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By Sills, February 3, 2010 6:48 PM

Newly-bankrupt consumers have many questions about how their credit score will be affected. How much harm will bankruptcy have on my credit score?  How long will it take before my credit score begins to recover?

I recommend these six strategies to minimize the impact of your bankruptcy and speed up the recovery of your credit score.

1) Check your credit reports from all 3 credit bureaus.

2) If you see errors, contest them with written letters.

3) Bring any accounts you are behind on up to speed.

4) If you do have previous delinquencies, get in touch with the creditor to ask if there is anything that can be done to get the late payment removed from your credit report.

5) It is important to keep credit accounts below a 35% use threshold. If you have an outstanding balance of over 35% of your available credit in any credit accounts, make sure they get paid down or transfer your balance to another account.

6) Pay off in-store financing accounts; this kind of credit can actually harm your score.

Today there is very little human input into the credit decision making process. Instead, decisions (such as whether you receive credit and at what interest rate) are determined by mathematical algorithms used by major credit bureaus which generate a “credit score.” Fortunately, Congress and public interest groups have pressured companies to disclose their credit scoring algorithms. While the exact formulas are not public knowledge, here are five factors that are known to be considered by credit bureaus:

1) Payment history – 35% – Late payments will rapidly cause damage.

2) Amounts owed – 30% – Your credit balance owed to any one creditor should be under 35% of available credit.

3) Length of time you have maintained accounts- 15% – Rather than closing old accounts, keep them open and use them from time to time.

4) New credit – 10% – Multiple new credit applications at the same time will harm you.

5) Type of credit – 10% – Installment debt with set payments is better than open ended credit card debt. For example, finance company debt like furniture loans can harm your credit score, while auto and mortgage loans can help it.

About the Author

*The following article about how to rebuild your credit after a bankruptcy was contributed by bankruptcy Attorney Jonathan Ginsberg, our expert bankruptcy contributor whose website can be found at: http://www.thebklawyer.com/thebkblog/

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By Sills, December 30, 2009 8:32 PM

It starts with a sign – a sudden drop in your checking account balance. A call from a debt collector about a cell phone service plan or credit card you never signed up for.

The first sign that you’ve been a victim of identity fraud is always unsettling. But for many people, that first sign is just the beginning. Depending on the skills and determination of the thief, and the length of time it happens, the damage could be much greater. On average, victims of identity theft spend 500 hours and more than $3,000 repairing the damage.*

The mental and emotional stress can be significant as well. The creditors and debt collectors you have to deal with aren’t concerned with the fact that your identity was stolen, they are focused on getting their money back.

Dealing with identity theft is never easy. Knowing what to expect is the first step toward being prepared.

Damaged Credit

The most common effect of identity theft is damaged credit.The thief runs up numerous charges in your name, doesn’t pay the bill, and your credit suffers. When you apply for a credit card, a mortgage, a new apartment, etc. you have a major strike against you.

Cost to Repair Damage

Erasing fraudulent charges and correcting your credit record takes time – and money. The average victim spends 500 hours and $3,000 undoing the damage from identity theft.

Financial Loss

One of the most devastating effects of financial identity theft is when the money you’ve worked hard to save suddenly goes missing — the work of thieves who got your ATM card or checking account information. Bank policies vary as to how much they will replace, but for many victims, this money is gone forever.

Medical Benefits & Health Coverage

If someone seeks treatment with your health insurance information, the thief’s treatments could show up on your record, be taken out of your benefits, and even disqualify you from new health insurance. And most dangerous of all, if the thief’s medical history is confused with yours, your own medical care could be jeopardized.

Criminal Record

If an identity thief gives your name and personal information when he or she is arrested, the crime goes on your record. Some victims of identity theft have even discovered they’re wanted in states they’ve never visited. The negative consequences range from legal fees or jail time to problems getting a job because of convictions on your record.

Social Security Benefits

If a thief gets your Social Security number, they can begin collecting your benefits or take a job using your name, leaving you liable for their taxes. Fixing this can take years of wrangling with government bureaucracy.

