Repairing Credit after Bankruptcy – A Diligent Affair
Okay, something’s really wrong in the US. 1,467,221 bankruptcy cases in a span of one year is a SHOCKING number! Attorneys are tired of saying, “whose next?” Are you a part of the bandwagon too? If yes, there’s something that can cheer you up- You are not alone! It’s like covering up for failing the tough exam by pointing out to your parents how everybody else did badly in the math test as well. Alright, jokes aside, repairing credit after bankruptcy requires a lot of discipline.
Let’s assume your bankruptcy’s finalized. Next step is to check the credit reports. Visit the credit reporting bureaus. Get the credit scores to know where you stand. Make sure the bankruptcy was filed properly and that every figure is accurate. It helps a lot in rebuilding your credit. Build your credit with secured credit cards. If you default, the lender takes your deposit and nothing else. Use it responsibly to payoff stuffs. You are sure to improve the credit. Please do not miss a payment.
Put all the payments in the auto-pay mode (if possible). Mortgages, student loans etc should be paid off immediately. Negotiate with creditors for a different due date. But bear in mind – you must make the payments on the loans you have. Period. Not missing a payment helps a lot in repairing credit after bankruptcy. Hey! That does not mean you will overuse your credit cards and store cards. Keep the balance to a minimum. Pay off the card every month.
These good payments matter a lot as you’ll make a good impression on the credit bureaus. Try securing a meager auto loan once your credit score shines a little. Installment loans go a great way in improving the score only if make payments on time. The next trick is to apply for low-interest credit cards as and when your credit score shines brighter. Fix up a tight budget for yourself and then use the cards responsibly. Use Mint.com to track your spending.
Online applications like Mint links your credit cards, loan accounts etc to make it easier for you to check your spending. Finally, be patient. We assume you are not one of those many who feel they can get away with dishonest schemes. Repairing credit after bankruptcy is a time-taking affair. If you do not follow these points diligently, the bankruptcy stamp will stay with you for a decade. Your patience holds the key here. Work deligently today, for a better tomorrow.
Credit Card Limits And Credit Score
Credit cards are a very popular means for shopping and billing these days, due to the ease and comfort they offer to the users. However, it is necessary to understand the relationship between the credit card limits and credit score. Credit score on one hand determines the financial status of the person and largely alters the limit that he/she must be given; on the other hand credit limit is the maximum amount of credit that is offered to the person accessing his/her financial position to repay the same.
Thus, clearly the limit of the card issued and the credit score are directly dependent upon each other. In other words credit limit is directly proportional to the credit score and vice versa. The lenders, banks or any other financial institutions that lends credit card to the users, uses credit score as a tool to estimate the amount that the person concerned will be able to repay to the lender. In other words, credit score is also a method used by the lenders to access the amount of risk involved in giving money to the users.
Thus, credit score largely alters the credit limit that a person is allowed. A credit limit is actually the amount that the lenders lend to the customers, after properly analyzing the amount that they find the customers will be able to return back. Essentially it is interesting to notice that credit score is the criterion that is used to judge what amount will be least risky to be credited to the users. Moreover, the interest rates on a particular credit limit allotted to the customers is also calculated via the use of the credit scores.
The relation between credit card limits and credit score; and the way they both influence each other does not seem to be ending here. The credit scores are also used to evaluate (prior to assigning the card limit to the customers) that which customer can earn more revenue to them and accordingly the rate of interest is imposed. Thus, in a way, the credit score determines the financial status of a person. Certainly the person with a credit limit much higher than the others has better credit scores i.e. better financial status and less risk of money investment.
To conclude, the relationship between the credit card limits and credit score is totally dependent upon each other. Moreover, the credit card limit is largely influenced with the credit scores of a person. It is an analytical tool used by the lender to make sure that they invest the right amount that poses them the least financial risks and losses.
Reasons To Defer Student Loans
Loan repayment is as essential as its sanctioning is, due to the fact that it is a contractual financial help that is offered to the students for a given amount of time. However, sometimes due to a couple of reasons, students might find themselves struggling to repay the loan on time. In this condition, there are a few considerations that are given to the students that allow them to repay the loan after some time. This temporary delay is refer to as deferment of student loans. What are some reasons to defer student loans?
Unemployment Reason To Defer Student Loans
One of the very obvious situation that is considered and understanding is given under the same is unemployment. Usually, most of the banks and lenders offer financial help to deserving students for a span of time, until their studies are completed. However, in case the student faces unemployment after the completion of studies, understanding is given to them, considering their financial status as an independent worker. However, these relaxations are also given contractually and the extension is sometimes given till the student gets employed, but at the cost of increased rate of interest.
