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Credit Repair Archives | Ovation Credit Repair Services

Feb 06
0
Women Curb Spending Habits

3 Easy Ways to Curb Your Spending Habits

By | Credit Cards

Spending less on your day-to-day life can help you put extra savings away, whether for an emergency account, a retirement fund, or even a vacation. But when it comes to actually saying no to swiping your card or hitting a purchase button online, you may have a harder time sticking to your savings goal.

Before you give up, try out these three easy ways to curb your spending habits. They’re not difficult to implement and you’ll notice a major difference in your bank account when you keep up with them each week and month.

1. Purge What You Already Have

It may seem counter-intuitive, but having a ton of stuff in your home can actually lead to buying more stuff. For starters, you probably don’t know everything you have. Think you’re out of shampoo or conditioner? You very well may have a brand-new bottle crammed at the back of your bathroom vanity. Spend a couple of hours to clear your space of clutter and take inventory of what you already have. You may be surprised by what you find. Plus, you won’t be tempted to buy tons of organizing containers and other supplies because you don’t have any clutter. It can be an incredibly freeing experience while simultaneously leading to better long-term spending habits.

2. Reduce Your Food Spending

Another way to curb your spending is to be mindful of what you’re spending on food and make a concerted effort to slash that number. Start off by adding up everything you spent on food and dining out last month. Even if you reduce that number by 10 to 20 percent, you’ll notice huge savings over the course of a year. You don’t have to be a crazy couponer. Instead, try these simple hacks to reduce your food spending.

Prep Your Breakfast and Lunch

The Internet is brimming with easy, budget-friendly breakfast and lunch ideas that are designed to help you avoid picking something up, no matter how busy you are. You can go all out, making and freezing breakfast burritos for a week, or do something as simple as getting a bag of bagels rather than stopping at the bakery on your way to work.

Leftovers for lunch are always easy (and prevent you from growing a mold experiment in the back of your refrigerator) and it’s simple to keep some sandwich materials on hand. With so many grocery delivery services available, you can do your shopping in 15 minutes online, see how much you’re spending before you check out, and avoid last-minute impulse buys.

Preplan How Often You’ll Eat Out

Depending on your financial situation, you likely don’t need to deprive yourself of ever going out to eat again. If you’re regularly struggling to make ends meet, you may want to take a total hiatus until you regain your financial footing. But if you just want to curb your spending in general, all you need to do is set guidelines for yourself and follow them.

Maybe that means allowing yourself one happy hour a week and one night out with friends. Or perhaps you commit to a single family date night twice a month. Figure out how much you want to save each month and use that number to create your social calendar.

Shop Your Pantry

Chances are, you have some kind of pantry space holding non-perishable food items. Before you do your weekly grocery shopping (remember, online makes it easy!), first figure out what food you already have and use it to inspire your grocery list. Also note what may be going bad in your refrigerator soon, especially when it comes to fruit and vegetables. See how low you can get your grocery list by shopping your own kitchen first.

3. Hide Your Credit Cards

Credit cards make it all too tempting to buy things we don’t need or can’t afford. If you’re really having trouble curbing your spending, hide your credit cards. Stick them in a drawer or go the extra mile and freeze them in a bowl of water. To really do this well, however, you also have to go to your online accounts and delete your saved credit cards (Amazon Prime, we’re looking at you!). That way there’s no temptation whatsoever to mindlessly shop from your sofa while watching Netflix.

Have debt and overspending affected your credit score? Ovation Credit may be able to help. Reach out for a free consultation today.

Jul 03
2

5 Credit Mistakes You Need to Avoid

By | Your Credit

It doesn’t matter whether you’re trying to improve your credit or build a positive credit history from scratch, there are a few financial moves you should almost always avoid. Even one small misstep can result in lasting damage, undoing all the hard work you’ve already achieved.

Take a look at five of the most common credit mistakes and how you can prevent them from hurting your own credit report.

1. Making Late Payments

The largest factor determining your credit score is your payment history, making it extremely important to avoid paying any of your bills late. Obviously this includes any type of financing payments, like credit cards, student loans, mortgage, car loans, and any other kind of personal loan. But even things like your cell phone bill or utility payments have the potential to impact your credit report if you leave them unpaid for too long.

How much leeway do you have with your payments?

Your creditor can of course charge late payments according to your user agreement, so it’s always smart to pay by the due date. If you do happen to miss that, you have 30 days until the late payment can be reported to the credit bureaus. Once a negative item like that appears on your report, it can stay there for seven years, unless there’s been some type of credit error.

2. Reaching Your Credit Limit

Another credit mistake to avoid in order to fix credit or build it is to balance your credit utilization. How much you utilize each line of credit available to you also has a major impact on your credit health.

For instance, maxing out $5,000 on a single credit card is generally more harmful to your credit than spreading that same amount over multiple cards. The is because your finances seem more precarious if you don’t have much of an emergency buffer through your various lines of credit.

A quick credit repair tactic is to either pay down your maxed out cards or ask for a credit limit extension. If you take that route, just make sure you don’t actually use the extra room on your card.

3. Closing Accounts for the Wrong Reasons

When you have problems with accumulating credit card debt, your immediate reaction may be to shut down your accounts. But that can actually hurt you instead of helping to improve your credit. Here’s how:

First, your average account age is part of the calculation determining your credit score. When you close a credit card, the card eventually drops off your credit report and lowers the length of your credit history.

Second, when you close one line of credit, that automatically increases your overall credit utilization if you still have outstanding balances on other accounts.

Avoid this credit mistake – when is it a good idea to close an account?

