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Credit Strategies Raises Credit Scores

We educate you on how to raise your credit score, and keep it high, while working with your creditors and the credit bureaus on improving your credit report.

Our clients see an average credit score increase of over 60 points. With our money back guarantee, you have NOTHING TO LOSE.

Entries Tagged 'scottsdale credit repair' ↓

How to Tell if you Need a Financial Counselor

Your first clue was when your paycheck didn’t go as far as it used to. You may have started cutting back and doing without on the luxuries, and then on more important things, but if you don’t address the causes, you won’t really be able to fix the problem.  Here are some signs that you might need the help of a trained financial counselor:

You’re juggling your monthly payments and only paying the minimums
Maybe your hours have been cut back at work, or an additional expense came up that sapped your savings.  If you’re finding that you’re just not able to pay your bills, it may be time to take a look at what else may have changed. Additional fees or interest rates may be costing you more than you can manage.

You don’t know the full extent of your debt
Generally, problems begin to happen, and then build, when we’re not looking.  Especially if you’ve been making automatic payments to your credit cards and on your loans, you may not have been looking at the statements. Interest rates or credit limits may have been changed if you weren’t paying attention, and you could now owe more than you thought.

You’ve almost reached (or exceeded) your credit limit
If you’re running out of “space” on your credit cards, that means that your income isn’t covering your expenses. Once you reach the limit on your card, you’re unlikely to be given more.  Credit card companies look at how close you are to the limit on all of your cards and loans, and if they’re all high, they sense that you soon won’t be able to pay your bills.

You don’t know your credit score
Your credit score is important for securing loans on larger purchases like cars and homes, and if you haven’t been in the market for them, you may not have been paying attention. Changes in the economy mean that credit card companies have been reducing people’s credit limits, which can have a big impact on your credit score. Be sure to check and make sure that the information is correct at least once a year.  If it’s not, you might want to enlist the help of a financial counselor to straighten it out.

The Long Road of Minimum Payments

 

The CARD Act includes a provision that requires creditors to include on their statements how long it would take to pay off the debt if making only the minimum payment, including the interest that will be accrued. It also has to include what the payment should be if one would pay off the debt in three years, including interest, and then how much would be saved in interest if it’s paid off sooner.

“A lot of people think the math is wrong. They don’t realize it will take two decades to pay (the balance) off if they only pay the minimum,” said John Ulzheimer, president of consumer education for Credit.com in an article on Yahoo Finance. “That box was a clear win out of the CARD Act.”

That information may be quite a shock to many people, but it may push people into a greater awareness of their finances and how to manage them. You can get an even clearer financial picture if you combine this information from all of your credit cards.  Also look at the balance, interest rate, due date, and minimum payment for each card.

Once you can see the whole picture, you’ll probably want to start paying your cards down to avoid spending that extra amount on interest. Look at the option of paying off the card with the highest interest first. Can you transfer some of the balance to a card with a lower interest rate?  If so, be sure to look at what the balance transfer fee is and calculate that against the interest you’d be paying. If you come out ahead, go ahead and do it.

You might also want to look at paying off your lowest balance first. It will reduce the number of cards you have to keep track of, make you feel like you’re accomplishing something and allow you to put the amount of that payment toward a higher interest card.

If you find it overwhelming, or think it seems impossible to pay off what you owe, you might want to contact Mick Bernard a fully trained and certified credit expert. Trained counselors know the “loopholes” and hidden secrets to FICO and how to get further than dispute letters will get you. They know how to help you raise your credit score, and settle collections and debts.

Myths Could Hurt your Credit Score

Most Americans think they know the majority there is to know about credit cards and the credit industry.  When it comes to credit cards, however, there are actually several common falsehoods that have actually been passed from card holding generation to generation.  Here we’ll discuss some very common beliefs and practices when it comes to using a credit card – and believe it or not, many of them are purely based on myth. If you get caught up in some of them, you’re credit score could actually suffer for it.
Firstly, many Americans believe credit card accounts aren’t open until activated.  We receive a card in the mail that has a sticker with a toll free number on the back.  Most of us think that this card is not part of our credit report or credit ratio until we decide to pick up the phone, dial the number, and give the okay to activate the card.  No so, say credit industry experts!  As soon as you apply for the card, your credit reports are pulled and the account almost immediately shows up as active on your credit report.  Simply applying for a credit card can even damage your credit score.
Another common belief among consumers is that if credit card bills are paid in full and on time, there is no need to worry about the credit cards effect on your credit score.  Credit ratio basics prove this belief to be a myth, one that blissful unawareness of can hurt your credit score.
Remember that paying your balance on time and in full is great for your finances, stress level, and even prevents large dings to your credit score but there is another part of the equation you must remember.  Even if you’re doing both of these things, you still may be using too much of your credit limit.  Your debt to credit ratio which consists of your total credit limit (across all cards) and how much of that credit you use makes a difference within your FICO score.  When you hear “be wary of maxing out your cards” even if you pay on time, this is why.  When in question about why you have a low credit score/bad credit or how to repair your credit, contact Credit Strategies at 480-502-5554.