TrustedID has an effective proactive solution to identity theft prevention that has been recognized and praised by The Wall Street Journal, Newsweek, The Identity Theft Resource Center and The New York Times. Our subscribers enjoy our spyware protection for their computers, fraud flag placements, junk mail reduction, medical record, personal and financial data scanning, free annual credit reports and our $1,000,000 service warranty.

As Featured In:

New Years Resolution #1: Protect Yourself from Identity Theft with TrustedID!

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By Sills, December 30, 2009 8:20 PM

Jewelry, electronics, your car – in the past, if a thief wanted to rob you they stole your valuable possessions. But in today’s information-based world, there’s something even more valuable that thieves can take from you: your identity.

Armed with personal information such as your Social Security number, credit card number, name, and address, an identity thief can drain your bank accounts and commit fraud in your name. It is possible that you won’t find out you are a victim until the thief is long gone.

More than 15 million people become victims of identity theft every year. An identity is stolen every two seconds in the United States – the fastest growing crime in the U.S. for the past four years.

How Identity Theft Happens

Your identity is one of your most valuable possessions. Your Social Security number, bank account numbers, and personal information are all a thief needs to commit identity theft.

How do thieves get your personal information? They use every trick in the book – and they’re constantly coming up with new ways.

Mailbox Raiding & Dumpster Diving

Mail from banks, institutions, and even new credit card offers contain valuable personal information which identity thieves can use to drain accounts and open new credit cards in your name. They get the information by stealing mail right out of your mailbox, or as in the case of dumpster diving, out of the trash after it has been thrown out.

Phishing

If you’ve ever received an email from a “bank” or other financial institution asking for account information, thieves could have been phishing for your identity. (The word is derived from “fishing,” because the emails are like bait.) Clicking on their link will send you to a site that looks the same as the actual institution, but actually belongs to the thief. When you enter your information, the thief has won.

Vishing

A combination of the words “voice” and “phishing,” vishing is like phishing, except the thieves use the phone instead of email. They may leave a message pretending to be your bank or some other company. When you call back, they’ll take your personal information.

Medical Benefits Fraud

Increasingly, thieves have started seeking treatment using another person’s name and medical insurance information. They can get it by stealing your wallet or hacking into a doctor’s or hospital’s computer system.

Spyware

Spyware is a malicious computer program that installs itself on your PC and then allows thieves to record your personal information – like a credit card number, password, or Social Security number.

Skimming

Skimming is a way for a thief to get your ATM or credit card information by installing their own card reader on an ATM machine. When you pass your card through the skimming device, it records your card information.

Corporate Data Breach

Trusted businesses, like your employer, your local bank, and other organizations have a great deal of your personal information stored on their computers. Thieves can gain access to this information by hacking into the network, by posing as a business partner, or after an employee loses a computer, disk or box of files.

Are you on Facebook and MySpace?

Social Networking Sites

Identity thieves are using social networking sites like Facebook and MySpace® to find out your personal information. They use the information they find on the site to pretend to be someone they’re not and coax other information out of you – like your Social Security number.

Child Identity Theft

Child identity theft works the same way as it does for adults: the thief acquires a child’s personal information, and then creates fraudulent accounts in their name. But because children usually don’t have financial accounts until they are older, no one may find out about the theft for many years, allowing the problems to be greatly compounded.

Senior Identity Theft

Seniors are particularly vulnerable to identity theft, because most have significant accumulated wealth, and are often unable to monitor their accounts carefully. Many are also less knowledgeable about technology, and more trusting of strangers and marketers, increasing their vulnerability.

Student Identity Theft

College students are another high-risk group. School registration days and frequent unsolicited offers for new credit cards provide many opportunities to share personal information and Social Security numbers. Combine that with frequent address changes and unforwarded mail and it’s a group ripe for picking by identity thieves.

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By Beth Pardue, September 21, 2009 5:21 AM

Thanks to the Internet, it has never been easier to receive and submit credit card applications. It can be very tempting to fill out all of the online forms available to you. But be careful, it could end up costing you–consider the following issues before hitting that “send application” again.


Be aware of card offers promising “pre-approved” credit. You may be a prospective customer, but you still have to apply for credit. Each time you apply, the card company obtains a copy of your credit report. All these credit card applications count as inquiries that, if concentrated over a short period of time, can negatively affect your credit score


With online credit card applications, you should also consider the security of your personal credit information. Take Security and privacy concerns seriously. Limit your online application to card companies that use industry-standard practices for security and privacy. Look for 128-bit encrypting, which scrambles your application data and requires a de-scrambler to read it.