If you’re paying an annual fee and not getting any kind of benefit, it might be time to say goodbye. Additionally, you may want to close a card after a credit dispute over a fraudulent account.

4. Applying for Multiple Credit Cards or Loans at Once

Every time you apply for any type of financing, you’ll see a new inquiry appear on your credit report. Some lenders or credit card companies start off the pre-approval process with a “soft check,” which doesn’t hurt your credit repair efforts. But once you fill out a formal application, they’ll usually perform a hard check.

These inquiries stay on your credit report for two years and can damage your credit for one year. Even though the drops are usually just minor, several inquiries can really start to add up. If you want to fix your credit, pay attention to how many hard pulls are being done.

5. Ignoring the Need for Credit Repair

Getting help with the credit repair process is oftentimes a good choice for many Americans. In fact, the FTC has performed lengthy studies indicating that at least 70% of the population believe they have unresolved credit disputes plaguing their reports.

At Ovation Credit, it’s easy to find out if you would benefit from professional credit repair services. See if it’s the best option for your personal situation by signing up for a free consultation on our site.

Sources:

https://www.myfico.com/credit-education/whats-in-your-credit-score/

https://www.ftc.gov/news-events/press-releases/2015/01/ftc-issues-follow-study-credit-report-accuracy

Jun 08
0
Summer Budget Travel

Summer Travel on a Budget

By | Budgeting

The air is getting warmer and the mosquitoes are coming out but you might get bitten by something else this summer: the travel bug. What should you do if you’re itching to hit the road, but can’t afford your dream vacation? Follow these tips to have an amazing summer travel on a budget you can afford.

Sign Up for Deal Alerts

First and foremost, sign up for deal alerts that let you know of huge travel savings for your ideal vacation spots. They’re also a great way to get ideas of where to go if you don’t have a specific place in mind. Look for budget-centric airlines to get cheap tickets or last-minute hotel and car rental deals. You can even get alerts specific to your destination in order to find more savings on food, attractions, and entertainment.

Use Credit Card Travel Rewards

Many credit card companies offer rewards-programs specific to traveling. Purchases made with the card earn you points, and usually accumulate faster if you have travel-related expenses. Not only that, but you can also often find deals if the card provider has a travel platform, and your points go even further when you book through the website. Search for travel credit cards with no annual fee and large signup bonuses. You could easily fund a large chunk of your summer vacation budget with those points alone.

The one catch with a travel credit card is that you usually need good credit to qualify. If you have any credit errors on your credit report or want to improve your credit score with a credit dispute, now is a good time to get started. Using a professional credit repair company can yield better, faster results to get you on the road sooner.

Travel by Bus

Skip the expensive plane tickets and get to your summer destination by booking a bus ticket. You don’t have to worry about arriving hours in advance at the airport or worry about your luggage getting lost. You won’t have to worry about paying for a cab or shuttle from the airport, because most buses usually drop you off right in the heart of the city.

To make sure you’re getting the best deal for your summer travel on a budget, you should be comparing multiple bus carries. There are plenty of reputable, large-scale companies running routes throughout the country. The best way to find the lowest fares amongst multiple bus carriers is to visit a comprehensive price comparison website like BusTickets.com. They do the work for you and you get the lowest price on your bus ticket.

Fix Your Own Meals

Once you’ve arrived at your destination, your budget can take a huge hit when it comes to dining out. Think about how much you’d spend if you ate out for all three meals, plus snacks and the occasional happy hour. Whether you’re traveling alone or with a large family, food can quickly become a budget buster. Instead, head to a local grocery store and stock up on granola bars or trail mix, so you have an easy snack on the go.

You can also prepare your own meals when you stay in a vacation rental like an Airbnb. While hotels certainly have their perks, you can save a lot by having a few meals at home throughout your stay. Plus, many Airbnb hosts include a fully stocked kitchen and you can have extra fun by shopping the city’s local farmers’ market for ingredients.

Find a New Hotel

If you do prefer staying at a hotel, try shopping for a new one. This may sound counterintuitive; after all, wouldn’t a brand new hotel be more expensive than an older one? Actually, many new places lower their prices during their launch period in order to fill rooms while still in the promotion process. So not only can you snag a great nightly rate on new construction, you can also take advantage of brand new facilities before it gains more popularity.

Explore Free Attractions

Our final summer travel on a budget tip is to explore your destination’s free or low-cost attractions. Many museums are open to the public free of charge, as are lovely parks with beautiful gardens. Most state and national parks also only charge a small fee for parking to take advantage of most amenities. You could even just stroll through an architecturally significant neighborhood on your own rather than paying for a guided tour.

No matter where you go, do a little research before you head out of town. You can easily cut your budget with some forethought and planning. After all, oftentimes we all just need a little change of scenery before we’re ready to head back home fully recharged.

Apr 27
0
unpaid credit cards

Unpaid Credit Cards – You Can Still Repair Your Credit

By | Credit Cards

Statistics show that many Americans have bad credit, and one element that is a common factor is unpaid credit cards and how they affect your credit.

According to the statistics, VantageScore says there are about 220 million scorable people and 68 million of them have bad or poor scores (lower than 601), which is how they got to that 30 percent estimate. Figures from credit bureau TransUnion also say that 30 percent have subprime credit based on the VantageScore 3.0 model.

The good news is that you can fix it, but how do you repair credit when you have unpaid credit cards that, and possibly some in collections?

