Guest Post by Lacey Cook
Hello all. My name is Lacey Cook, and this is my personal credit card debt story. I was always taught to spend my money wisely. From the age of eight, I started to save for my first car. By the time I turned 18, I had saved enough to buy a six year old car at about $8,000. I paid in full with a check, and I’d never felt so great.
After that, I went off to college, where I had some trouble keeping my finances afloat, but I made it through with the help of my parents. After graduation, I got married and started a new chapter of my life. That’s where everything started to go south. I had no student loans or credit card debt, and we’d just got a few thousand dollars for our wedding, but that wasn’t enough. He was about $40,000 in debt from student loans and credit cards, and we had no way of paying our bills. We struggled to find jobs, and we ended up having to use my credit cards to make ends meet for the first few months of our marriage.
Finally, we found jobs and started to slowly dig our way out of the hole. Everything was great, but we still wanted something more, so we decided to get a dog. We went to the pound to adopt one, and found the most adorable little puppy I’d ever seen. She was fun, yet still wanted to cuddle, and I knew she would be the perfect addition to our new little family. We spent our weekly budget for groceries on her and decided to eat bologna and mac and cheese to tide us over.
The second day after we got her, she started to look lethargic, and I wanted to make sure she wasn’t sick so I took her to the vet. Turns out, she had a very draining virus that could have killed her if we hadn’t caught it in time, and even with the treatment, she still only had about a 50% chance of survival. I handed over my credit card. Two days and nearly $2,000 later, we finally got to take her back home to nurse her back to health.
We knew, at that point, that we had to make some drastic changes in our spending to get us back out of debt. We sat down, made a list of all of our monthly expenses, and created a budget to suit our life. I started clipping coupons and stopped buying name brand items to cut down our grocery bill. We discontinued our cable bill as well and used digital rabbit ears instead. We cut down our budget so much that we were able to start paying way more than the minimum payment on our debts each month, which I know is important when you are trying to save your credit score.
We’re not out of the woods yet, but we’re getting there as fast as we can. In fact, we’ve been so successful, that we’re also able to put away a little money each month to start a retirement fund. I know you may be thinking that we shouldn’t have to worry about such things yet because we’re young and have plenty of time, but I have realized that I definitely don’t want to have to work until I’m too old to stand. The sooner a person starts to save for retirement, the sooner they can actually retire. I am determined and motivated to get out of this debt and live my life to the fullest.
Author Bio:
Lacey Cook is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about getting their first credit card.
Saturday
Friday
3 Steps to Building a Superhuman Credit Score
Guest Post by Jacelyn Thomas
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
Credit Card Debt vs. Student Loan Debt: Which Should take Precedence?
Guest Post by Mariana Ashley
With Labor Day now done and long over with, all colleges have officially commenced. That said, there are many students who will be completing their final semester/year of college. While many are looking forward to earning their diploma, many are dreading what happens shortly after graduation—repaying student loans. But the situation may seem a lot worse for graduates who have to face a double whammy: student loan and credit card debt. If you find yourself in this situation, which debt should you try to take care of first and why? To find out, continue reading below.
What Kind of Debt Gets Higher Priority?
To state it rather directly, you should always aim to clear your credit card debt before your student loan debt. This is because since your credit card is considered revolving debt as opposed to installment debt, it will impact your credit score more ferociously and more quickly than a student loan debt. That's not to say that your student loans should be disregarded. But if you have some sort of student loan grace period—which is typically around 6 months or so after graduation—you should put all of your energy to wiping out your credit card debt first before making payments to your loan. It's understandable why you may want to pay off your student loan first during the grace period, after all you typically do not acquire any interest during this time. But ultimately credit card debt will do more damage. If you find an extremely high-paying salary job and can afford to pay off both credit card and student loans simultaneously then by all means do it. But if your resources are limited, go with the credit card debt first. If your student loan grace period expires and you still have a hefty credit card balance, talk with a student loan officer immediately to figure out a way to make the smallest monthly payments possible. Sometimes doing something as simple as consolidating all of your loans can result in a small monthly payment, some as low as $50. Whatever you do, you never want your loan to get defaulted though.
