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The True Cost of Rewards Points

 

Have you heard these words spoken before? “I use my credit card instead of my debit card because my credit card accumulates reward points. I pay it off every month so what’s the difference?” It SEEMS like a pretty good plan doesn’t it? Turns out there may be a price to pay for those tempting rewards points.

 

Not only do credit cards cost money to have; annual fees, interest rate charges etc. but they also may ding your overall credit score. Of course you say; that’s the nature of the beast! Fair. But you may not be fully aware of the creature with which you tangle.

 

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Does the American Dream come to those with bad credit?

 

I was asked today if people with bad credit just rent for the rest of their life....

I had to sit back and think for a second because, I knew 10 Praxis Credit Consulting graduates that started our program with scores of 490’s and filed Bankruptcy who just closed on houses in May 2013 alone! So YEAH the American dream of owning a home is ALIVE AND WELL for those with bad credit!

These were all your friends and family members that everyone seems to know right now – one was living with their in-laws in Mesa, another with his brother in Phoenix. You see the stories on the news all the time.

All of these folks just followed the simple road map that we laid out for them to get to their goals of owning a home.
I have to say when – they told me they couldn’t of done it alone it makes me feel pretty good that we are really helping people.

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Credit Score Of 800 Not Impossible

 

By now, most consumers with even a minimal history of Credit are aware that something known as a credit score has a tremendous amount of influence on his or her financial lives. The score, a distillation of one’s Credit History reduced to a three-digit number between 350 and 850, represents to the world the overall credit worthiness of the individual that it represents.

A score towards the lower end of the scale means that you are a poor risk for a Credit Card or a loan, while a score at the upper end means that you can get the best rates on just about any Type of lending. Despite what you may think, it is possible to obtain a score in the 800 range. All it takes is time and some discipline.

Here are some tips that will help you achieve a top credit score:

# Don’t have too many credit cards. It’s possible to have too few, and it’s possible to have too many. Too few cards means not enough credit, and too many means that you can potentially get into too much debt. Four or so is probably just about right.

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Overdue Library Books Can Hurt Your Credit Score

As municipal governments increase efforts to collect unpaid parking tickets, dog-catcher fines, library fines and the like, some consumers are seeing a surprising impact—a radical drop in their Credit scores.

To each individual Consumer, the fines in question may be very small and Collection actions may seem petty and unnecessary. For many cities, however, these unpaid fines and fees add up to millions of dollars a year. Those dollars can be collected with little investment by the cities if they’re turned over to private collection agencies.

Private agencies typically charge a percentage of the balance actually collected, so there’s no risk to the government. The risk to consumers who don’t make those payments in a timely manner, however, is significant. That’s because collection agencies report delinquencies to the three major credit reporting agencies. A single collection item can drop your credit score as much as 100 points. Many consumers don’t know that charges like this can affect their credit.

While not all municipalities use private collection firms, the trend is increasing across the country. As government collection activity rises, so does the number of consumers surprised to discover that they’re paying higher interest rates—or being turned down altogether—because the kids lost a library book or they neglected to renew Rover’s license.

If such charges are already appearing on your credit report, you may be able to negotiate their removal in exchange for payment. Getting items removed from your credit report can be a long and stressful process, though, and there’s no guarantee that you’ll be successful. The best defense is to be aware of the risks and make sure you pay those parking tickets on time.

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So I Married Bad Credit

Marriage is not only the bringing together of two individuals in love who vow to spend the rest of their lives together, it is also a marrying of two credit histories for better or for worse. Asking the betrothed for complete disclosure of credit histories sounds about as romantic as a prenuptial agreement but may be just as important in some cases. In the interest of full disclosure it is well worth it to be aware of the two credit reports which will soon become one.

Having a serious conversation about credit history even going as far as swapping credit reports before the vows are read may be a make or break deal in the engagement. Like it or not, the three credit bureaus track every facet of an individuals credit history, this includes any joint accounts as well as accounts where one may only be an authorized signer. Whether the accounts are within your ability to pay the bills on time are of no consequence to creditors or the credit rating agencies and whether these items are positive or negative factors on your credit report likewise makes no difference.

If upon finding out that the lovely bride or dashing groom to whom you are engaged has horrifically bad credit, there are ways to protect your own credit the best you can ahead of time. The best way to go about this is to keep all accounts separate until the betrothed is able to restore positive credit, this includes adding one another as an authorized signer. Additionally, there are states within the U.S. considered Community Property States that consider accounts and property acquired prior to marriage sole property of the respective bride or groom throughout the marriage.

It is better to at the very least be aware of the bad credit you may be marrying ahead of time. Financial disagreements are the leading cause of divorce these days and while it may seem that love will conquer all now, it won’t qualify the two of you for that new home to begin your growing family.

 

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Something Different About Credit Card Debt

There is a major crisis with people falling into large Credit Card debt. Rather than going through the numbers, the statistics and ratios, to help you get a realistic view of your debt situation, this will give you a different perspective.

On any article site, e-zine, printed newspaper or magazine, there are literary millions of write-ups about the condition of our national debt problem. We see TV reports and talkshows about this ever-growing problem. There are millions of tips about everything from debt consolidation, refinancing, and personal debt relief to the all important Credit SCORE.

