirely not the case. Good credit is one of the necessary elements to having a healthy financial lifestyle. But when it comes to getting the best bang for your buck, good credit may not the answer; Paying with cash is King.
How To Dispute A Credit Report Online
Inaccuracies in credit reports are a common occurrence. Many times consumers do not realize they have negative items on their credit report until it is time to apply for
credit. The good news is that one can always dispute their credit report.
Disputing Credit Reports Online
There are several way to go about disputing a credit report. The fastest and easiest way is to learn how to dispute a credit report online. When disputing a credit report online the whole process can be done in a matter of minutes without any paperwork.
The first step needed in order to dispute your credit report online is getting a copy of your report. You can get a copy of each credit bureau report by visiting annualcreditreport.com. After you have secured a copy of each report, you will be prompted to create a username and password to be able to access your report at a later time. You can then login to each bureau to initiate your credit dispute.
The next step will be to go through your credit report to identify the items you feel are being reported inaccurately. Once you select the derogatory items, you will have the option to select the reasons that you feel each individual item is indeed being report falsely. At the end of all your disputes, you will be provided a list of all the accounts you disputed. It is recommended that you print a copy of these disputes for your records.
Reporting Of Credit Report Disputes Results
The creditors will have thirty days to respond to all your disputes. There are a few possible scenarios; they will either confirm the item a being yours or they will not meet the thirty day deadline. If they do not respond within 30 days, the credit bureau will delete the negative item. The creditors may also update the account if the information was indeed yours but was not being reported correctly.
When you initiate a credit dispute online, you are usually provided with results of your investigation via email, letter format or in some cases both. To make sure you receive the results as soon as possible, you should provide an email address that you check on a daily basis. You should also keep track of when you initiated the credit dispute to anticipate the delivery of the results.
The whole online process should not take more than ten minutes for each bureau. Even if you did not have a clue of how to dispute a credit report online, you will find that it is a really simple process. Whether you choose to initiate a credit report dispute online or by traditional mail, the main issue should be make sure that your credit report is as accurate as possible. It is not a good idea to wait until you are making a major purchase to make your credit report a priority.
Buy Here Pay Here Car Lots
One of the major disadvantages of having a bad beacon score is exposed when it is time to purchase a new vehicle. If your credit score is below 550, you may have to resort to buying a vehicle from a buy here pay here car lot. The disadvantages of buying from such dealerships are several, in this blog post, I will discuss some of the drawbacks.
Buy here pay here dealerships advertise the ability to get you qualified for a vehicle without a credit check. When you apply for a loan with these dealerships, they simply ask you for about 7 references, your job information, and your home address. Once they have compiled all the necessary information, you are ready to drive. It may seem real simple, but there is a catch.
Disadvantages Of Buy Here Pay Here Car Lot Loans
The first disadvantage with buy here pay here car loans is interest rates. You can expect to pay the highest interest rates possible. The average interest rate can exceed 20 percent. This disparity in rates as opposed to other loans can result in extremely high car notes. The only way to lessen the sting of the high interest rates is to pay the vehicle before the contract terms.
In addition to the high car notes are bi-weekly payments. Buy pay here car lots often have a bi-weekly payment schedule as their repayment requirement for the loan. This bi-weekly term makes it easier for you to fall behind on your payments, before you know it, another car note is due.
Refinancing A Buy Here Pay Here Car Loan
Actually with buy here pay here car lots, you do not get what you pay for. The cars are usually priced higher than it would be on other dealerships. This is especially frustrating if your intentions are to pay on the vehicle for a few months and then refinance. When it comes time to refinance the vehicle, your loan will be so upside down that you will have to pay additional money in order to qualify.
Do Buy Here Pay Here Car Lots Report To The Credit Bureaus?
Surprisingly, many buy here pay here car lots do not report to the credit bureaus. If you honor the high interest loan and do pay the vehicle off, it may not affect your credit score. After paying the vehicle, you will be given a letter of satisfaction from the dealership which you have to mail to the credit bureaus. This does not guarantee however that the credit bureaus will honor that certificate.
In conclusion, to avoid the disadvantages of dealing with buy here pay here car lots, you should try your best to maintain a good credit history. When you allow yourself to fall victim to debt, you are then subjected to dealing with sub standard situations. The best way to start making sure you will not have to deal with bad credit car loans is getting a copy of your free credit report regularly and paying your bills as agreed. If you must enter into a buy here pay here car lot lot loan, make sure you read the fine print to understand fully what you are getting into.