The First Step

Wondering how to fix your credit or how to improve your credit score? First thing is to find out your credit score and exactly what is on your credit report. Sometimes, there are items that should have been removed yet remain long after. These items are affecting your score and ability to do things like buying a home, buying a car, getting insurance, getting security deposits on utilities or, even worse, getting certain jobs.

If you have unpaid credit cards, they are often sent to third-party collection agencies that will try to collect the debt. One of the first things they do is list it on your credit report, which hurts your overall credit score. These debt collections remain active for seven years unless you take care of the charge, dispute it, or have it erased.

Disputing a Debt Collection

It is best to dispute a debt collection as soon as possible, generally within 30 days of when you were first contacted by the agency. This time frame is important because it allows you to request that the collection agency provide proof that you owe the debt. If they ignore your request or cannot prove the debt, then it has to be taken off of your credit report. If the debt does not belong to you in the first place, it has to be removed if they cannot prove it is yours.

Seven Year Dispute

After seven years, past due accounts have to be removed according to the Fair Credit Reporting Act. Keep in mind that some agencies do what is known as re-aging the account, which keeps the debt collection on your account longer and makes it look like the debt is more recent than it really is. If seven years have passed and the debt is still remaining, you can then dispute it and any backup information you have about the age of the account is helpful. The date of the collection starts from the moment you first went delinquent.

Deletion by Payment

How to dispute a credit report when it comes to deletion by payment is fairly easy. The one thing that debt collectors want is their payment. In some cases, the debt collector may agree to delete the debt collection from the credit report if you work out a deal to pay some or all of what you owe on your unpaid credit cards.

There are a few caveats to this deal. Make sure that if you are able to work out this type of agreement, do not rely on an oral agreement over the phone. You must get the agreement in writing so that the collection agency has to abide by what they agreed to do.

Any written correspondence should be sent by certified mail with a return receipt and if the collection agency does not follow through with their promise to delete the entry, you can then dispute it with the Credit Bureau by providing proof of what you were promised. Paying off the debt in collection alone will NOT improve your credit score.

Active Credit Cards

Strategic payments and credit line increases help with what is called your utilization rate. This is the percentage of credit limit you use and agencies that score credit look at this rate to determine your credit score. A good number to be at in your utilization rate is no higher than 30 percent.

If you have credit cards that are active and not in collections, there are ways to improve your score using these methods. This is done by having a lower utilization rate, where you are spending a lower portion of credit than what you have.

If your payments are on time and you have good standing with a credit card company, one way to improve your credit is to ask for a credit line increase without using it. It won’t be helpful to raise your score if you use up the credit line increase as soon as you get it.

For strategic payments, send in early payments and make fewer purchases to see results. Keep in mind that it is best to do this with all credit card accounts, not just the one you owe the most to.

For instance, you have three credit cards – $500, $300 and one with just $100 owed – do not just choose the largest to send extra payments. Instead, if you have planned on paying $100 extra, break that into three payments that you send to each debt equally. So, if your payments are $40 a month on all three, instead of paying $140 to the first card and $40 to the other two, pay $70 to all three to see faster results.

There are plenty of ways to help repair your credit even when you have unpaid credit cards. These are a few of the best that will help you on your way to a higher score.

Sources:

http://www.foxbusiness.com/features/2016/02/15/how-many-americans-have-bad-credit.html

https://www.thebalance.com/remove-debt-collections-from-your-credit-report-960376

https://www.credit.com/credit-repair/how-to-fix-your-credit/

https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf

Oct 12
0

Improving Your Finances: Debt Settlement vs. Credit Counseling vs. Credit Repair

By | Your Credit

If you’re struggling with improving your finances, you may have seen several different services offering to help. Each type of service has a different goal, so picking one over the others could change the amount you have to pay toward your debt, and the impact on your credit score may vary by service. Which service you should choose depends on your debt, your goals and budget.

Improving Your Finances

What Are the Basics?

While the broad goal is to improve your financial situation and credit score, each service has a different primary purpose.

  • Debt settlement seeks to reduce the amount you have to pay. This could be by offering a lump sum payment for pennies on the dollar or negotiating a payment plan that won’t pay off the full debt.
  • Credit counseling works on improving your finances  by helping you develop better habits like sticking to a budget and finding ways to pay off your debt as quickly as possible. It may also help you do things such as negotiate for lower interest rates, find a personal loan and use balance transfers, but in most cases, the end goal is to pay off your debt in full.
  • Credit repair focuses primarily on your credit score and removing negative items from your credit report. Paying down your debt may be part of this, but it is only one possible tool, not the ultimate goal.

Is One Type of Service More Legitimate Than the Others?

Many providers who only offer one of the debt settlement, credit counseling or credit repair services will try to diminish the other two services, even to the point of implying that they’re a scam. The truth is that as long as you pick a reputable company, each type of service is perfectly legitimate.

Of course, because the different services have varying methods and potential outcomes, there could be one that is better for improving your finances than the others.

Does the Amount of Debt Matter?

Certain programs may set minimums or maximums for the amount of debt they’ll work with, but the rules aren’t set in stone. There are a few general guidelines to consider:

  • If you’re struggling but still able to make at least your minimum monthly payments each month, credit counseling may help you find a little breathing room without damaging your credit score.
  • If you can’t keep up with your payments but haven’t taken a big credit score hit yet, debt settlement may help minimize the damage.
  • If you’ve already gone into default, had an account charged off, or entered or considered bankruptcy, it may be time to shift your focus to credit repair.

What Happens to My Credit Score?

In terms of credit scoring, there are clear winners and losers when it comes to improving your finances.