Now, here is a new and different mode of thinking. If you have credit card debt so extensive, that other financial problems have occurred in your life, why does the credit score really matter at this point? It’s really a low priority in the large scheme of more important life changes you need to start looking at making. If you already own a house, have a job and are to the point where you can’t make ends meet, that credit score will not help you now. So trying to repair it right away or keep it from getting worse is the least of your worries. If you are renting, now is the time to chalk your credit card debt up as a major life learning experience and start to change your attitude about the debt, to pave a healthy road towards future financial goals as well.

It boils down to this, and reading every technicality about how to get out of debt, what will happen if you do A or B, will not solve the physical, mental and emotional turmoil that got you into debt in the first place. This is a task that will require a whole lot more dedication than reading every Source of information on the internet. There are not a lot of articles that deeply cover the changes you will have to make and the majority of them make it all sound so easy. It’s not easy to break free from using credit cards unwisely when it’s a bad habit. It didn’t start out this way, but slowly it got out of hand, because after the bills started piling up and a few unexpected life emegencies happened, you became stuck. Stuck in vicious cycle and this is now the most important part of breaking that credit card habit. Some of the consequences are inevitable and can only be helped as time goes on, with your first decision to stop the cycle. Yes, it’s important to get help or advice if you have been subject to debt Collection agencies. Find out what your rights are by gaining wisdom from those who have experienced it.

People who are in debt are not happy with tendencies towards depression, stress and anxiety. They may start to incur physical health problems as a result. In turn medical care, especially with no insurance plan, causes more bills with added worry and stress. How will it all get paid? This is living a life, where falling apart financially has snowballed into physical, mental and emotional anguish. These three components are the core of your debt problem. There is definitely not enough focus on this aspect of it. Making a plan in your everyday to life start from there can and does actually help.

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Buying A Car? Check Your Credit Score First

Thinking of buying a car?  Check your credit scores first.. 

Do you check your Credit score and credit report before you go shopping for a car? You might find out that it is well worth your while to do so, as some auto dealers are taking advantage of the fact that many consumers do not know their credit scores.

No one likes buying a car; the entire process is awkward and cumbersome. Most items we buy are plainly marked with the price, but with cars, the price is often a mystery. Then you have to haggle with a salesman and hope that you have worked out the best price possible. Having done that, you have to arrange financing. You can often get an acceptable interest rate when financing through the dealer, but some dealers are padding their bottom line by offering loans at higher rates than they otherwise might.

The scam works like this – You negotiate your best price with the dealer and you agree to finance through them. You fill out the credit application and hand it over to the salesman, who has promised you some reasonable Terms. He takes off to process the application and to check your credit report while you have a cup of coffee. He returns a few minutes later, shaking his head. He informs you that your credit score is only 600 and that you will not qualify for the interest rate he offered you. He says that you will have to pay a higher rate. And not knowing any better, you agree.

Had you done your homework by checking your credit score ahead of time, you would have known your actual credit score and you could have pointed out that the salesman’s assessment of your credit score was incorrect. At that point, you could insist upon receiving the more favorable interest rate or threaten to finance elsewhere. This is a common scam that works because most people really do not know their exact credit score.

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5 Most Common Ways to Hurt your Credit Score

 

Whether a consumer has an abysmal credit score or a fantastic one, the reduction of overall credit availability over the past few years has raised the standards across the board for credit score requirements. What was once considered a great score now doesn’t seem too great as lenders are requiring even stronger credit histories and in most cases a greater minimum score up about 20-40 points. Not only have minimum scores risen but also the method in which the Equifax, TransUnion, and Experian formulate their FICO scores has changed and continues to change.

 

 

There are five ways consumers consistently kill their scores, a few of them most people are unaware are making such a significant impact on their scores.

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Proposed Legislation to Reduce Impact of Medical Debt on Credit Reports

Medical debt in most cases is unavoidable. In a lot of cases so are huge knocks against otherwise spotless credit histories.  Dealing with the convoluted mess of juggling health insurance companies, doctors’ office billing departments, and hospitals it is easy to lose track of a bill or forget to make a payment. New legislation is now in the works to have collections, which originated as medical debt, to fall under its own category on credit reports to be scored differently than non-medical collections.

 

This new bill dubbed the Medical Debt Responsibility Act is currently under consideration in the House of Representatives and could potentially help trustworthy borrowers qualify for a home loan by lowering the impact of medical collections on their credit reports. Currently the bill is co-sponsored by Representative Donald Manzullo (R-Illinois.) Representative Heath Shuler (D-North Carolina), and Representative Ralph M. Hall (R-Texas).

 

The Medical Debt Responsibility Act calls for the three major credit bureaus (Experian, Equifax & TransUnion) to change the way medical debt affects a credit score. Currently the three bureaus report any and all medical collection information for the maximum allowed duration as with any other collection information; seven years, whether it remains unpaid or not. The Medical Debt Responsibility Act would require that all medical collection debt under $2,500 be omitted from credit records within 45 days of being paid or settled upon.

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