Bad Credit
Bad Credit
Bad credit can happen to the best of us. A series of financial
events can take place to hinder our ability to pay our debt. A
loss of a job or several high paying emergencies, whether it
be health related or due to car and house repairs, can put one
behind in making payments.
Many times people will ignore their late due payment notices for
loans which can be the worst possible thing to do. Most of the
time when you notify your bank or lender and tell them of the your
financial situation, they are willing to work with you. Some banks
will set up a payment plan that will work better for you until you
are back on your feet. Some will allow you to make payments only on the interest of a loan and not the pricipal for several months or whatever you may be able to work out with the financial institution. But ignoring notices tells the bank exactly
what you don’t want them think, that you don’t care about paying
back your debts.
Don’t let pride get in your way of asking for help. Financial institutions,
for the most part, want to help when you are in a money bind. Allow
them to work with you on a payment plan that will suit both your needs.
Connie Barker
Bad Credit – Credit Cards – Use Wisely
Bad credit cards are normally designed for people with a bad credit history. People with a low score can usually get a card specifically for their needs. Orchard bank is one such institution that provides programs to improve your Fico score as they report to the major bureaus on a regular basis. Take advantage of the opportunities available, find the best rates and start rebuilding your Fico score today.
Unsecured
The unsecured options come without any collateral, but this type of program usually comes with much higher interest rates.
Secured
With the secured options, your limit usually matches the amount that you deposit. With on-time payments you can usually be considered for unsecured offers after some time, normally 6-12 months.
Interest
If you pay off your balances in full each month, you can typically avoid high interest rates and late fees associated. But remember, by paying only the minimum each month you will incur interest at very high rates especially if you have a card designed for bad credit. Consumers with low Fico scores usually will have higher interest rates because of the risk of default. The fact that these types of programs carry a high interest rate usually 20% – 30% or more shouldn’t stop you from getting one, in an effort to get your Fico score on the road to recovery.
Prepaid
Another option would be prepaid cards, which are a great way to control spending while still being able to use plastic and maybe help that low score. The amount of money available to use on a these programs depends on how much money is deposited on the card. Both bad credit and prepaid options will allow you a chance to build your credit. Another great use for this type of card is to teach your teens good spending habits.
Bad credit credit cards are a very good concept that can provide relief to people with a low score, by allowing them a chance to rebuild there credit, when used wisely. The above options are probably the best option for anyone who has a lot of debt as well as a low Fico score. It can be very rewarding to get you back on track with the help these types of programs, but they also have several disadvantages especially if you don’t make your payments on-time or only pay the minimum each month. You may very well find yourself in an even worse situation.
Bad Credit? Avoid Credit Repair
Being in stuck in bad credit can be a stressful situation for anyone. In the hopes to get out of bad credit quickly, a person can be vulnerable to the tricks and tactics of scammers that offer instant debt relief. Yet, grabbing the wrong kind of help can only lead to a bigger problem. Instead of being free, you may find yourself stuck in worse.
When in need of repair, what are the things you should be aware of? How can you avoid being victimized by scammers? How can you protect yourself from fraudulent credit repair organizations and where can you find a real solution?
The Promise of Instant Credit Fix
The advertisements may seem attractive. After all, who wouldn’t want to be free from bad credit at the soonest time? But can you instantly fix credit? You may see a number of agencies offering quick debt relief services in exchange for a fee. It may be tempting to sign up for the offer, pay the upfront cost and watch as it goes away. But are these promises for real?
The fact is that no agency can magically turn your bad credit into good credit without requiring some effort on your part. If the negative information in your report is accurate, then it can never be deleted, unless seven years or ten years has passed.
For example, if you have a record of foreclosure which happen more than seven years ago, then you can request the credit bureau to take the negative remark off from your report. If you find unauthorized transactions in your report, then you can send a dispute letter to the credit bureau so that an investigation can be conducted. If your dispute is valid, then the necessary corrections will be made.
Nonetheless, you cannot pay money to make it magically disappear. If you really are responsible for those debts, then the only way you can improve your credit score is to pay your creditors.
If you a certain credit repair agency promises to set you free from bad credit without paying anything or doing anything, then chances are that you are dealing with a scammer.
Watch Out for the Credit Repair Trap!
The FTC (Federal Trade Commission) warns consumers against fraudulent credit repair or credit counselling agencies. Even if the agency claims to be a non-profit organization, you should not sign up for help unless you’ve checked the agency’s background and reputation.
What are the red flags of a credit repair scam? Check out this list:
Demands for an upfront fee before any service is rendered. Prevents or discourages you from checking your own report from three credit bureaus. Provides assurance that derogatory remarks in your credit report can be erased whether they are correct or not. Encourages you to dispute charges in your credit report even if they are correct. Encourages you to use an Employer Identification Number in your loan or credit application to conceal your personal credit.
For more information, visit the FTC’s fact sheet online.