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How To Erase Bad Credit

February 11th, 2009

Your credit record affects all the aspects of your life and not just finances. Bad credit record can create problems for you at the time of purchasing a property or car, applying for credit cards and in few cases, a job. Hence it is important for you to keep your credit record clean.

Due to unfortunate events, if you find your credit record has gone bad, take action to rectify this problem immediately. An intelligent beginning can be made by asking the credit-counseling agency for assistance in repairing your credit. These agencies are staffed by trained and experienced people in the area of credit. But do not lose sight of the fact that these people will only help you sort out the problem but will not actually do the deed. You may have to do some work to get your credit record back on the track.

Another smart thing to do is to ask for your credit report and rectify any errors in it. This method is not only easy but is highly efficient method of making you aware about your credit and informing you about your credit status. Get the credit score from Trans Union, Experian and Equifax. Most of the times, some erroneous information is present in the report, harming your score. If you notice any such information, send a letter to the credit bureau immediately, pointing out the mistake and informing them of the corrective action.

Simply by repaying the outstanding debts is the best method of wiping off bad credit. This may not be so simple since lack of funds is the reason for bad credit. But you can easily enjoy a life without debt and good credit rating. To enable you to do that, prepare a budget. Make a list of all your expenses that consists of your daily living expenses and monthly bills. Now check it against the income. If your expenses exceed your income, trim down your expenses as much as possible.

Paying your bills on time is another vital step in repairing damaged credit. If you can show stable income and timely payment to lenders, your credit record will show a marked improvement with 2-3 years. Restrict the number of credit cards you use or possess. Stay away from bankruptcy, tax liens and collections at any cost. You can request your friend or relative to co-sign a small loan to enable you to repay the old debts.

Adding positive reports to your credit history will also help you overcome the stigma of bad credit. You can do this by opening a new savings account, getting a low interest credit card and keeping a low balance. Refinancing with a home equity loan to repay the old debts will also add positive reports to your credit history.

Repairing bad credit is not an impossible task but is quite time-consuming. It may take 5-7 years to get your credit record back on track. Your credit score might show marginal improvement, as you go on using the process of repairing your credit, but the damage done to your credit will not be undone quickly. However, patience brings its own sweet rewards and at last you will be free of the stigma of bad credit.

7 Payday Loans Tips

February 11th, 2009

Payday loans are short-term loans that are available as a cash advance against your paycheck. You have to show the lender the proof of the salary and give a postdated check, whose date is generally a month after releasing the loan. There is no credit check to get this loan approved.

Payday loans are lucrative financial solutions in case of emergency, when you have a short-term cash crunch. However they can be very risky for the inexperienced borrowers or the people who cannot control their cash flow. Fees that initially appear to be low and affordable can grow into a huge amount within a few months. Some loans carry an APR starting from 300% to a very steep 600%.

Though not a bad alternative, they can easily go out of control. While they offer short-term cash solution, they also carry high risks that at times can be far more than the benefits.

Remember these 7 tips why you should keep the payday loan as the last option.

1. The net amount you get is lesser than the amount written on the check. The lender will take finance charge from the loan amount as his profit. This charge is generally $15 to $50 per $100 during the pre-determined duration of the loan. You have to draw a check with the loan amount + fees. If you fail to comply, you will have to pay stiff finance charges.

2. The account balance may fall short of the check you have issued to the lender. Once the loan is due and you fail to pay, the lender will generally persuade you to roll or renew the loan. Now you have the burden of bigger loan with late fees and extra finance charges. You might even use the borrowed money to pay the steep fees.

3. The state regulations stipulate that the loan term should not exceed 30 days. But the lenders sidestep this issue by giving loans whose term is at least 31 days, putting you at the lender’s mercy.

4. Payday loans are emergency loans and are supposed to be repaid quickly. But most of the times, this does not happen. Since the borrowers consider this type of loan cheap and convenient, they let it roll over. This causes the loan amount to swell unless the borrower has sufficient funds to repay the loan at once.

5. Payday loans are risky as they are meant for people with low-income, who would not get the normal loans. Lenders ignore the fact that people who already face cash crunch will experience more problems in repaying the loan.

6. Some payday loan sites automatically ‘roll over’ a loan and charge the renewal fee on the date of the expiry of the loan. Other sites necessitate the borrowers to accept a contract that prevents the borrowers from filing bankruptcy or taking legal action against the lender. This means the borrower shields the lender.

The payday loans can be addictive and become a regular option instead of the emergency one, if there is no other means of funding. Due to their easy availability and approval, these loans can be tempting.

If there is a need to borrow against your pay, ensure you get all the facts straight and understand the downside of the loan. Try to search for the lender offering the lowest rate and find out about the various fees included in the loan, to get an idea of the exact amount you will get, the final amount you will pay and the time limit.