Additionally, the card company’s Web server should use Secured Sockets Layer (SSL) technology. Look for an online application on a secure screen of the Web site. This is usually identified with a padlock or similar icon, or has a URL that begins with the word “https.” The company should also clearly state its privacy policy for handling your financial data.


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Note: This article may be freely reproduced as long as the authors bio paragraph at the bottom of this article is included, the article is published as is (unedited) and all URLs are made active hyperlinks with no syntax changes.

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About The Author
This article was written by Beth Pardue who has over 10 years of experience in the financial industry assisting clients with assorted financial needs. To learn more about credit reports or to get a free credit report online please visit: http://www.credit-report-credit-score.com

Author: Beth Pardue
Article Source: EzineArticles.com

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By Sills, September 21, 2009 5:21 AM

By: jensholz@gmail.com

When it comes to choosing a credit card, you have many options to consider as a means of achieving your goal. Ultimately you want a credit card that is the cheapest, and that gives you the most flexible terms and conditions. However, judging those two factors can be difficult for those of us that are not credit card experts. Before you decide for sure that you wish to get a credit card, why not consider the alternatives that are available?

The Alternatives

Debit Card should you want a credit card as a means of ensuring that you can pay with a card, then why not consider getting a debit card instead? This will mean that you are not borrowing any money and that they money is coming out of your bank account.

Bank overdraft you should consider using a bank overdraft if you are wanting to borrow money over a longer period of time, as you may find that it will work out cheaper than a credit card. A bank overdraft is basically like a loan of money, however all it means is that you are allowed to have a negative balance in your bank account.

Bank Loan a bank loan is often the best solution when you need a loan of money over a longer period of time, or if the amount you need to borrow is a larger amount than what a person would usually borrow using a credit card or a bank overdraft.

Friends and Family if you want to borrow money, then you could consider asking your friends and family rather than asking a financial institution. Although many people are in a position where they are not able to do this; some are, and if they can, then it can often work out to be a good solution.

Factors to Consider when Choosing a Credit Card

APR when choosing a credit card, one factor you need to look at it APR. APR is the amount of money that you will get charged for borrowing money. This amount means the interest rate that you will be charged over the course of a year, and is usually presented in percentage form.

Limit this is the amount of money that you will be allowed to borrow. When you reach the limit on your credit card, then that is you; you are back to having no money. Despite that, limits can often work well for ensuring that you keep any debt under control.

Credit Rating if you always pay your bills on time, then you will most likely have a good credit rating. If you manage to always pay your bills on time with a credit card, then this will also help to make you look like a person who is more than capable of sound financial management. Because it is important to keep a good credit rating, you should always do whatever it takes to keep your credit rating as good as possible.

About the author:
Jens Kleinholz is a president of pollera. He writes about billig Kredit and schufafreier Sofortkredit.

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By Sills, September 21, 2009 5:21 AM

First-person accounts from mortgage professionals

Douglas Muir, CEO, Credit Justice Services

As published in Scotsman Guide’s Residential Edition, September 2009.

As the owner of a national credit-repair company, I have had to surmount much criticism. I feel for the mortgage industry and the bum rap it has received of late — but the credit-repair business often receives an even worse repute and is sometimes painted as illegal and even evil.

Fighting labels such as “scam artist” and “liar” can be tough, but honest and transparent communication can help do just that. I also believe that educating clients — and making sure to educate myself — makes a big difference.

In 2007, when discussion had just begun about the since-passed Credit Cardholders’ Bill of Rights Act, I was invited to visit with staff members of Sen. Carl Levin’s (D-Mich.) office to speak about the three major credit bureaus and credit cards.

After noting a 2004 Massachusetts Public Interest Research Group study that showed 79 percent of credit reports contain inaccurate information, I challenged the group to allow me to pull credit reports on several individuals. One intern volunteered for the sampling.

When we pulled his credit report, he was shocked to discover the report indeed contained inaccurate information. His tri-merge report showed a late credit card payment that he said he made on time. The score also was 60 points lower than that of a free report he had pulled days earlier.