  • Credit counseling: Because credit counseling focuses on finding ways to pay your debt in full, it will not hurt your credit score and may actually help you to build positive credit history over time. Even if you negotiate lower interest rates or transfer balances, it still counts as a paid-in-full account.
  • Debt settlement: Debt settlement will almost always lower your credit score. Since the creditor loses money on a settlement, settled accounts are marked negatively on your credit report. However, continuing to add missed payments or having an account charged off could lower your credit score even more.
  • Credit repair: In theory, credit repair can only raise your credit score, but that only tells part of the story. If you switch into credit repair mode before your accounts are paid, settled or discharged in bankruptcy, additional negative items could still be added to your credit report.

How Long Does it Take?

There are no clear-cut answer for the amount of time it will take improving your finances and each service. It varies widely based on your exact situation.

  • Credit counseling often involves either one-on-one sessions or attending classes. Depending on the timing and how quickly you’re able to follow their suggestions, you could start seeing results in days or weeks. Bigger changes, and actually paying your debt completely off, could take months or even a few years.
  • Debt settlement depends entirely on the status of your account. If you have an account in collections with a debt collector willing to settle, it may take a single phone call. If you have a high credit card balance but have managed to make your minimum payments on time, the issuer may require you to enter into a special program before they’re willing to settle. Overall, expect anywhere from a few weeks to a few months.
  • Credit repair is another process that can take anywhere from days to months. Creditors have 30 days to respond to credit bureau disputes or updated information on an open dispute. Some may fix obvious errors faster, but there is often a processing backlog that pushes them right up against the deadline. If you’re trying tactics like goodwill letters or pay-for-deletes, expect several rounds of back-and-forth letters or phone tag.

Which Should I Choose?

When you consider the above information and how willing you are to spend your limited free time, the answer may be all three. Remember, credit counseling will help with improving your finances by teaching you good spending habits, debt settlement will help with debts you can’t pay in full and credit repair will help reverse damage to your credit report. Whether you need one, two or all of these services, you are free to customize a plan that meets your needs.

Sources:

  • https://www.experian.com/blogs/ask-experian/the-difference-between-credit-counseling-and-debt-settlement-2/
  • https://www.consumerfinance.gov/ask-cfpb/whats-the-difference-between-a-credit-counselor-and-a-debt-settlement-company-en-1449/
  • https://www.consumerfinance.gov/ask-cfpb/what-is-credit-counseling-en-1451/
  • https://www.consumerfinance.gov/ask-cfpb/what-are-debt-settlementdebt-relief-services-and-should-i-use-them-en-1457/
  • https://www.consumerfinance.gov/ask-cfpb/a-credit-repair-firm-sent-me-an-offer-outlining-their-credit-repair-program-should-i-enroll-en-327/
  • http://blog.quizzle.com/2010/09/debt-consolidation-vs-credit-counseling-which-is-right-for-you/
  • http://www.bankrate.com/finance/debt/debt-management-vs-settlement.aspx
Oct 03
0

Can You Buy a House With Bad Credit?

By | Home Buying, Mortgage

Buying a house is a dream many people have, but it can seem out of reach when you have bad credit. While it’s certainly easier to qualify for a mortgage loan with a credit score of at least 620, it’s not impossible if your score is lower. You just have to prove to lenders that you’ll pay your mortgage on time every month for years, and having a good credit score is only one way to do this. If you’re hoping to become a homeowner without first having to spend years improving your score, take a look at some of your options.

Bad Credit Buy House

Bad Credit? Check Your Credit Report for Errors

Your first step is to get a copy of your credit report. You might be surprised by your score, as it could be higher or lower than you assumed. Be sure to look over the entire credit report, because you might find an error, such as a bill in collections that you actually paid. If you do find an error, report it right away to the creditor so you can get it removed from your credit report before you get a mortgage.

If your score is low and you are getting ready to look at houses, you have a chance of improving your bad credit at least a little in the next few months. Start by making every payment on time, and then pay down any credit cards that have high balances. If you have a late payment on your credit report, try contacting your creditor to see if you can get it removed, as this is a possibility if you’re a loyal customer and are not normally late.

Similarly, if you have collections on your report, ask the creditor if you can pay the amount past due in exchange for the collections being removed from your credit report. In some cases, even boosting your score by as little as 10 or 20 points can make a difference, since it might take your score from poor to fair.

Make a Big Down Payment

If your credit score still falls into the bad or poor category when you’re ready to buy a house, rest assured you can likely still get a mortgage loan. You just might have to pay more upfront. Making a big down payment can help you get a loan, because it reduces the amount of money you need to borrow. This makes it more likely that you’ll be approved.

In addition, if you put down 20 percent or more, you should be able to avoid private mortgage insurance (PMI), as you typically have to pay this monthly if you put down less than 20 percent. And of course, the more money you put down on the house now, the less you’ll end up paying in interest over time. So there are benefits to saving up a good down payment, regardless of what your credit score is.

Look for a Loan That Doesn’t Require Good Credit

Typically, mortgage loans require you to have a credit score of about 620 or more, which is why buying a house when you have a lower score can be challenging. However, it’s not impossible, in part because there are loans that don’t require a score of 620 and up. They don’t require a large down payment, either.

FHA loans are a good example of this type of loan. This loan is backed by the Federal Housing Administration, which makes lenders more willing to offer money to borrowers with bad credit, as the loan will be repaid either way. With an FHA loan, your credit score can be as low as about 580. You just have to have a down payment of 3.5 percent, which is still much lower than the typically recommended 20 percent. This is why FHA loans are usually appealing to homebuyers who have bad credit.