If there is a problem due to payday loans, consult institutions offering or low-cost aid in negotiating and lowering the interest charges and effectively your monthly payments. You should also improve your money-handling skills to reduce or eliminate totally the necessity to take these loans to meet the expenses.

Payday loans are excellent short-term solutions to meet urgent money needs but if you throw caution to wind, you can sink deeper into the debt trap that can become a liability. To minimize the risk of a payday loan provide for adequate funds to repay the loan when the due date approaches and pay on time

The Same Day Pay Day Loan

February 11th, 2009

You can easily get a same day payday loan only after 24 hours are over. It is extremely rare that you get the same day payday loan on the same day on which you have applied for it. Generally there is a time lag of 24 hours before the money is transferred into your account. Most online and offline payday loan companies make this kind of false advertising. But what many do not know is that these companies define a day as 24 hours or a full day.

After you apply for a same day payday loan, major portion of the day is usually spent waiting for the fax or a call informing you that the loan is approved. All the loans have to be approved before further processing, irrespective of how urgently you need the money and the advertising of the payday loan company assures you.

At times, the loan approval can be very time consuming. It involves faxing a blank check along with your identification to the payday loan company. You first have to photocopy the ID and that can mean the trip outside your home. If that happens, you can simply visit the payday loan office closest to you to save time.

Once you have sent across your ID and a blank check, you may have to wait for the approval. The same day payday loan company may call up your employer to find out if you are still employed. They use this method to verify that you are employed and your paycheck will repay the money lent to you by the company.

Online Unsecured Personal Loans

February 11th, 2009

An unsecured loan is a loan that does not ask for any collateral as a security for the funds borrowed. By and large, the interest rates on these loans are far higher than the corresponding secured loans due to their high-risk profile. An online unsecured personal loan is one of the unsecured loans whose interest rate is very steep. Before applying for one, read on to find out all about this type of loan and decide if you need one.

An online unsecured personal loan is also called as a Payday loan or a Cash Advance loan. These names imply that this is a short-term loan that you can use to meet your financial requirements till you get your paycheck.

These are the distinguishing factors of an Online Unsecured Personal Loan:

Loan amounts range from $100 - $5000.

Loan duration is very short, generally 7, 14, or 30 days.

Very high interest rates, starting from $10 to $30 for each $100 borrowed.

Prompt approval time, normally within an hour.

Loan amounts are transferred into your checking account.

Loan funds are withdrawn from your checking account..

Some lenders offer 4 term extensions.

You should opt for an online unsecured personal loan only if you have no other means of finance. If you sum up all the fees levied on this loan, you may be charged as much as $300 on a $1000 loan borrowed for a week. Some states consider these offers as illegal and the state attorney generals are closely monitoring them.

However if you opt to go for an online unsecured personal loan, implies there are no other sources of funding available to you. This happens if:

You have just filed for bankruptcy and need cash urgently.

Your credit rating is in a deplorable state that nobody is willing to loan you even a small amount.

You have exhausted all the normal sources, your credit card has reached its limit and the cash advance limit is exhausted.

But remember, caution is the watchword when it comes to applying for these loans. Ensure that when the loan period is over, you will already have funds in your account or else your situation could worsen.

Online Unsecured Personal Loans

February 11th, 2009

An unsecured loan is a loan that does not ask for any collateral as a security for the funds borrowed. By and large, the interest rates on these loans are far higher than the corresponding secured loans due to their high-risk profile. An online unsecured personal loan is one of the unsecured loans whose interest rate is very steep. Before applying for one, read on to find out all about this type of loan and decide if you need one.

An online unsecured personal loan is also called as a Payday loan or a Cash Advance loan. These names imply that this is a short-term loan that you can use to meet your financial requirements till you get your paycheck.

These are the distinguishing factors of an Online Unsecured Personal Loan:

Loan amounts range from $100 - $5000.

Loan duration is very short, generally 7, 14, or 30 days.

Very high interest rates, starting from $10 to $30 for each $100 borrowed.

Prompt approval time, normally within an hour.

Loan amounts are transferred into your checking account.

Loan funds are withdrawn from your checking account..

Some lenders offer 4 term extensions.

You should opt for an online unsecured personal loan only if you have no other means of finance. If you sum up all the fees levied on this loan, you may be charged as much as $300 on a $1000 loan borrowed for a week. Some states consider these offers as illegal and the state attorney generals are closely monitoring them.

However if you opt to go for an online unsecured personal loan, implies there are no other sources of funding available to you. This happens if:

You have just filed for bankruptcy and need cash urgently.