Debt Collection Rights
If for some reason you cannot make timely payments on either your credit card debt or student loan debt, you can be reported to a credit card debt collection agency or the Department of Education debt collection agency respectively. By law, debt collectors (of either department) can't threaten to repossess your home, car, or anything else valuable over the phone to compensate for your debt. But they can drag you to court and sue you. Here, if a judge finds you at fault then the judge can mandate that certain items be repossessed, garnish your wages, or collect your tax refund checks to pay off your debt if you don't the money to pay it off for example. Note that credit card and student loan debt collections work a little differently however. With credit card debt, each state has a statue of limitations—which simply means there is only an allotted time for which a debt collector can hit you with a law suit. For example, in Texas it's 4 years. A debt collector can still take you to court even after the statue of limitations is up—it's up to you to show proof that the allotted time has expired if you are taken to court. While you may get out of making the court forcing you to pay up, know that your credit report will be ruined for a good chunk of your life. Good credit is needed to make most big purchases that you will make as an adult, including a home and car. A student loan debt collector does not have any restrictions however and can sue you at any time.
Author Bio:
Mariana Ashley is a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.
With Labor Day now done and long over with, all colleges have officially commenced. That said, there are many students who will be completing their final semester/year of college. While many are looking forward to earning their diploma, many are dreading what happens shortly after graduation—repaying student loans. But the situation may seem a lot worse for graduates who have to face a double whammy: student loan and credit card debt. If you find yourself in this situation, which debt should you try to take care of first and why? To find out, continue reading below.
What Kind of Debt Gets Higher Priority?
To state it rather directly, you should always aim to clear your credit card debt before your student loan debt. This is because since your credit card is considered revolving debt as opposed to installment debt, it will impact your credit score more ferociously and more quickly than a student loan debt. That's not to say that your student loans should be disregarded. But if you have some sort of student loan grace period—which is typically around 6 months or so after graduation—you should put all of your energy to wiping out your credit card debt first before making payments to your loan. It's understandable why you may want to pay off your student loan first during the grace period, after all you typically do not acquire any interest during this time. But ultimately credit card debt will do more damage. If you find an extremely high-paying salary job and can afford to pay off both credit card and student loans simultaneously then by all means do it. But if your resources are limited, go with the credit card debt first. If your student loan grace period expires and you still have a hefty credit card balance, talk with a student loan officer immediately to figure out a way to make the smallest monthly payments possible. Sometimes doing something as simple as consolidating all of your loans can result in a small monthly payment, some as low as $50. Whatever you do, you never want your loan to get defaulted though.
Debt Collection Rights
If for some reason you cannot make timely payments on either your credit card debt or student loan debt, you can be reported to a credit card debt collection agency or the Department of Education debt collection agency respectively. By law, debt collectors (of either department) can't threaten to repossess your home, car, or anything else valuable over the phone to compensate for your debt. But they can drag you to court and sue you. Here, if a judge finds you at fault then the judge can mandate that certain items be repossessed, garnish your wages, or collect your tax refund checks to pay off your debt if you don't the money to pay it off for example. Note that credit card and student loan debt collections work a little differently however. With credit card debt, each state has a statue of limitations—which simply means there is only an allotted time for which a debt collector can hit you with a law suit. For example, in Texas it's 4 years. A debt collector can still take you to court even after the statue of limitations is up—it's up to you to show proof that the allotted time has expired if you are taken to court. While you may get out of making the court forcing you to pay up, know that your credit report will be ruined for a good chunk of your life. Good credit is needed to make most big purchases that you will make as an adult, including a home and car. A student loan debt collector does not have any restrictions however and can sue you at any time.
Author Bio:
Mariana Ashley is a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.
Thursday
Finding Options to Help Fight Off Debt
Guest Post by Stella Walker
Getting into debt is scary. There is no denying that. You start to get this anxious feeling of being trapped; you have too many bills not paid off to think clearly. You know you have to do something, but you feel like you don't have a lot of options.
In actuality, there are a lot of options out there, and I'm not just talking about bankruptcy (although this is still viable in extreme cases). Half the battle is getting yourself out of this emotional and psychological slump and convincing yourself that you can be proactive about your debt and finances.
Cut off luxuries
If you can't pay your own bills, it's time to start making your own coffee and lunch and bringing it to work. You should also at least attempt to repair household items yourself. If there's no cancellation fee, cancel your gym membership and instead opt for good-old-fashioned jogging. While you're at it, cancel any other services that you don't need; if the service doesn't facilitate you getting out of debt, you don't need it.