As we discovered these things, I told the group about consumers’ legal rights and how the Fair Credit Reporting Act empowers consumers to control their credit information. The law states that the three major credit bureaus must prove consumers’ credit reports to be true and accurate. If the reporting bureau can’t verify the information, it must be removed.

It was an honor to speak with the senator’s office and to participate in a small way with the passing of the Credit Cardholders’ Bill of Rights Act, which President Obama signed this past May. The act, which is set to take effect in February, is designed to prevent universal default, a practice in which banks raise consumers’ interest rates based on their payment behavior on other, unrelated accounts. It also will prohibit banks from randomly changing the terms of consumers’ existing contracts and will allow card-holders an opportunity to cancel cards or pay off accounts if a legitimate reason justifies an interest-rate hike.

The act also will help consumers avoid sudden hits to their credit scores resulting from lowered limits, which can create a balance greater than 40 percent of available credit and cause a credit score to drop significantly.

In essence, the bill gives U.S. citizens an important voice — their own — when it comes to credit-report fairness. It also will assist mortgage professionals, who share the goal of helping consumers fulfill their dreams of new, ongoing and secure homeownership. By confirming consumers’ rights, the Credit Cardholders’ Bill of Rights Act will provide consumers protection from banks that in the past raised rates at their whim. For mortgage brokers, this should mean fewer surprises during the loan-approval process.

As the economy continues to struggle, first-time homeowners face a tight credit market, and many existing homeowners struggle to avoid defaulting on difficult mortgage payments. Mortgage brokers and credit-repair specialists should team up to provide these consumers advice and guidance.

One way to best serve clients is to educate and inform them about their rights, choices and options. A client empowered with information is more able to make informed decisions and more likely to think of brokers and credit-repair experts with esteem rather than with contempt. As we move forward, I think brokers and credit experts can agree that our mission is to create financially independent consumers who enjoy the comfort and security of homeownership. Together, we can do that better.

Douglas Muir is a credit-industry expert and CEO of Credit Justice Services. He speaks to mortgage professionals internationally about the importance and effects of credit. Since opening in 2004, CJS has helped more than 18,000 consumers improve their credit scores, and the company is the fourth-largest credit-repair company in the U.S. Contact Muir at (904) 757-0880, dmuir@creditjusticeservices.com or www.creditjusticeservices.com.

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By Donny Lowy, September 21, 2009 5:21 AM

In this area, your work is definitely easier now than in the past. Because of the pressure from consumer advocates and regulators credit reports are much easier to read now and there have been significant changes in the credit-reporting industry. You should know that the rise of identity theft was a key consideration for lawmakers when Congress wrote the Fair and Accurate Credit Transactions Act of 2003, which amends the Fair Credit Reporting Act. When that process was taking place, consumer advocates and others called attention to the growing importance of consumers understanding how the credit system works.

Nowadays, bad marks on your credit report can determine whether you land the job you’re applying for, how much you pay for auto and homeowners insurance, and your credit card interest rate, plus whether you have to pay your utility or cell phone company a deposit. Keep in mind that you have to focus on identifying what’s bad on your reports and the information you’ll need for planning your repair effort. Remember that there are different styles and formats of credit report. However, most of them derive from one of the three super-bureaus that supplied the information being reported.

Congress understood that an informed consumer would be less likely to fall to scams, and would be able to have a stronger control of their financial well being, provided that they could understand and have access to information.

For this reason Congress mandated that credit reports be written so as to make their information
very clear to the consumer.

http://www.Justurbanlife.com is your source for credit. You can obtain loans, mortgages, credit cards, cash advances, even if you have a poor credit score. http://www.justurbanlife.com is also perfect for you if have a good credit score. For personal or business needs, http://www.justurbanlife.com is your source for cash.

Author: Donny Lowy
Article Source: EzineArticles.com
Provided by: Mobile game news

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By Sills, September 21, 2009 5:21 AM

COMING SOON!!

BetterCredit101.com will be featuring MORE information on how to establish credit, apply for credit, and how to get a credit card! Keep checking back…we’re going to continue to add information that YOU can use to get Better Credit.