Show Lenders Why You Should Get a Mortgage Loan

Typically, lenders use computer systems with algorithms to determine which homebuyers are eligible for mortgage loans. This is why it’s easier to get a mortgage loan when your credit score is high. However, it’s not all about the algorithm. Many lenders are willing to overlook low credit scores if you have something else to offer as a borrower.

For example, if you have a great rental payment history, let your lender know, since this shows you’re likely to make your mortgage payments on time. And if you have a lot of money in savings, such as enough to pay your bills for about six months, show proof of this to your lender. This suggests that even if you lose your job or suffer other financial setbacks, you’ll still be able to pay your mortgage, and that’s what’s most important to lenders considering letting you borrow money for a house.

As you can see, you definitely have options when it comes to buying a house with bad credit. But if you’re not in a rush to buy right now, it’s a good idea to spend some time and effort improving your credit score. You can even contact a credit repair company for help getting started. After all, the higher your score is, the more options you’ll have when it’s time to buy a house.

Source:

https://www.nolo.com/legal-encyclopedia/five-reasons-make-large-down-payment.html

https://www.credit.com/credit-repair/credit-repair-content/dispute-credit-report-error/

https://www.hud.gov/buying/loans

May 05
0

Bankruptcy: Rebooting Your Credit Life

By | Bankruptcy

For many people, bankruptcy is a scary concept, something to be avoided at all costs. However, the truth is that legal bankruptcy can relieve you of major financial burdens and allow you to begin planning a debt-free future.

Bankruptcy-Reboot-Your-Credit

Two Types of Bankruptcy

In essence, declaring bankruptcy is a way of telling the United States court system that you can’t currently pay your debts. There are two main kinds of bankruptcy for individuals (as opposed to businesses). A Chapter 13 bankruptcy lets you negotiate with your lenders and come up with new payment plans that you can manage. In most cases, people must make all of their payments within five years.

If you don’t have much in the way of disposable income, a Chapter 7 bankruptcy may be the option for you. Unfortunately, it will require you to sell or cash in some of your assets in order to pay certain bills. On the bright side, this measure will eliminate some of your debts ― medical bills, for instance ― so you can forget about them entirely.

The Procedure

If you’ve decided to file for bankruptcy, your first task is to find a lawyer you can afford. That attorney will explain all of the details of the process. She’ll also supply you with the forms you’ll need and help you to complete them correctly.

Later, you’ll have to appear in court at a 341 hearing, which some or all of your creditors may attend. There, you’ll discuss your debts and assets. If you’re going through a Chapter 7 bankruptcy, your debtors’ official representative, who’s known as the bankruptcy trustee, will help figure out which of your possessions you’ll be required to liquidate.

As part of your bankruptcy responsibilities, you’ll need to take a class that will review methods for handling your personal finances. In addition, you should know that, under the law, your boss isn’t allowed to fire you merely because you’ve declared bankruptcy.

Next Steps

Once your bankruptcy is behind you, a good first step is to carefully prepare a budget for yourself. Make a thorough list of your monthly expenses and compare it to your monthly income. Of course, you should be spending significantly less than you’re making so you can grow your savings and build up an emergency fund. If you’re spending too much each month, do whatever you must to reduce your expenditures, increase your income or both.

For example, you might look for a job that pays more, or even get a second job. You could move to a cheaper apartment, or you could sell your home and buy one that’s smaller and more affordable. Why not give up golf, forego cable TV or start using less smartphone data? Whatever you can think of to get on solid financial footing, take that action at once.

If you obtain a secured credit card with low fees, using it in moderation should help you to raise your credit score.

Especially important, make sure that you pay every bill on time. It’s worthwhile to set up as many automatic electronic payments as you can. That way, you’ll be less likely to forget to pay a bill. Also, keep checking the bank accounts from which your automatic payments come. Obviously, you don’t want to overdraw from one of them.

When it comes to the bills you can’t automate, try using an app or an old-fashioned calendar to remind yourself of due dates. Moreover, make each of those payments several days before they’re due. You don’t want unforeseen circumstances to somehow prevent you from paying on time.

The services of an excellent credit repair company can likewise enhance your credit report. Such a firm will scrutinize your credit history, find mistakes that are hurting your score and contact the proper credit reporting agencies to get them erased.

As time goes by, keep reviewing copies of your credit reports. If you ever spot a sudden drop in your score, you could get in touch with a credit repair company to see if an error was involved.

A Tricky Decision

It probably goes without saying that bankruptcies aren’t entirely positive. This legal process will damage your credit score, and a bankruptcy notice will stay on your credit record for a full 10 years. And, even though there’s no reason to, you may experience some lingering feelings of failure or shame after you file for bankruptcy.

However, these days, lenders tend to be more lenient with those who’ve declared bankruptcy than they once were, especially people who’ve only gone bankrupt one time. Thus, you shouldn’t expect that you’ll have to pay enormous interest rates for all of your future loans. In some cases, though, you might be required to explain to potential creditors why you chose to declare bankruptcy.

In the final analysis, bankruptcy is certainly a serious and consequential action. At the same time, it can be a uniquely valuable tool for those who find themselves in difficult financial situations. Many people are able to turn their lives around as soon as they take this step.

Sources:

https://www.aol.com/article/2011/06/03/life-after-bankruptcy-5-steps-to-rebuilding-your-credit-financ/19955927/

http://blog.credit.com/2014/12/5-things-to-do-after-bankruptcy-103308/

http://www.businessnewsdaily.com/3973-bankruptcy.html

http://www.huffingtonpost.com/curtis-arnold/how-to-rebuild-your-credi_b_5790860.html

http://www.nytimes.com/2012/09/16/realestate/mortgages-life-after-bankruptcy.html

https://www.thebalance.com/how-to-repair-credit-after-bankruptcy-960380

 

Feb 14
0

Taxes and Your Credit – Are you ready?

