One of the most important things when it comes to getting a loan for a house or a car is our credit scores. Most lenders will check with the credit agencies and see what your credit score is before they approve or deny you a loan. You must be proactive when it comes to your credit score and it is up to you to make sure that all items on your report are accurate. There are some fast and easy things that you can do to always make sure that you maintain a high credit score.
The first thing that you need to do is to get a free copy of your credit report form all three major reporting agencies. They are required to give you a free copy once a year so make sure that you take advantage of this before you spend money to get your report.
Next you need to go through the report and check for accuracy because if there are items you do not agree with being reported then you must dispute these items with the agency. The agency after they get your dispute has 30 days to verify if the items is accurate or not. If they can not verify it within 30 days then by law it must be removed from your credit report.
Also it is most important that you always pay your credit card bills on time and this will help raise your credit score as well. One other great way to improve your credit score is to keep low balances on your credit cards. Many people charge up there balances too high and this will cause your score to be lower.
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Easy Ways to Improve Your Credit Score
How Does Debt Consolidation Work? The Plain Truth!
There is nothing worse than being strapped for cash and finding that your debts are continuing to mount. What starts off as a reasonably small sum, increases constantly due to the high cost of interest in today's financial market. It may be that when you originally borrowed you felt you would be able to pay it back, but your situation has changed, and the economy has changed. Now you have multiple debts, and less hope of paying them back. This is when debt consolidation can be an extremely helpful debt removal tool.
Debt consolidation is usually the penultimate step in your financial management. It is to be considered, and made, when the only other option is to file for bankruptcy. Although your credit rating will still be low after debt consolidation and so you will need to do some work to re-establish a good credit rating. However, debt consolidation looks better then bankruptcy. So how does debt consolidation work?
Debt consolidation companies will take a look at all of your individual debts. They may get in touch with the individual companies to attempt to lower your interest rates. After seeing how much money will be required to cancel these debts, they will offer it as a loan, at a lower interest rate then the money that you will be paying for the debts individually.
Now, you will only be making one lower monthly payment, to the debt consolidation company. It will ensure that all your debts are paid, and that you will be paying a lower amount each month, making your debt more bearable. As this is a long term this could mean that you pay more money overall than you would have had to pay for your debts, but this is a debt that you should be able to keep up on the repayments of.
It is also important to note that most good debt consolidation agencies will also provide you with credit counseling. The counseling is designed to ensure that you do not make poor credit decisions in the future, and so do not have to take that action again.
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One of the Biggest Mistakes That Can Be Made While Consolidating Your Debt
Debt consolidation basically requires taking out a loan to pay off many other debts.
This is often done to secure a lower interest rate, secure a fixed interest rate or just to get all your outstanding debt rolled into one monthly payment with only one loan to service.
Consolidating debt is taking a number of unsecured loans and/or debts and combing them into another unsecured loan. Most of the time it is actually rolled into a loan which has been secured by an asset that serves as collateral, such as a home, ( a mortgage).
By securing a loan with an asset it gives you an advantage to receive a lower interest rate, but because the loan is secured the owner of the property that is being used for collateral, agrees to allow a forced sale (which is known as foreclosure) of the asset in order to pay back the outstanding debt if the property owner fails to make payments as agreed upon.
Because the loan is secured the risk to the lender is reduced. Which allows for the lender to offer a lower interest rate.
Usually debt consolidation is advised mostly for credit card debt. Credit cards usually carry a much greater interest rate than even an unsecured loan. Taking all the credit card debt that is carrying a much higher interest rate, which usually generates a much higher monthly payment, and rolling them into a loan which is secured by property such as a house or a car, the total interest and payment will be much lower. This will allow you to pay off the debt much quicker, incurring less interest.
One of the biggest mistakes that can be made while consolidating your debt, is if you continue with old habits and incur credit card balances again. You will find yourself deeper in debt, but this time you might not have the ability to make both payments, falling behind on your loan payment and being at risk of losing the property that you have secured your loan with.
Before consolidating your debt with a secured loan, research other ways you might be able to consolidate your unsecured debt, never put your property on the line unless it is absolutely necessary. Research this and make your decision wisely.
Remember there are many other ways to consolidate and/or eliminate debt without having to secure a loan using your property and risk losing it !!!Sometimes, debt consolidation companies can discount the amount of your loan. When the debtor faces any possibility of bankruptcy, a loan consolidator will buy the loan at a discount. But be careful, this type of consolidation can affect your ability to discharge debts in bankruptcy.
It's Time to educate yourself, Get Out of Debt and Increase your Net worth. Many opportunities are available, both online and offline for you to help increase your income for you to get back on your feet or use for wealth building purposes. Cut up your credit cards and stop using your credit to fall into debt. Create your own money to buy the things you desire, instead of falling into debt. Visit http://www.aroadtoriches.com to educate yourself and learn the opportunities available to you.
How to Best Use Your Debt Consolidation Opportunities
Sometimes, even when we try our best to manage our finances, debt problems can get in the way. Unexpected circumstances such as sickness, loss of job, divorce, or business failure can quickly put us in a bad debt situation. However, being in debt doesn't have to be a hopeless situation. In this article, we'll discuss how you can flee from debt through different types of consolidation.
Credit Counseling
Some credit counseling agencies would recommend a debt consolidation program for consumers with extreme debts. Finding a reliable credit counseling agency should give you the assistance you need in handling your debt problem. An experienced credit counselor should give practical and efficient advice on how you can create a repayment plan, avoid incurring new debts, and prioritize your repayment.
Debt Consolidation Loan
One way to consolidate debts is by obtaining a loan. The money loaned would be used to pay all your existing debts from different creditors. In turn, you'll be subjected with only one lender - your debt consolidation company. Thus, the stress and pressure of dealing with different creditors is instantly eliminated. Furthermore, by consolidating debts into a single account, you won't have to pay multiple interest rates so you can save more and use the money for repayment.
Debt Repayment Representative
A debt repayment agency can negotiate with your lenders to reduce your debts and modify your payment terms. Each month, you'll submit your payments to your debt repayment agency- who in turn, would distribute your payments to the appropriate lenders. Nevertheless, it's very important to make sure that you're dealing with a reliable company and that all your payments are submitted accordingly.
Credit Repair Clinics
Watch out for agencies or even non-profit groups who promise to give an instant "fix" or instant "repair" to your debt problems. Remember that the only way you can get over your debt problem is by paying off your debts. If the charges in your account are accurate, there's no way an agency can erase or delete these charges from your credit report. Even worse, these agencies who disguise themselves as "credit repair groups" may use your personal information against you.
Debt Settlement
A credit counseling agency may also negotiate with your creditors through debt settlement. Debt settlement can reduce your debts from 50% to 60% or even more. However, if your creditor agrees with a settlement, you are expected to submit your payment in full at the soonest possible time.
Copyright © 2008 Consolidate4Free.com
Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with Free Debt Consolidation Advice since 1990. For years she has helped people with loan and credit problems especially pertaining to Debt Consolidation and Credit Card Debt Consolidation. Copyright 2008.