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By Sills, September 21, 2009 5:21 AM

Understanding every detail of information on the credit report is an important step to repair your credit score. Your credit report carries free credit score that the lenders look at before finalizing their lending decisions. A good credit score means that you can easily qualify for loans and credit products at low interest rates and attractive terms. Conversely, bad credit rating means that the lenders will stay away from you and even if they offer credit, that would attract high interest rates.

If you are having a negative credit rating, you need not worry because you can repair your credit legally on your own or with the help of legal credit repair companies. Moreover, you still have a chance of getting a loan with credit score that is not good because all creditors have their own guidelines of granting credit. Some lenders have special loan and credit products for people with bad credit. Still you should try to improve your credit rating and take steps to improve your credit legally because a good credit rating can help the lenders to offer you loans and credit at better terms.

The Myth and Reality of Fixing Credit Rating

Some credit repair companies lure you and convince you that they can help in credit repair by fixing credit ratings. You should remember there is nothing such as fixing credit rating. No matter what a credit repair company may offer you, the fact is that nobody can remove any up-to-date legal and accurate information from your credit report.

The credit repair companies can at best help you removing the errors and mistakes from your credit reports. A legal credit repair company can help you with debt consolidation and other legal means for debt reduction and credit repair.

If you find there is any incomplete or inaccurate information in your credit report, you can request for an investigation and take remedial measures on your own. You, as a consumer, have the full right to ask for an investigation of your credit report and fix the errors legally and that too without any monetary cost. If you do not have time for the same, you can take help of legal credit repair companies who can help you with necessary steps for how to repair your credit legally.

Self-credit Repair

For self-credit repair through legal means, you need to get the copies of your free annual credit reports from the legal credit reporting companies. Read and go through the credit reports thoroughly and check if there is any erroneous information on the credit reports. Any inaccurate or incomplete information in your credit report can inadvertently affect your chances of obtaining loans, insurance, job, house on rent etc. Therefore, it is well worth to inform the credit reporting companies about the errors with documentary proofs and get them corrected. You can legally challenge the wrong entries in writing.

The Federal Trade Commission is always there with you (the consumers) in providing assistance for your legal credit repair. The FTC maintains an online database of all civil and criminal law enforcement agencies in US. It can steer you for the help you may need for your credit repair. In this way, you will notice that you are slowly repairing credit rating.

Keep patience and make smart budgeting decisions. This way you will eventually be able to pay your creditors on time and prove yourself suitable for credit. This is a slow but effective way to repair your credit legally. This approach of credit repair on your own is far successful in the longer run as compared to engaging a credit repair company that indulges in illegal means for fixing credit rating.

About the Author
Find more information on how to rebuild credit report here http://www.creditrepairtotal.com/rebuild-my-credit-report.html. Did you know that you could obtain FREE annual credit report? Check out this link: http://www.creditrepairtotal.com/free-annual-credit-report.html.

Article source:
Tips on How to Repair Credit Score Legally

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By Sills, September 21, 2009 5:21 AM

A credit card that can be gotten with a poor credit rating is known as a bad credit card. These cards give those with bad credit a chance to improve upon the credit rating they have. For those people the cards act as a rescue like this. Those that were unable to control past spending urges will find these bad credit cards provide needed training.

Secured credit cards are what these bad credit card cards are called. The person is required to open an account that maintains a cash balance with the supplier of the card in order to obtain one. What is the reason for this? Credit card suppliers are in business and they find it hard to trust someone that has not fulfilled payment obligations in the past. Profits are what business is all about and profits are put at risk by this. The balance on the account will normally earn interest from the bank or company providing the credit card. This should be checked with the company providing the card. The cash balance in the account will be the deciding factor of the credit limit that is placed on the credit card for bad credit and it is normally fifty to a hundred percent of the balance of cash. Debit cards are another name these bad credit cards are known by and this gives credit to the fact that they are more a debt giving item than a credit giving item.