Your credit rating is in a deplorable state that nobody is willing to loan you even a small amount.

You have exhausted all the normal sources, your credit card has reached its limit and the cash advance limit is exhausted.

But remember, caution is the watchword when it comes to applying for these loans. Ensure that when the loan period is over, you will already have funds in your account or else your situation could worsen.

Benefits of a Bad Credit Personal Loan

February 11th, 2009

Bad credit personal loans are fast becoming popular due to rise in the number of people with bad credit. Anybody can have a poor credit history. Getting a normal loan under these circumstances is difficult or if you get one, you will be charged a higher rate of interest. This is where a bad credit loan comes into play. You can use it to repay your missed payments on an older loan or mortgage arrears, had a County Court Judgment against you or ran into problems with your credit cards.

In the olden days, poor or bad credit rating meant that getting a secured loan was impossible. But today, rising numbers of lenders have accepted the fact that bad credit in today’s world is inevitable and have come out with various secured bad credit loans to provide finance for these people. These loans are finding increasing number of takers due to spiraling credit problems. As a result, the interest rates have become competitive.

A bad credit record does not imply that you will not get a secure personal loan. If you own a home, it is very easy for you to get a secured bad credit personal loan.

Bad credit personal loans can be easily applied online. If your credit rating is poor and have been unable to make timely payments previously, you can easily get Bad Credit Personal Loans, if you own equity in your property. If you own a home, whose value exceeds the mortgage on it, you can use it as collateral to get a secured loan.

If you have County Court Judgments and mortgage arrears, you can avail of other loan plans. They do not take into account the number of monthly arrears or County Court Judgments against you. All that they want is that you should own equity in the property, and then you can get a loan plan customized as per your situation. Besides there are loan plans to help you improve your credit rating, if you have fallen back on your current credit payments.

A Bad Credit Personal Loan helps in re-establishing stability in your life if you own a property with your share of equity. It gives you the flexibility of using the money to fulfill your dreams. You can borrow between £5,000 and £75,000, till 125% of your property value in few cases.

A Bad Credit Personal Loan is a cheap loan that uses the security on your home. It unties the spare capital/ equity in your property to use anyway you wish.

Personal Loan to Consolidate Bills

February 11th, 2009

Everyone has to pay the bills, but the way we handle these debts can make a world of difference to our finances. Consolidating various bills and credit card debts into a personal loan is an efficient method of improving your finances.

The debts come in two types. The first type of debt is meant for personal expenses and is bad. This involves purchasing clothes, jewelry and consumer electronics on credit. This debt should be strictly regulated and kept at the lowest. There is no reason to take credit for this type of items and saving for them is the best way to get these items.

The second type of debt is called good debt. It is meant for buying necessities like home and a car to help you in commuting to work or debt that will provide a source of income like loan for the car that can be rented out.

While going for the debt, always chalk out a plan to consolidate that debt later on in the future. A home equity loan is an excellent option for consolidating. Besides reducing the interest rate, there are additional benefits of utilizing your equity.

The other option is to consolidate this debt into a personal loan, if you do not own a home. You should investigate this option very carefully. You have to weigh the terms of the personal loan against the terms of your current loan and find out if the personal loan is really a better alternative to your current loan. Ensure the duration of the new loan is not more than that for current loan. The interest rate should be preferably lower or if not available, should be equal.

How Bankruptcy Affects Student Loans

February 11th, 2009

It is difficult to eliminate a lot of government student loans and even bankruptcy will not help. The only method of resolving this type of loan is to show that they cause a lot of hardship to you and your finances, while declaring bankruptcy. But this is a tough point to prove because bankruptcy filing resolves all your other debts.

If you want to resolve the problem of the student loans, you should be able to prove that you are unable to repay the debt as per the schedule handed over to you and each time you make an attempt to repay as per the schedule; you have been unable to pay. You need to adopt an honest and sincere approach. Do not lie to your creditors and make a genuine effort to show that you are trying as hard as you can to get the necessary money but have failed.

It is the responsibility of the bankruptcy judge to decide the items that can be discharged and those cannot. Some judges may provide for these discharges and if you happen to get one, there is no need to repay these loans, either completely or partially. It is at the discretion of the judge to decide on it.

You should remember that though the lenders will not send you any bills when you have filed for bankruptcy as they have to wait for your bankruptcy to be discharged, the interest will still be accruing on the loan. You do not pay the loan or the interest, but once your bankruptcy is discharged, you will have to encounter a lot more problems than before.