By | Your Credit

Your taxes are due by April 17 this year. There’s a lot of preparation that goes into being ready to submit your return. From assessing your current debts to avoiding tax offsets, it’s important to know everything about how your credit plays into your taxes.

Are you ready for the 2017 tax season?

It’s right around the corner, and you’ll want to prepare yourself now!

Taxes and Your Credit

Filing Your Taxes

You need to file your taxes. It’s also important to keep good on anything you owe to the IRS, as leaving an unpaid debt can result in serious damage to your credit score. This is because the federal government will opt to place it on your credit report.

Tax liens are no laughing matter. You can see your FICO score drop by more than 100 points. It can destroy even the best of borrowers; thankfully, you can submit a removal request to get the lien off your credit report.

There’s no guarantee your credit rating will improve after the lien is taken off your report. It can still weigh on your score calculation for up to seven years. Your best bet is to plan ahead of time if you expect to owe the IRS money. It’s usually possible to set up a repayment plan and avoid the credit-damaging implications altogether.

Before You File

Go over your credit report and all your outstanding debts. Figure out if you have any debts that could be taken via tax refund garnishments. Further, make sure you don’t have any judgments against you with bank levy approval. It will put all your funds at risk of seizure and, unfortunately, creditors tend to target your tax refund deposit.

Here are five quick questions to ask yourself before filing:

  1. Do you owe the IRS anything? If so, read up on the IRS’s Payment & Installation Agreements to avoid losing a large lump sump out of your refund.
  2. Do you have other federal or state debts? If so, negotiate a repayment plan to avoid wage garnishment — check your state’s laws first.
  3. Did you default on student loan recently? If so, it can lead to a student loan tax offset, which means a smaller refund for you.
  4. Did you avoid paying any fines or tickets? If so, the result varies by state, but some cities go as far as adding it onto property tax bills.
  5. Are you planning to file for Chapter 7 bankruptcy? If so, you might want to do it now — you’ll get your 2016 tax year refund, but nothing next year.

This is just the premise of what you should consider before you do your taxes. A more complex approach will be necessary if you answered “YES” to any of these questions.

Warning: Your spouse’s financial safety can be put at risk if you owe. If no settlement is made on your debts with the IRS and you filed together, the right to garnish tax refunds and wages will apply for your partner also. Things will get even more confusing if you live in one of the common-law states, but that’s a whole different topic.

Your Tax Refund

In 2015, the IRS reported that 83 percent of American taxpayers received a tax refund. Some did not, due to making too much through the year. However, it’s fair to conclude that the typical average credit borrower did receive at least some money back.

A lump of cash is the perfect kickstart toward your credit recovery goals. If you receive anywhere near the average tax refund amount ($2,701 in 2015), it will make a huge difference.

How Does Debt Impact Your Tax Refund?

Any bad debts, such as accounts in collections, can cause you significant financial troubles. In some cases the creditors might succeed at garnishing part of your wages. A creditor can even go as far as emptying your bank account if the court approves a bank levy request.

The creditor has the right to remove up to 100 percent of the amount owing.

Before filing your taxes, make sure any debt disputes are in order. Collection agencies look at tax season as “go time” for planning and executing wage garnishments.. If you have anything in your bank account, a court-approved levy could take it all.

What You Don’t Have to Worry About …

Do you have an annoying creditor that wants you to pay off a debt now?

Are discussions about repayment plans not leading anywhere?

If so, a typical creditor needs to take you to court and get a judgment against you. This will take a while, and chances are you’ll receive your tax refund before it’s done.

The majority of tax refund garnishments occur because of back taxes, child support and other legal judgments. Wage garnishments are a bit less complicated than bank levies, but they still require court approval first.

Take Advantage of Your Tax Breaks

It’s important to educate yourself on all the ways you can reduce what you owe and increase what you get back on your taxes. Not every tax break will help you, and sometimes what seems like a fair claim won’t get approved.

Regardless, below are some tax breaks and deductions worth noting:

To see more potential tax deductions, check the IRS’s Miscellaneous Deductions for the 2016 tax year. This covers the lucrative savings that many Americans fail to notice. If you want to run through the basic deductions, read the IRS’s page on Credits & Deductions for Individuals.

A Note for Homeowners

Things get more interesting if you’re a homeowner.

You’ll need to be careful when managing Private Mortgage Insurance (PMI). It’s essential if you don’t have at least 20 percent to put down on a purchase or refinance. When you reach at least 20 percent equity in your home, it’s no longer needed.

You might be underestimating the expensiveness of PMI premiums. It doesn’t just add a cost but rather, it takes away from affording other expenses. Hundreds, if not thousands of dollars, can be wasted. Your goal should be to remove the insurance as soon as you meet the equity requirement.

You may have the right to deduct your mortgage insurance premiums. Tens of millions of Americans can, and yet very few homeowners do. The biggest requirement for claiming a PMI tax deduction is having an adjusted growth income (AGI) of less than $100,000 for the 2016 tax year.

This tax break is meant for struggling families that own homes. It’s a small savings, but everything helps. The U.S. housing market is going up, and this is freeing more equity for the average homeowner. Keep an eye on your situation, because removing the PMI premium could be possible if the market increases the equity in your home.