The market has numerous bad credit cards available. There are four things in particular that need to be taken into consider when looking for a credit card for bad credit that is suitable for you. The amount of the minimum balance that the bank requires you to keep, how much credit (what percent of the balance will be available for spending on the secured card), any fees involved in the obtainment of the card and how much interest will be earned from the account balance. No fees or other charges will be associated with the perfect credit card for bad credit and the smallest amount possible or a zero minimum would be required to be maintained. The credit limit will also be anywhere from ninety to a hundred percent of the balance. A decent rate of interest will also be offered on the ideal credit card for bad credit.

The concept of bad credit cards is good for those that have a poor credit rating by allowing them relief by allowing them to partake in the benefit of credit cards to improve credit standings.

Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer credit card comparison site helps consumers find the Best Credit Card while avoiding high interest rates, charges, and fees.

Author: Nick Makaryk
Article Source: EzineArticles.com
Provided by: Canada duty rate

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By Jess Peterson, September 21, 2009 5:21 AM

If you are a college student, you probably have already heard about student credit cards. These credit cards work in the same way than regular credit cards do, but they have also some advantages that you should get to know if you have ever considered applying for a credit card.

Why To Apply For A Student Credit Card?

College students have many and unique financial needs. A regular credit card could suit these needs, but there are many requirements that financial institutions ask their candidates to accomplish before applying for credit cards.

Student credit cards are easier to obtain. Of course there are a few requirements to accomplish and documentation has to be presented as well as for regular credit cards, but it is a lot more simple to fulfill those requirements.

Advantages Of Applying For Student Credit Cards

First of all, you should have an employment with a fix income to apply for a regular credit card, and, if you are a full time student you know this is not always possible. Student credit cards are, as their names say, designed specifically for students. You do not have to be an employee to apply, and unlikely regular credit cards, there are no annual fees to be paid for this kind of cards. There are certain charges you will have like interest and maybe a small fee, but these charges will always be lower than those of regular cards.

Another good point to mention is that you can access to the different rewards or gifts that financial companies offer, as well as if you had a normal credit card.

Many financial companies offer for student cards owners as well as for normal credit cards owners, the possibility to access and manage their accounts online.

Where To Obtain A Student Credit Card

Although you may have received different credit card offers so far, Internet is still the best tool you have to look for your first card, you may also ask your friends and relatives which were their options and what did they chose.

Different financial companies, offer different student credit cards plans. First, try to determine what are you looking for, if low interest, a good reward program, student benefits, lower fees. And then you will be able to find and compare among those options you have, which student card suits your needs best.

How Can A Student Credit Card Help To Build Your Credit Score?

A student credit card may be the first step you give in building your credit record. This may not seem very important for you today, but you must have present that a good and well constructed credit history will turn into a car loan, mortgage, or any other loan type you may need to ask for in the future.

A Few “Always” Rules To Follow To Get A Good Credit Record

Always remember that your card should help you with your college’s needs. Do not blow your credit doing unnecessary shopping.

Always keep record of your purchases. Making a list and comparing the amounts when bills arrive, will prevent you of paying for things that you have not bought or paying twice the same purchase.

Always try to be on time and pay your bills in full, this will give you extra points in the future and keep you off extra charges due to late payments. At the same time, this may help you to start being a responsible adult.

Jessica Peterson is a Personal Loan Consultant with more than twenty years of experience. For more information about Personal Loans for Bad Credit People Guaranteed Credit Cards, Unsecured Loans, Fresh Start Loans, Debt Consolidation, Student Loans and others please visit http://www.yourloanservices.com

Author: Jess Peterson
Article Source: EzineArticles.com
Provided by: Mobile device news

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By Sills, September 21, 2009 5:21 AM

By Mark P Cussen, CFP, CMFC
eHow Contributing Writer

Instructions

1.
Step 1

If you’ve run up a lot of credit card debt, start paying off the one with the highest interest rate first. Mathematically, this will save you the most interest. However, if you have several smaller credit card balances, then you may feel like you’re making more progress by paying them off one by one first.
2.
Step 2

Start keeping VERY close track of your spending. A number of small amenities in your budget may have to be eliminated in order to make ends meet. Restaurants, movie theaters and other expensive entertainment can be substituted with libraries, art galleries and outdoor exercise. Newspapers, magazine subscriptions and cable TV are also good candidates for budget cuts. One expenditure that may be worthwhile, however, is a personal finance program that tracks your debts, assets and cash flow on a daily basis, so that you know exactly where you stand at all times.
3.
Step 3