Credit Strategies
480-502-5554 * www.911CreditPro.com * Mick@911CreditPro.com

The 8th Deadly Sin – Borrowing Money

retirement-free-money-350a042109In my opinion, one of the factors which have brought our economy to its knees is instant gratification, which manifests itself in the reckless use of credit. Buy now, pay later. This is an incredibly alluring and destructive philosophy, leading to addictive behavior. The majority of divorces are caused by money issues (excessive spending, gambling, and shopaholic activities), and if you do the research you’ll find that most wars have a financial aspect to them. Throughout time we have been warned, “Neither a borrower nor a lender be, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.” and “The borrower is slave to the lender”. In my book, that says it all!

I remember a time when people took pride in saving. At that time, we weren’t held captive to our credit scores, nor was there a need to restore our credit. We simply saved up for what we wanted or felt we needed. Today, saving money is almost an obsolete concept; nevertheless, it can help you regain your financial equilibrium. Here are some points to consider:

1. There’s no need to shop for bargains if you’re going to pay with a credit card. On average, the price to borrow money (through credit cards) is 26%, where most markdowns average 5% to 20%. Do the math.

2. Don’t use the mall for entertainment purposes or because you’re bored. This only encourages impulse buying – the bane of every shopaholic.

3. Never shop without a list. This assures you only buy what you need.

4. Make sure you have the money to afford your list by keeping track of your bank balance. Use an old-fashioned checkbook ledger (free at your financial institution), and faithfully note all deposits and withdrawals. The difference between the two is your actual balance.

Most people have dug such a hole for themselves that they can’t climb out without assistance. There are reliable & honest companies out there specializing in credit score restoration and debt reduction. Online Credit Strategies is a good place to start.

Speaking Engagement: Professional Life Care Planners

We are an experienced team of legal and financial advisors, along with advocates who provide case management and coordination of care and resources.
We have come together to address the unique and complex issues surrounding disabilities and long-term care. We provide families caring for those with disabilities and the need for care, with the resources and information to empower them to make informed decisions to maintain the best quality of life.

Join The Discussion…

If you or someone you care about is grappling with issues relating to the current or future need for care of an aging parent or disabled family member, DON’T WAIT! Get your questions answered at our upcoming event. We will be answering Your Questions on these topics:

• Legal documents that address life planning versus death planning.
• Understanding your health care options in the face of health care reform.
• The pros and cons of long-term care insurance.
• Preplanning to maintain independence and control.
• Opening dialogue within the family and working together.
• Medicaid Planning and Protection of Assets

Place: The Village at DC Ranch
18501 N. Thompson Peak Pkwy
Scottsdale, AZ 85255
Date: June 10, 2010
Time: 6:30 p.m. – 8:30 p.m.
Please RSVP to 480-661-1236 x 19

Financial Reform Legislation: A Few Highlights

Capital Hill

Many of you have been asking yourself, “How do I restore my credit?” After the economy took a downturn a few years ago, many people found themselves in dire financial straits, and felt like the only way to put food on the table was to charge everyday necessities to their credit cards. Once the bills came, there was no money to pay them (and everyone knows you can’t pay off plastic with more plastic!).

As a result, credit repair company after credit repair company started springing up and running ads, all claiming they had the ability to fix their clients’ financial woes. “Company XXX was able to restore my credit in just a few months,” the ads would say. But, did they really? And even if they did, what is the government doing to keep people out of debt?

Recently, the Senate has been debating the Restoring American Financial Stability Act of 2010, which many are hoping will be the saving grace so many consumers need. If passed, the act will:

1. Give state Attorney Generals the authority to play a role in enforcing the rules created by the Consumer Financial Protection Bureau.

2. Ensure that debit interchange fees, also known as “swipe fees”, are proportional to the processing costs and generally reasonable.