Credit Repair and Taxes FAQ

1. Can the IRS Garnish My Wages/Tax Refund?

The IRS, within federal guidelines, has the right to garnish your tax refunds and wages to recuperate funds owing from previous years. Most of the time you can set up a payment plan to alleviate the situation before it escalates.

2. Can Child Support Debt Impact Your Tax Refund?

The state government can garnish any remaining funds on your tax return to cover what’s owed on your child support bill. This can continue until it’s paid off; likewise, there’s a risk of wage garnishment when you deal with child support debt.

3. How Will a Student Loan Affect Your Tax Refund?

The only real risk exists if you have defaulted on a student loan debt. This gives the federal government the power to garnish funds via a tax offset. Your significant other, if you filed together, could also have funds taken from their tax return.

4. Will a Tax Lien Hurt Your Credit Score?

Yes. As mentioned earlier, you can see your score drop by more than 100 points if there’s a lien against you. The only fix for this is to request its removal once you pay what’s owed, but it will continue to impact your credit for up to seven years.

5. Are Credit Repair Services Tax Deductible?

This is one of the tax deductions that slips by most Americans. If you get credit repair assistance, there are some components that will be tax deductible. The main write-offs are for attorneys, such as when dealing with bankruptcy or identity theft.

Sources:

https://www.irs.gov/uac/tax-refund-withholdings-and-offsets

https://www.irs.gov/pub/irs-pdf/f12277.pdf

https://www.irs.gov/individuals/payment-plans-installment-agreements

https://www.garnishmentlaws.org/

https://www.irs.gov/uac/newsroom/tax-refunds-reach-almost-125-billion-mark-irs-gov-available-for-tax-help

http://www.cpapracticeadvisor.com/news/12116556/average-income-tax-refund-for-2015-increased-to-2701-irs-caught-908-million-in-fraudulent-refunds

http://www.bankrate.com/finance/debt/3-ways-to-fight-a-creditor-s-account-levy.aspx

https://www.irs.gov/uac/credit-and-debit-card-fees-related-to-tax-payment-are-deductible

https://www.irs.gov/taxtopics/tc456.html

https://www.irs.gov/taxtopics/tc456.html

https://www.irs.gov/taxtopics/tc453.html

http://www.forbes.com/sites/robertwood/2015/03/19/which-legal-fees-can-you-deduct-on-your-taxes/

https://www.irs.gov/pub/irs-pdf/p529.pdf

https://www.irs.gov/credits-deductions/individuals

https://www.irs.gov/publications/p936/ar02.html

https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Federal-Guidelines-for-Garnishment/INF14841.html

Dec 28
0

Start Living a Better Credit Life

By | Your Credit

Better Credit Life

We all struggle with the stress that money creates. Take it from Antoine Walker, a former Miami Heat star that ‘went from $108 million to bankrupt‘ in less than a decade. This serves as a reminder: it’s not how much you make, but how you use it.

If you have a stable job, it is possible to live a Better Credit Life as long as you put the time and organization into your financial planning. Ready to get started? Here are 10 ways for you to start living a Better Credit Life:

1. Plan for Disaster from Day One

If you anticipate a financial crisis, then there will never be one. So planning for the near and mid future will keep you safe in the long run. And you have no excuse; just join the millions of Americans that already use budgeting and personal finance tools. Having a budget and sticking to it, is a sure way to stay on track to a Better Credit Life.

Simply download Mint, YNAB, or another highly-rated app, and finally take charge of your financial freedom today!

2. Watch for Credit Report Errors

It’s surprising how often errors end up on credit reports. Stats suggest this impacts 1 in 20 consumers, which is five-percent of Americans. While some errors are more damaging than others to your credit score, as many as 1 in 250 consumers are behind more than 100 points from errors.

You can request a free copy of your credit file from AnnualCreditReport.com once a year from each credit bureau. Further, with our services you’ll find out if there are any errors right away – as we provide a copy of your Equifax and TransUnion files.

3. Examine All Your “Fees”

Most Americans have no idea how much goes to waste on preventable fees. It’s said that hundreds of dollars are spent every year on unknown costs. According to the Ponemon Institute, an average of $942 is spent on hidden fees each year.

Online banking has made a difference, but there are new ways to lose money without realizing in the digital age. Get digging and see where you’re losing!

4. Negotiate What You Pay

Many things are made cheaper so compare costs and cut deals where you can. As you look for high fees, this might open you to ideas like switching bank accounts and utility providers.

Don’t ever be scared to negotiate – for instance, most cable, phone and Internet providers have a user retention line. Most that inquire end up getting a moderate to large discount on their services.

Heck, even some “extreme couponing” could make a big difference!

5. Consolidate Your Large Debts

Your total amount owing is the second biggest variable of your FICO score. So it only makes sense to limit your overall debt.

FICO’s algorithm weighs revolving debt higher than installment debt. This means temporary loans set with payment installments (like a student loan) will drag your score down less.

Therefore, by obtaining a consolidation loan for your credit cards (which are revolving debts), you can eliminate the biggest credit hindrance of all.

6. Build a Relationship at a Credit Union

You stand a better chance getting a home loan with moderate credit at a credit union than a traditional bank. This is especially true if you get familiar with the staff at your local credit union. Further, you will find many rates are better, insufficient funds fees are easier to waive and other perks.

7. Don’t Become a Data Breach Victim

Your information on the web is never safe. Make sure to audit your Internet safety from time to time. The single most effective way of doing this is by checking whether your email was hacked. If your data was leaked on the web, you will be able to find out through HaveIBeenPwned.com’s search tool. Further, you can set up email alerts to inform you if a data breach occurs.