Whatever you do, DON’T miss a payment. Late payments can really hurt your credit score, and thus make it even harder for you to secure more favorable financing. This can affect your insurance rates as well. Making the minimum payment by the deadline on your credit card is much smarter than making a larger payment a few days late.
4.
Step 4

As always, a second source of income can make a big difference to debtors. If you can earn just $500 a month extra, that’s $6,000 a year that you can apply toward debt reduction. Another idea is reducing the amount of tax you have withheld from your paycheck. Having no tax withheld could be advantageous in some cases. Of course, you’ll have to pay the tax with interest and penalty at the end of the year, but these rates are generally much lower than standard credit card rates.
5.
Step 5

Don’t hesitate to get help if you need it. Negotiate with creditors and see if you can work out an acceptable settlement. Credit and financial counseling services can be invaluable resources and may be able to point you to options or ideas that you would never find out about otherwise. They can also start you on a debt management or consolidation program to help lower your rates (see Resources below for links to credit counseling assistance).
6.
Step 6

Finally, if all else fails, see if you can get a debt consolidation loan from a family member. You can offer to pay them a rate that’s much lower than your credit card interest, but much higher than what they would get in a checking or savings account.

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By Sills, September 21, 2009 5:21 AM

If you didn’t know this already, having a good credit score is more important than having a lot of cash. Putting aside the insanely rich, most people just don’t have that much cash laying around. Some of us have only have a few dollars left over after expenses. Some of us manage to save a few thousand dollars. But unless you have several hundred thousand dollars in cash, you’re going to need a good credit score to get around.

I know from personal experience that having a bad credit score prevented me from getting into apartment after my divorce. I argued with the property manager briefly saying “But I can pay you 2 years of rent up front! Why won’t you let me live here?” She explained that by law they are only allowed to accept three months rent plus the first and last months rent. However, my application to live in the apartment cannot be approved because of my bad credit! You can imagine my frustration. But I just wanted to share with you one example why having a good credit score is more important.

Your credit score is calculated using a something called FICO. It was created by Fair, Isaac Company. It basically takes into account how much debt you have and your payment history over time. If you’ve been making regular on time payments for years, then you probably have a great credit score. If you’ve been late recently, and I mean in the last 6 months, then your credit score is going to drop. And if you been making late payments over and over in the last 6 months to 2 years, your credit score is going to be very poor. If you have a lot of relative debt, which means all your credit cards are maxed out, then that will lower your credit score even more.

So what can you do if you have a low credit score? I’m going to give you a couple of strategies that attack the to biggest factors affecting your credit score.

1.If you have old accounts that are already paid off, don’t close them! Remember, you want to keep your available credit as high as possible for as long as possible. Having more credit available versus your debt improves your credit score.

2.If you have current credit cards with a balance, don’t pay them off right away. For example: You have a $3000 credit card. Every month you charge about $2000 to it, but you pay it off before the end of the month. Although this won’t hurt your credit score, it won’t help it either. You need to carry some portion of that balance over to the next month, even if it’s just $100. Remember regular payments over time improves your score.

Some other things to consider. If you can only make one payment, pay your mortgage first! Followed by installment loans like your car payment, then your credit cards. When you have multiple payments of the same kind, (i.e. two car payments, five credit card payments), pay the one with the highest interest rate first. Even though nothing feels better paying off a small balance and seeing $0 due, you will save more money in the long run paying off the higher interest rate balances sooner rather than later. This in turn will leave you more money to pay off the small balances.

All these strategies and tips will greatly improve your credit score over time. But there are ways to improve your score much more quickly. Get a copy of your credit report and look for errors. You’re allowed to see your credit report free once a year from each of the three major credit bureaus: experian.com, Equifax.com, and transunion.com. If there are any errors, there are simple ways to have them removed. Sometimes it’s as simple as calling the creditor that reported the bad information. Sometimes you just need to write a letter challenging the error. Either way, removing errors in your credit report is the fastest way to improving your credit score.

About the Author
Robert Rogers is a writer in the Washington DC area. For more information on how to improve your credit score visitFree Credit Reports

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How to Improve Your FICO Credit Score