3. Allow credit card companies to create minimum purchase floors when customers pay with their debit or credit cards.

4. Crack down on debt settlement and debt negotiation companies (which are far different than a regular credit repair company), requiring them to provide detailed disclosures and limiting the fees they’re allowed to charge.

All things considered, the Act doesn’t have an answer for people asking the question of “how do I restore my credit?”, although it is still possible for senators to work in some amendments to address the issue.

Update: Up front MI is 2.25%. Annual MI is .55%.

Debt vs. Delinquent Payments: What hurts more? (video)

Arizona Credit Services Requirements

Under the Fair Credit Reporting Act, consumers are allowed to contest information listed on their credit report by the three credit reporting agencies, and if necessary, to pursue legal means to correct errors.

Credit repair services offer consumers assistance when working to correct their credit report, as well as other services to help improve your credit score.  Credit repair is legal in all 50 states, though the state of Georgia has stricter regulations than most.  However, within the credit repair field, there are scam artists and less reputable companies who will may not always follow through on their promises.

It is important for you, the consumer, to understand your rights and to know what to expect when dealing with credit repair agencies.  You have the right to obtain assistance with your financial difficulties and are protected against scam artists by state laws.  In the state of Arizona, those laws are laid out by the Arizona Credit Repair Organizations Act.

Arizona Credit Repair Organizations Act

According to the Arizona Credit Repair Organizations Act, it is vital for the people of Arizona to “obtain and use credit.” Furthermore, “consumers have a vital interest in establishing and maintaining their creditworthiness and credit standing.”  Through this Act, the Arizona legislature recognizes that consumers may need to consult and hire credit services organizations who may assist them in reestablishing good credit.

However, the Act goes on to ensure these credit services organizations behave in a responsible and legal manner by recognizing that “Certain advertising and business practices of some credit services organizations have worked a financial hardship on the people of this state, often those who are of limited economic means and inexperienced in credit matters.”

Basically, what the act boils down to support for credit repair agencies and protection for consumers from unfair, misleading or illegal practices by those agencies.  Those protections include:

•    An agency will not charge money solely for referring a client to a creditor who offers them credit on terms similar to those offered to the general public.

•    Agencies can not advise clients to make false or misleading statements in order to improve a buyer’s creditworthiness, credit standing or credit capacity.

•    An agency cannot make untrue, misleading or false statements when advertising or attempting to sell their services.

In addition to these prohibitions, there are certain requirements for Arizona state credit services organizations in terms of the information they must supply to any potential buyer.  Prior to entering into a contract with any credit service agency, the consumer is entitled to a statement.  This statement MUST include:

•    The buyer’s right to review and obtain a copy of any file about the buyer, as maintained by a credit reporting agency.  The statement must also include an approximate price the buyer will pay for a copy of those files.

•    A statement of the right of the buyer to dispute the completeness or accuracy of any information in those files.

•    A complete and detailed description of the services the credit service agency will perform on behalf of the buyer.

•    The amount the buyer is obligated to pay for the credit service agencies services.

Similar rules apply to the contract between the credit service agency and the buyer, including the assurance that a “conspicuous statement” in 10 point font or larger appears on the contract, near the place for the buyer’s signature, which ensures the buyer the right to cancel the contract.  The law ensures the right of the buyer to cancel any contract with a credit service agency without any penalty or obligation within three days from the date the contract is signed.

5 Steps to a Healthy Credit Score

A lot of consumers have the mindset that making payments on time automatically equates to a good credit score.  This couldn’t be further from the truth.  Paying your bills on time is an important ingredient of your credit score; however, there is a lot more to having a high score.  Making your payments on time only makes up about 1/3 of the points in your credit score.  The other 2/3 of your credit score has nothing to do with making your payments on time.

Making your Payments on Time is the most important ingredient of having a good credit score.  Likewise, if you have a history of late payments, collections or charge offs you will not do well in this category.  The more negative items you have on your report, the more your score will suffer.  The more recent your delinquencies, the more they will impact your score.  Time will heal in this category.

The Amount of Debt you carry is by far the second most important ingredient. Your mortgages and auto loans (installment debt) are included in this part of your score, but it’s the credit card debt you carry that is really the most important part of this ingredient.  This includes anything from MasterCard, Visa, American Express, and any other revolving account you have like gas cards and even department store charge cards. The balances you carry on your cards versus your available credit calculates your “revolving utilization percentage.”  The higher your utilization percentage is, the more of a negative impact on your credit scores.  You can calculate your “utilization percentage” by adding up all of your charge card balances and dividing them by the total credit card limits you have available, then multiply that number by 100.