Start a small business
While it is true that it generally does take some money to startup a small business, some business start-ups are actually extremely low cost. One extremely cheap startup is a snow cone stand. Have any secret hobbies or skills? Now is the time to put yourself out there and at least give it a shot. You'd also be surprised how cheap it is to start up an online business. You could even write a blog telling the story of your struggles with debt (like this one).
Balance Liquidation Plans
If you have a whole slew of credit cards with outstanding balances and frighteningly high interest rates, you should perhaps consider requesting balance liquidations plans from your creditors. While this doesn't allow you to charge to cards that you've liquidated, it does lower the interest rates to extreme degrees. Just be sure that you have ways to make necessary expenses without your cards.
Pay Cash
If you do wind up liquidating your cards, this is a great way to try budgeting with cash. The beauty of a cash budget is that it forces you not to overspend because you literally can't. You take out the amount of money you want to budget each week (or month) in cash, and if you find yourself getting low on cash, you just have to start scraping pennies and looking for food in the freezer until the set time that you allow yourself to take out more cash.
Use Envelopes
If you decide to limit your budget with cash withdrawal restraints, another great strategy is to organize separate budgets into different envelopes. For example, you'll have envelops for bills, clothes, groceries, etc. with a designated amount for each envelope. The idea here is that you limit a budget for each area of your life, and if one envelope empties to quickly, you have identified a possible spending problem in your household.
Author Bio:
Stella Walker is a freelance writer of free credit score where she writes about topics including credit, debt, investment, bankruptcy.
Getting into debt is scary. There is no denying that. You start to get this anxious feeling of being trapped; you have too many bills not paid off to think clearly. You know you have to do something, but you feel like you don't have a lot of options.
In actuality, there are a lot of options out there, and I'm not just talking about bankruptcy (although this is still viable in extreme cases). Half the battle is getting yourself out of this emotional and psychological slump and convincing yourself that you can be proactive about your debt and finances.
Cut off luxuries
If you can't pay your own bills, it's time to start making your own coffee and lunch and bringing it to work. You should also at least attempt to repair household items yourself. If there's no cancellation fee, cancel your gym membership and instead opt for good-old-fashioned jogging. While you're at it, cancel any other services that you don't need; if the service doesn't facilitate you getting out of debt, you don't need it.
Start a small business
While it is true that it generally does take some money to startup a small business, some business start-ups are actually extremely low cost. One extremely cheap startup is a snow cone stand. Have any secret hobbies or skills? Now is the time to put yourself out there and at least give it a shot. You'd also be surprised how cheap it is to start up an online business. You could even write a blog telling the story of your struggles with debt (like this one).
Balance Liquidation Plans
If you have a whole slew of credit cards with outstanding balances and frighteningly high interest rates, you should perhaps consider requesting balance liquidations plans from your creditors. While this doesn't allow you to charge to cards that you've liquidated, it does lower the interest rates to extreme degrees. Just be sure that you have ways to make necessary expenses without your cards.
Pay Cash
If you do wind up liquidating your cards, this is a great way to try budgeting with cash. The beauty of a cash budget is that it forces you not to overspend because you literally can't. You take out the amount of money you want to budget each week (or month) in cash, and if you find yourself getting low on cash, you just have to start scraping pennies and looking for food in the freezer until the set time that you allow yourself to take out more cash.
Use Envelopes
If you decide to limit your budget with cash withdrawal restraints, another great strategy is to organize separate budgets into different envelopes. For example, you'll have envelops for bills, clothes, groceries, etc. with a designated amount for each envelope. The idea here is that you limit a budget for each area of your life, and if one envelope empties to quickly, you have identified a possible spending problem in your household.
Author Bio:
Stella Walker is a freelance writer of free credit score where she writes about topics including credit, debt, investment, bankruptcy.
Friday
Fighting Debt Incurred Through Identity Theft
Guest Post by Nadia Jones
There's no getting around how much identity theft sucks. It's deceptive, hard to spot, and it is also hindering the spread of technology. As more information is used and stored online, the threat of identity theft increases exponentially as criminals can access more ways to steal your private information.