Bankruptcy Reason To Defer Student Loans
Yet one other reason amongst the few reasons to defer student loans is bankruptcy. However, this is the most difficult excuse that can temporarily delay your loan repayment. The student is liable to be charged under law, if found guilty of making this fake excuse. However, in any case; the court can be lenient, when bankruptcy can be legally be proven. Under this situation, generally the time that the student might take to re-stabilize the finances is calculated and relaxation is given accordingly.
Deferring Student Loans Due To Finances
Another reason that is the most common and prevalent reasons that exempts the students from the loan payment during the agreed time can be a hard financial crunch. Under this condition, though relaxation is given, the factor that the rate of interest will increase or remain the same during the relaxation period, will depend upon the type of loan that one opted for.
Health Conditions That May Require Student Loan Deferment
The student loan deferment can also be considered in case of the poor health of the student. The student might have to re-appear in the entire session again, due to the sickness factor. This type of deferment is considered when backed by the school or the institute in which the student studies. The re-enrollment form has to be presented in front of the lender and thus, the time extends. In conclusion, all these reasons to defer student loans are too hard to be neglected by the lenders and are even considered under the law. So in essence, you can always apply for deferment, if you encounter any of the problems mentioned above.
Average Student Loan Debt Statistics
Just a few decades ago, college education used to be quite inexpensive. The scenario has changed now. The system of education has converted into more of a business. Currently, there are over 18 million undergraduates and graduates registered in the nearly 5,000 universities and colleges that are operating all over the USA. Some of these institutions have 40,000 and in some cases 50,000 US dollars, as their annual tuition fees. This does not even include the boarding and lodging expenses or other routine expenses. With the present picture, the only aid to the existing problem is taking loans from Government aided institutes. As a matter of fact, a large number of students are. As a consequence, the average student loan debt in 2011 was $22,900, which is 47% additional to what it was 10 years ago.
Student loans are meant to finance education. The loans have to be returned with time, after studies are finished. The period of repayment typically begins after the end of six months after graduation. The private or Government banks and other financial institutions provide these loans to either the students or the parents. These loans have to be paid back within a period of 10 years and the rates of interest alter each year on the 1st of July. The basic requirement to get these loans is enrollment in an accredited educational institute.
Typically there are over 60% of undergraduates who are pursuing student loans in the US. Although, the average student loan debt varies according to the institution and it is also dependent on the education program taken up by the student. Based on a survey conducted in the US, there were 21 % scholars who are pursuing certificate programs at community colleges or schools and that the average credit loan acquired by these students is over $5,000. In addition, those who are pursuing these courses as a part of some private colleges, their average credit loan was recorded to be around $5,500 a couple of years back.
The number of scholars taking loan for a bachelor’s degree is high and so is the amount of student loans taken. Around 60% of such students took these loans and the average amount was around $15,000 intended for community schools. Moreover, 70 percent students took some 17,000 US dollars as loan to get into private colleges. There were some 50 percent students who were recorded to take an average credit loan of 26,000 US dollars while pursuing a master’s course from community colleges. While 75% of students pursuing the same course from a private college were recorded to take $30,000 as loan. The average student loan debt is even higher for those pursuing doctorate courses as the fees for these courses are high. This in turn makes increases the loan sum.
According to certain studies, about 50% of students undertake doctorate programs and the sum of loan taken was around 45,000 US dollars. To sum up, 90 percent students going for professional courses took a loan, summing up the amount to 64,000 US dollars. These figures clearly indicate that with an increase in the level of education, the average student loan debt also shows a rise.
Types of Identity Theft – You Got To Be Careful!
Different organizations have divided identity theft into different types. However, the basic types of identity theft, as published by Identity Theft Resource Center, include Identity Cloning, Criminal Identity Theft, Financial Identity Theft, Medical Identity Theft and Child Identity Theft. Identity theft could be posing as a different person when held, using a different identity for obtaining goods & services, credit, making use of another’s information to pose as him/her in daily life, and using a different identity to secure drugs.
Medical Identity Theft
Identity concealment and cloning is impersonating someone by another person so as to conceal his true identity. Persons hiding from credit companies, illegal immigrants etc are common examples. A poser is a person who uses photos and personal information of another person that he obtains from social networking sites, and passes as his own. When someone uses another person’s information to receive medical benefits, it is medical identity theft. It can turn out to be life-threatening for the actual entity.
Synthetic Identity Theft
This is because such thefts result in erroneous entries in medical records that in turn result in wrong medical decisions. Medical goods, services, insurance etc are often used by the fraud through such an identity theft. These types of identity theft are quite common as it is difficult to identify the wrongdoer. When identities are fully or partially fabricated, it results in synthetic identity theft. The process involves masterfully combining a birthdate / name with a real social security number.
