Consumer credit counseling is a big service field in the United States. It is a common problem for many persons in the United States to face a potential credit card debt. To show these persons the right way to act these credit card counseling services are in the scenario.

Every year, more than one million persons in the United States visit credit counselors or credit counseling agencies. They want help to get rid of their credit card debts and regain financial control. But still consumer credit counseling services is a mystery to many; they do not know their working processes and the services which you should get from them when you hire them.

First and foremost thing that you should know is that consumer credit counseling services do not work for you. They work for the lenders. This means that they might have a relationship that will influence their advice. They will suggest loans from a specific lender as they probably get a commission from it.

Here we give you some hints about the working method of consumer credit counseling.

Suppose you visit a consumer credit counseling to get rid of your problem. They will convince the lender to decrease your interest rate- and yes, of course this is good. But the bad news is that you are still paying 90% of monthly payment to combat with credit card interest.

Here are some questions you should ask to your consumer credit counseling service agency.

* The first question you should ask is a money matter, meaning – how much will they charge you for their service. Many consumer credit counseling services even charge more than $100, which will not go to any of your creditors. So be aware and ask your first question about their fees.

* Confirm that the consumer credit service you are to join is registered with a financial institution or not. Most of them don’t have any qualification to work with credit problems.

* Enquire about the services offered at your consumer credit counseling agency. Avoid companies which offer you a quick solution to your credit problems.

* Before joining any consumer credit counseling service, read testimonials and reviews of agencies previous or current clients. This step will surely help you to choose the right consumer credit counseling agency. Most of the consumer credit counseling agencies have their official website, where you can find testimonials. If any friend of yours faced any financial problem and ever visited any consumer credit counseling service, don’t hesitate to ask them. As they are experienced, they will help and guide you the right way.

* Be sure that the agency you are going to is registered as BBB, Better Business Bureau, which is a quality sign.

With diligence, patience, time and proper credit counseling you can become debt free.

Filed under: Credit & Debt by Cris
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There are many ways to get ahead financially: attend seminars where you cut up your credit cards with hundreds of other people, participate in debt consolidation services that help you take out a home equity loan or refinance your home, or you can transfer debt on one credit card to another credit card with an introductory rate of 0% (which goes up to 12% six months down the road). The reason these methods don’t work is because we don’t concurrently cut our expenses while implementing these strategies. Even if were making more money, unless we cut expenses, we will continue to spend more money than we have and incur debt. Manage yourself and your money. Money is like food; we don’t eat only when were hungry, and we certainly don’t spend only when we need something.

Beware: Debt forgiveness can hurt you. The company that forgives your debt can issue a 1099C, which means the forgiven amount gets added to your taxed income.

Your credit score (also called your FICO or Beacon score) will affect the interest rate you’re able to secure. Credit scores range from 300 to 850. Where are you on the scale?

What’s in a number?

600 and below and you are in serious trouble.

600 to 650 you probably will have a difficult time getting credit, and if you do it will be at higher rates.
650 to 700 is a decent score
700+–excellent score

How you got your credit score:
a)Payment history (35% of score). Make payments on time or early.
b)Amounts you owe (30% of score)
c)Credit history (15% of score). The longer you have credit, the higher your score can be.
d)New credit (10% of score). New credit cards.
e)Type of credit you have in use. Mortgages, Bloomingdales, etc.

There are three reporting services that can give you your score: Equifax.com, Experian.com and Transunion.com. At least once, do an experiment and order a report from all three. They probably will provide a complimentary report each year, per person. You will most likely find inconsistencies in the reports such as missing and incorrect information. Each time a credit report is run on you, your score is lowered by two or three points. You still want to shop around for a mortgage, but consider using a mortgage broker who runs one report to shop around the loan. If you go to five different banks, that can drop your score 15 points.

Filed under: Credit & Debt by Cris
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These days most of us apply for loans to buy a house, set up a business, or buy a car. Many students take loans to further their education. How soon the loan is sanctioned, the rate of interest, and the amount sanctioned will all depend on your credit score which is based on your credit report. People with scores of 700 and more are the beneficiaries of lower interest rates and quick sanctions. Imagine if your score is greater than 700 and another person has a score of 698 then the person with score 698 will have to pay interest that is higher by one-half percentage point.  A half percentage point adds up over the life of a loan.

A credit score takes into consideration: payment history, current earnings, current debt, length of credit history, types of credit utilized, and your new credit. If two or more members of your family are earning then apply for a loan jointly.

You can take a few simple steps and ensure that your credit score is higher than 700.

Maintain a long healthy credit history. Keep alive your oldest credit card and be sure to pay all bills in time. Never keep bills pending over a 30 day period. If in a crunch at least pay the minimum charges due.

Do not have too many credit cards. Learn to say NO, to offers of free credit cards. And, maintain a good credit limit. Avoid using all the available credit on the cards.

Ensure that the credit report you have is accurate and that there are no errors clerical or otherwise.

Plan your finance such that it is healthy. Consider debt consolidation.

Never suddenly close or open accounts. This leads to suspicion that you are trying to manipulate your credit report.

If you are having problems speak to your creditors well in advance and work out a stage wise repayment. Request the creditor to refrain from reporting the late payment.

Late or delayed payments drive your score down so always pay bills dead on time. Keep a tab on due dates and ensure that all bills are paid.

Learn all you can about credit reports and scores and keep the criteria in mind while managing your finances. Maintain the debt-to-credit limit ratio and, if need be take the help of a finance planner. All you need to do is to sit down and curtail expenses, plan you income-expenditure , and avoid spending what you have not earned.

Filed under: Credit & Debt by Cris
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