According to the Federal Trade Commission (FTC), nine million Americans have their identities stolen each year, resulting in $631 off out-of-pocket expenses for victims due to legal fees and misappropriation of their false debt. It can take years before someone realizes they are the victim of identity theft, resulting in months or even years of the victim's time being spent towards repairing their credit worthiness and adjusting their falsely accrued debt. Remember, you are not liable for fraudulent debt resulting from identity theft. Do not pay for a criminal's debt.
Preventing and Detecting Identity Theft
Before explaining how to get rid of your fraudulent debt without having to pay the debt yourself, I think it is extremely important to detail how to prevent identity theft. Since there are so many ways identity thieves can acquire your information, protecting yourself involves a combination of a lot of little things:
Also, review your credit report annually. You area allowed a free copy of your credit report every twelve months. All you have to do is request it. To order a free annual report, go to AnnualCreditReport.com or call toll-free to 877-322-8228. Otherwise, you can consult a consumer reporting company (like Equifax, Experian, or TransUnion) which will charge about $10 for a copy of your report.
Stopping Identity Theft and Fraudulent Debt
Once you realize you are the victim of identity theft, you have to defend your reputation and credit rating by immediately filing a "Fraud Alert" on your credit reports and then reviewing your reports carefully. This will alert creditors to raise security measures before opening any more new accounts or making changes to your existing ones. Filing a fraud alert will also get you a free copy of your credit report, so you can look for accounts that you didn't open and debts on accounts that you can't explain. The consumer reporting companies all have toll-free numbers that you can call to place a fraud alert, and you only need to call one:
Author Bio:
Nadia Jones blogs at online school about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com.
There's no getting around how much identity theft sucks. It's deceptive, hard to spot, and it is also hindering the spread of technology. As more information is used and stored online, the threat of identity theft increases exponentially as criminals can access more ways to steal your private information.
According to the Federal Trade Commission (FTC), nine million Americans have their identities stolen each year, resulting in $631 off out-of-pocket expenses for victims due to legal fees and misappropriation of their false debt. It can take years before someone realizes they are the victim of identity theft, resulting in months or even years of the victim's time being spent towards repairing their credit worthiness and adjusting their falsely accrued debt. Remember, you are not liable for fraudulent debt resulting from identity theft. Do not pay for a criminal's debt.
Preventing and Detecting Identity Theft
Before explaining how to get rid of your fraudulent debt without having to pay the debt yourself, I think it is extremely important to detail how to prevent identity theft. Since there are so many ways identity thieves can acquire your information, protecting yourself involves a combination of a lot of little things:
- Shred financial documents
- Sign the backs of credit cards immediately
- Don't carry your Social Security number or card with you
- Don't offer personal information to anyone you don't know or trust
- Be cautious of links in unsolicited emails
- Use a variety of secure passwords
- Keep your personal information locked and secure
- Report theft or loss of key identification material (passport, license, etc.)
Also, review your credit report annually. You area allowed a free copy of your credit report every twelve months. All you have to do is request it. To order a free annual report, go to AnnualCreditReport.com or call toll-free to 877-322-8228. Otherwise, you can consult a consumer reporting company (like Equifax, Experian, or TransUnion) which will charge about $10 for a copy of your report.
Stopping Identity Theft and Fraudulent Debt
Once you realize you are the victim of identity theft, you have to defend your reputation and credit rating by immediately filing a "Fraud Alert" on your credit reports and then reviewing your reports carefully. This will alert creditors to raise security measures before opening any more new accounts or making changes to your existing ones. Filing a fraud alert will also get you a free copy of your credit report, so you can look for accounts that you didn't open and debts on accounts that you can't explain. The consumer reporting companies all have toll-free numbers that you can call to place a fraud alert, and you only need to call one:
- Experian: 1-888-EXPERIAN (397-3742)
- TransUnion: 1-800-680-7289
- Equifax: 1-800-525-6285
- Request for consumer reporting companies to block fraudulent information.
- Contact the security and fraud departments of companies where an account was opened or charged without your knowledge.
- Send them copies of supporting documents, including the identity theft affidavit.
- Ask for verification that the account has been resolved and fraudulent debts discharged.
- File a police report
- Report fraud to the FTC
Author Bio:
Nadia Jones blogs at online school about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com.
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