Child Identity Theft
Though the original birth date or name is there, still it is difficult to crack the crime as it never directly shows in either entity’s credit report. The facts might wrongly appear as a new file. Thus, this crime fools the creditors who unknowingly grant credit to fraudsters. When the imposter uses a minor’s Social Security Number for personal gain, it results in Child Identity Theft. The child might be the target of a family member, friend or a stranger.
Criminal Identity Theft
The thief may go unnoticed for years and can use the number to buy a house, obtain driver’s license and even secure credit lines. Of all the types of identity theft, the Criminal Identity Theft is the most interesting as the criminal deceptively poses as another individual when arrested. The criminal goes off the hook if he has previously obtained credentials and state-issued documents of another entity and presented a fake ID. The victim will have no clue at all.
Credit Repair Techniques That Make a Difference, Really!
Not all credit repair techniques watch your back. Some of them are total scams while some really help. Here we will advice what’s optimum and not brag about stuff that can do no good. You want to fine tune your credit score as much as possible and get it back on track and that’s what exactly we want to. It’s high time you again start enjoying the sweet nothings of life and put your credit score struggle behind. Let’s start.
Do your homework first. Then once you are ready, read this. If your credit stinks now, it won’t do so in the future. So don’t punish yourself for your sorrowful situation. You are not the only one. The first step you need to take is hire a worthy credit repair company. Here you homework will play an important part. The last thing you want is to spend fat bucks on someone who’s worthless. Be careful and be alert. Experience counts.
Your credit repair actually starts with the dispute inaccuracies. Filing for inaccuracies in your credit statement can win you the battle. You must have been left furious to find transactions that you never did. Raise your voice against this injustice. Pick up transactions that you can forcefully say are not yours. You have to justify yourself, validate your claim. Start writing handwritten letters and send them across. Handwritten letters bring you more attention than typed letters. Check for disputed accounts.
There must be some accounts in your credit reports that are showing ‘open’ or ‘unpaid’, when in reality they are closed. Pounce on them and challenge them. Get your information ready at the same time. You might be asked to validate your claim anytime. You have to take professional advice for disputing accuracies. You got to get it right. Once you are able to validate your claims and get the credit repair techniques right, they won’t take you lightly anymore.
The last technique that’s really important is – knowing when it is time to pay for deletion. This will sting you a bit but it’s helpful to complete your credit repair process. Prepare to pay off some very negative items to make your credit score look good. Don’t fall for credit repair techniques that promise ‘NO ADDITIONAL EXPENSES’. That’s not possible. This technique is most useful when you have a valid account but you want to get rid of it.
Email Identity Theft – Created by Spammers, Enjoyed by Spammers
Email identity theft is a common thing and is a form of forgery. There is not much one can do to prevent it. However, you must be cautious at all times to stay protected from spammers. If You are receiving a lot of bounce messages. Actually what’s happening is that a spammer is forging one of your email ids from the “From” section of an outgoing mail. Spammers make use of forged addresses so as not receive any ISP related complaints.
Spammers want your money, so they choose forgery through internet viruses and worms. Any address is chosen from the virus-infected machine’s contact-book and used as “From” address for outgoing mails. Addresses can also be obtained from search engines and examining DNS whois database. Thus, it’s very difficult to determine the source of the virus and by posing as a ‘known’ contact, the spammer, makes the recipient open the mail and spread the virus. You can’t conceal the ids either.
How To Handle Being A Victim Of Email Identity Theft
If you are already a victim of email identity theft, you must notify the web-hosting provider/ISP. If you don’t, your website may be shut down due to spammers activity. Be very clear about the problem to the provider. Address grievances by posting a notice on your website so that angry visitors understand the problem. Try collecting evidence in the form of electronic and printed copies of mails, and all headers, to track the spammer and also prove that you are not at fault.
Email Identity Theft: Dealing With Spam Emails
You should also know how to deal with spam mails. The wisest thing you can do is delete them altogether. Don’t post any reply to spams. HTML-capable email client that loads images automatically should never be used for opening spams. The URL used to retrieve images might also be forged. Thus, the spammer can track whether you have read the mail or not. Due to the same reason, never click on any link provided in the spam mail. That’s foolish!
In case you are a business enterprise, tell you IT people to search websites that have a collection of the online tools used for tracing website ownerships and deciphering URLs. But please, if you decide to take revenge for being a victim of email identity theft, do not point fingers at the wrong person. Remember, spammers are good in covering their tracks. Finally, make it a point not to buy anything from spammers even if the offer is tempting. There’s no need to encourage their behavior.
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.