8. Plan for Christmas in January

You should look at your past year of finances and what you expect to make and spend for the following year all at once. Do this after Christmas is over and prepare your budget for the next winter holidays. If you don’t want to buy the items right away in case it’s not appealing later, stash the money in gift cards or make a savings account for this purpose.

9. Shop Online for the Best Cards and Loans

Whether you need a consolidation loan, a travel rewards card or even an auto loan, you should compare the best rates online. Sites like BankRate.com make it easy to see which cards and lenders provide what you need.

10. Honor Your Debts

Everyone wants to disavow their debts, but no one wants to go bankrupt. The key is to forget how owing money can damage your life. Since 15% of your FICO score is based on your credit length – it’s better to keep your lines open. So when you pay off a card, don’t close the account!

Even taking on a higher credit limit is good – it improves your credit utilization rate, so long as you don’t waste the new funds.

Conclusion

Never give up on the idea of living a Better Credit Life, because it’s available to you with a little discipline. Even if you need credit repair help or require consolidation loans to make it happen–as the saying goes, “Where there’s a will, there’s a way…”

Sources:

http://money.cnn.com/2015/07/24/investing/antoine-walker-nba-bankruptcy/

https://www.ftc.gov/news-events/press-releases/2013/02/ftc-study-five-percent-consumers-had-errors-their-credit-reports

http://www.forbes.com/sites/adamtanner/2014/04/14/these-sites-tell-which-of-your-accounts-have-been-hacked/

http://fraud.laws.com/false-adversiting/surcharges-and-hidden-fees

Nov 16
0

Better Credit Score Means Cheaper Car Insurance

By | Credit Scores, Insurance

Car-Insurance-Credit-Score-Ovation-Credit

There are many benefits to having a better credit score. If you’re buying a house, it will be obvious you need excellent credit first. The difference in your interest payments could run $50,000 or more if you don’t bother.

The same situation exists when you’re getting car insurance.

That’s right, even your car insurance premiums are influenced by your FICO score. So improving your credit rating can save you money every month — and not just on your debts.

Meet the Credit-Based Insurance Score

There’s a credit rating for insurers to use that’s provided by FICO. It’s a credit-based insurance score, and most car and home insurance companies use it.

Home insurance rates can go up quite a bit if your score drops and a claim is made. This is because the risk of a fraudulent claim is higher if you’re struggling to afford the payments.

Car insurance companies are also known for jacking up premiums after claims are made. This is why many choose to pay off the cost of repairing the other person’s vehicle after a minor accident.

In reality, a poor credit score can result in a huge increase in your premiums. One incident can cost you $5,000 to $10,000 or more in the course of a year. The difference is an additional $400 to $800 out of your pocket every month to stay on the road.

How Does the FICO Auto Insurance Score Work?

Here’s how FICO calculates your auto insurance score:

  • Payment history (40 percent),
  • Outstanding debt (30 percent),
  • Credit history length (15 percent),
  • Pursuit of new credit (10 percent) and
  • Credit mix (5 percent).

This is only a little different than the traditional FICO score breakdown. You see 5 percent more importance on your payment history in the credit-based insurance score. This difference comes from a reduced emphasis on your credit diversity.

Remember: The Laws Vary by State

Not all states allow car insurance providers to use credit-based FICO scores. You can find your state’s department website and see how things stand where you live.

If you’re lucky, your state is one of the few that doesn’t allow insurers to use your credit score. This will prevent your bad borrower status from potentially costing you a lot of money due to your premiums going up. In one example on ConsumerReports.com, you can see more than $1,300 added to your monthly cost.

This instance is based on a single moving violation by a lone driver in Kansas. You can only imagine how much it would cost if you ran into multiple issues. You might even fail to qualify for insurance through certain strict insurers. It’s possible you’ll end up having to pay for a year upfront too.

The Problem With Credit Scores and Insurance

You might find your monthly costs getting higher all the time. A single moving violation could mean the difference in being able to pay your debts. This means you might be digging yourself further into debt even though the matter is out of your control.

All you can do is prepare for the worst. If your insurance premiums go up, you want the infraction to have minimal financial impact.

You can expect your premium to rise $100 or more per month from a single moving violation. Still, this is better than paying an extra $1,000 each month to stay on the road.

You can improve your credit rating and save money on car insurance. Since this is a cost factor, you can renegotiate on your monthly premiums when your FICO score is high. If the insurer refuses to negotiate — another insurance company may be eager to give you a better rate.

Does Your Insurance Affect Your Credit?

One saving grace is that this is a one-way relationship. Your FICO score impacts your car insurance costs, but your insurance won’t impact your credit score.

Since it’s not an inverse relationship, failing to pay your car insurance on time (or at all) will not hurt your credit. You won’t see a reduction in your FICO score — even if you end up in a financial disagreement with your insurer.

How to Save With a Better Credit Score

You can actually reduce your monthly payment amount by renegotiating your insurance terms. Wait until your FICO score goes up quite a bit before you do this. That way, you’ll be able to command a much better rate.

If you’ve had any increases to your auto insurance premiums, this might get reversed. Your decreased risk as a result of your better borrowing status could balance out the damage. Therefore, your monthly insurance costs could go down.

Conclusion

You want to better your credit rating and have access to quality financing opportunities. Whether you plan to start a small business or buy your dream home — your credit rating can make or break your dream.

With poor credit, not only will you get rejected for credit cards and loans more often, but your debts will cost you more. Even your car insurance — a recurring monthly expense — can go up as a result of poor credit.

In closing, it is clear that a strong FICO score comes with many rewards.

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