The Age of your credit history is a secondary ingredient.  Don’t confuse this with your age.  The longer your accounts have been open, the more points you’ll earn for your score.  Never try to remove old, good accounts from your credit report because that will shorten the history of your credit file.  As your accounts get older, you will gradually (automatically) earn more points.

Credit Mix is another secondary ingredient.  What types of accounts do you have?  You will do well in this category if you have a diverse list of accounts on your credit report.  The ideal mix is 3-5 revolving accounts, a mortgage account and an auto loan. You can have a really high credit score if you don’t have this exact mixture because this is a secondary category.  DO NOT START CLOSING ACCOUNTS IF YOU HAVE MORE THAN 5 REVOLVOING ACCOUNTS.  Remember the category we discussed in the previous paragraph?  Closing established accounts with a good, lengthy history can potential have a much more devastating impact on your score than having the proper mix of credit.  Best advice here:  if you have less than 3 revolving accounts, open a new account. If you have more than 5, only close an account if it has been opened for a short period of time.

New Credit Inquiries is the last ingredient and it also is a secondary ingredient.  When you apply for credit you are giving the lender permission to check your credit history and credit scores.  Each time this happens your credit report will reflect an “inquiry.”  To maximize your score in this category, only apply for credit when you really need it.

Now you have the recipe for an ideal credit score.

Loan Modification Primer

What is a Loan Modification?  The technical answer is the amendment of the loan to re-amortize or alter the schedule of payments for the remaining balance and/or extend the current term of the loan in order to reduce the monthly payment, the interest rate and/or loan balance allowing the borrower to keep their home.

Today’s Economy – Because of the current economy, many families can no longer afford their homes and are losing them to foreclosure.  The foreclosure rate in many states is reaching record numbers.  The more foreclosures there are, the more downward pressure is put on home values.  When there is a declining real estate market, mortgage lenders lose money.  In many cases they can lose thousands of dollars on each home they have to take back in foreclosure.  When the number of foreclosures is at a record number, it is easy to see why there are many banks going out of business.

The Feds – The Federal Government has made many announcements recently about how they will help homeowners in an effort to slow down the foreclosure rate.  It seems as though the more announcements they make and the more bail out bills they pass, homeowners get more confused.  I receive calls every week from homeowners that are so confused with their options that they think the best option is to just walk away from their home and do nothing.

Options – Foreclosure, Short Sale, or Loan Modification are the main options available to homeowners today that are unable to make their house payments.  Foreclosure and Short Sale will have a dramatically negative impact on a credit score.  A loan modification will not have a negative impact on a credit score.  In addition to being the best option to preserve credit scores, Loan Modifications will help stabilize real estate values.

Mortgage Lenders – Contrary to many beliefs, lenders do not want to take homes back in foreclosure.  They want to work with the homeowner to see if there is a viable option to help them keep their home.  They are willing to reduce interest rates, extend the term of the loan and in many cases forgive any past due payments in order to help the homeowner make their home loan payment fit their current circumstance.

Hardship – The key to a loan modification is having a financial hardship.  Hardships come with many different faces.  There are two different types of financial hardships. One type is a reduction in income. The other type of hardship is an increase in monthly expenses.  It doesn’t matter which type of financial hardship the homeowner may have, both are considered acceptable by most lenders.

Examples – Here are a few examples of a financial hardship:  A homeowner might have a reduction in pay because of a divorce, lay-off, reduction in commission or an illness.  A homeowner who was out of work for any length of time and had to live on charge cards for a while, causing an increase in their monthly payments can also be an acceptable hardship to many lenders.  A homeowner may simply have an adjustable rate mortgage that will be adjusting to a payment they can no longer afford.

Loan Modification or Short Sale – Did you know that less than 10% of homes listed for sale as a short sale are actually sold?  The rest of the homes go to foreclosure.  Even if a homeowner is fortunate enough to sell their home on a short sale, it could have a devastating impact on their credit score.  A Loan Modification does not have the same negative impact on credit scores.   A short sale can cause home values to drop because the home is being sold for less than what is owed to the bank.  When a loan is modified the value of the home is not reduced, only the monthly payment is reduced.  As more people start to modify their loan instead of short selling, home values will begin to stabilize.

The Right Answer- There are many different options available today.  Contact a professional to discuss which option is the best for you.

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