Student loans are highly flexible, offering varied choices than the most of the other loans. If you find it difficult to pay off the student loans, talk to the lender. Inform them about the problem and you will find that they will be happy to help you out. If you find it difficult to meet the payment schedule, ask the lender to prepare a new one. Do not be afraid of talking to the lender but it will help you and prevent you from getting into more trouble. If you have failed to pay the loan, register for programs like rehabilitation programs to get out of the default. These programs are very useful if you show good faith and attempt by paying a minimum amount for a definite period of time. If you can stick to this routine, your lender will understand that you are reliable and they will help you get over the default.

Loan consolidation is another excellent alternative to bankruptcy. The Direct Loan Servicing Center, run by the Department of Education offers you various options to choose from to help you repay the loans. Their standard plan is excellent, very simple and efficient to carry out. Simply pay $50 each month till the whole debt is repaid or till 10 years are over, whichever happens earlier. Another plan requires you to pay for the next 12-30 years. It is excellent for people struggling to pay the debt and meet other expenses; but it is the costliest one as 30 years of interest makes the sizeable sum of money.

Talking to your lender if you are in financial trouble is the best bet. Though you cannot solve your debt problem immediately, knowing that you have options will put your mind at ease.

Buying A Home After Bankruptcy

February 11th, 2009

If you have filed for a bankruptcy on your credit but need a mortgage to buy a new home, it was an impossible task in the old days. But now the things are looking up with bad credit becoming a norm instead of exception. Today you can easily get a mortgage even if you have a bad credit, and the lender in this case will stress on two major factors: income verification and a down payment.

After you file for bankruptcy, many lenders will not approve your mortgage application for at least 2 years since the period of the bankruptcy discharge. Once this 2-year wait is over, getting a mortgage is quite easy. Quite a few times, you can easily get 100% financing too. This is feasible provided the credit bureau has been informed about you making the timely payments, after the bankruptcy has been discharged.

If you need mortgage after bankruptcy but before 2 years, your payment record should be nearly clean once your bankruptcy is discharged. Some may even require you to make a down payment. A small amount that is about 3-5% of the loan amount can be used as a down payment and will improve your chances of getting approved.

Use the following suggestions to procure funds for the down payment for your mortgage while having money saved in the bank:

Ask the friends/relatives to lend you the money or gift it to you. Once you get the 1st mortgage, you can then apply for a 2nd or 3rd mortgage that is equal to the entire value of the house and use it repay your friends/ relatives. If you have taken the money from friends/ relatives as a loan, it is imperative that you disclose the same to the lender. Many lenders have strict laws regarding the source of funds for down payment and if you fail to inform the lender clearly, it can be a case of cheating the lender.

Take advantage of down payment assistance programs like Neighborhood Gold or the Nehemiah program. These programs are meant to assist the seller in providing you with a down payment. Taking a down payment from the seller of the property is generally illegitimate, but these programs make it legitimate. Various other down payment assistance programs provide grants and there is no need to repay the money. You can easily get the information about these programs on the Internet.

Withdrawing money from investment programs like 401K is another option. Follow the same process as given in the first solution.

What To Do When Your Credit Card Is Lost Or Stolen

February 11th, 2009

Losing wallets and purses is a common occurence. If they contain your credit cards, then you should take immediate action. There is no need to panic as all the major credit card companies have defined the guidelines that you should follow to protect yourself against the loss or theft.

If your credit card is stolen, immediately bring the matter to notice of the company. Most of the companies provide a toll-free number or an online service exclusively meant to deal with this issue.

The federal law states that you are responsible for only the first $50.00 of any fraudulent charges incurred on the card. But it is still essential that you report the lost or stolen card though you won’t have to face any financial loss. The other benefit of informing the company quickly before any fraudulent use is that they will waive the $50.00. But read the details on the credit card offer.

When you get the bill after the card is lost or stolen, scan every charge on the bill carefully. If something crops up that is not incurred by you, inform the company in writing immediately. Ensure the letter contains the date on which you informed the company about the misplaced card and dispatch the letter to the billing department. Send it separately from the payment as there is every chance that it will be misplaced.

Things work slightly different for the debit card. The amount of liability that you will incur depends on how soon you report it as lost or stolen. If you do it before it is used again, you do not have to bear any fraudulent charges. However a slight delay of even 2 working days means your liability may go till $500.00 of any fraudulent charges incurred on the card.

Check your bills regularly after the card is stolen. Inform your bank of any objectionable withdrawals from your account that happened at the time your card was lost or stolen. You can make a phone call, but pursuing with a certified letter that contains the day when you informed the company about your stolen or lost card. This will clear you of any liability.

Keeping track of the stolen or lost cards is an ideal method to prevent stolen or lost cards. Find out where they are located throughout and do not disclose the pin number to anyone. The pin number should be undecipherable and not something simple like the birth or anniversary date or phone number. The number should make sense only to you and not to anybody else.


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