If you’ve incurred huge amounts of credit card debts, you can either consolidate them through credit card consolidation to improve your credit score, or you can also contact a credit repair company that will help you repair your credit score by following certain points. The question that bothers most people with poor credit score is whether or not it is fair enough to repair your credit on your own. Here are some steps that will guide you throughout the credit repair process and ensure an improved score.

1. Order a credit report: You’re entitled to get a free copy of your credit report from any of the three credit reporting agencies. Avail this opportunity and make sure that you order a free credit report in order to understand where you stand financially. While you may already have an idea of the negative impacts on your credit report, you may also get to know some updates about your score. Check your score to analyze any kind of errors and dispute of you find them. This is the first step that you can take while seeking credit repair help.

2. Tackle your past due accounts: You must be aware of the fact that your payment history comprises of an important part of your score. How many past payments are due is an important factor that influences your score. It is your financial responsibility to tackle all you past due accounts so that they do not have a negative impact on your credit score. Gather funds from anywhere possible and concentrate towards paying off your past due accounts and clear them off. Falling behind on such payments tarnishes your credit score.

3. Get a new credit card: You might be surprised to read this point, but you might be unaware that getting a new credit card can often improve your credit score. As your creditors already know that you cannot handle your finances properly through your credits core, it’s high time that you prove them wrong by getting a new credit card and trying your best to remain current on it. If only you’re sure about your repayment abilities, get yourself a card, because re-defaulting on your new credit card can be dangerous for your financial life.

Therefore, if you’re up to your eyeballs in credit card debt, first go for credit card consolidation to improve your credits core. Also make sure that you opt for do-it-yourself credit repair in order to nullify all the errors in your credit report and make it immaculate. You can boost your options for obtaining new lines of credit by repairing your credit score.

How to buy house in 2010 – common sense do-not-do things
For starters, we want to notice in our home buying guide a few rather simple things that somehow people insist on doing.

1. Do not move back with your parents, in-laws or other relatives after you sell your existing home and want to take some time to find exactly what you want. In 2010, you will find plenty of more than affordable places to rent and many rentals are available on monthly basis without long term commitment. Living with your relatives or those of your spouse rarely contributes to a healthy relations after you move out. Unless you absolutely have to.

2. Don’t expect making large and quick profit even when buying short sale or foreclosed house. I see foreclosures bought for $350,000 in formerly $700,000 neighborhoods and put on the market in $500,000 range. Only to be sold for lower $400,000. Still not bad but beware of all associated costs involved.

3. Don’t be afraid to miss the bottom, I don’t think there is any in sight. Do not read too much into S&P/Case-Shiller home price report which is being touted as sure thing by many from recovery-coming-soon gurus. I mentioned professor Shiller chart when he and his chart were very unpopular among realtors, builders and speedy recovery well wishers. The very same crowd now claims that the report promises a bottom in home prices in 2010, but not before additional declines. Well, take it for what it’s worth, which ain’t much in my opinion.

4. Don’t be afraid to miss the lowest rates ever, they are here to stay for a while. Obviously, mortgage rates will fluctuate a bit but even an increase by a half percentage point will be the deal breaker for many. We wrote about interest rates not going anywhere in a foreseeable future in Getting mortgage in 2010 – how to get the best mortgage, and the Federal Reserve did state it just few days ago.

5. Don’t buy a house just because you are afraid to miss government incentives, since there is talk about discontinuing the home buyers tax credit for new and existent homeowners. If you rush in, it is likely to end up costing you more than all the incentives out there.

How to buy house in 2010 – do not involve friends in home buying process
Yes, times are tough and you just want to throw a bone to a realtor friend whose business is 75% down from a year before, or your wife best girlfriend has just started at the local bank and needs something to show to her new bosses. When buying a house in 2010 or 2011 or any other year, having friends or relatives as your realtors or mortgage brokers is often but not always a rather bad idea, and also a dilemma or two. You are not sure how good they are but if you ask them will they be offended? Then again, do you want them to make money of you? But so what, someone else will? If you feel they are qualified you can get them, but weren’t Steve and Mary quite unhappy with them?

If you have them do the work and deal goes bad because bank doesn’t give you a loan or the realtor sells you a house that will have some issues later one as all homes, even the most perfect ones do, then things may get ugly between you and friends or relatives. The other question is commissions, with many realtors giving kickbacks that are quite legal in many states, how much should you ask for or how much they should offer, or should either of you mention it to begin with? And what if another realtor offers a much better kickback?

And how much your mortgage broker should offer you to pay for closing costs? The bottom line is, I have seen many cases where friend or relative based purchase works fine and as many when it doesn’t. Finally, when husband and wife each has his and her set of realtor and mortgage broker friends, it further gives ground for needless and potentially harmful issues to arise, like my Jennifer would get us much better deal, than your Pete, you dummy.

The most important point is to find a professional who knows the area, knows how to negotiate, makes proper market analysis, etc. Too many realtors are simply accidental amatures, bored housewives, part timers and glorified salesmen who managed to get a license and have access to multiple listing network. Same goes about mortgage brokers and home inspectors. Home inspectors do not have to licensed in many states. And people often think they know everything, but if you have an uncle who is excellent plumber or electrician, he can simply miss more than few small but important things that experienced home inspector won’t.

How to buy house in 2010 – choosing a realtor
That is the most important aspect and not every home buying guide puts enough emphasis here. Real estate agent is at the bottom or the top of the food chain. He or she is the one who recommends you a good loan officer, home inspector and lawyer. But most importantly, the knowledgeable and honest real estate agent who intimately knows the area you are interested in, will help you find exactly what you want, hopefully.

Of course, our home buying guide has few things to watch out for,
1. Don’t relay too much on referrals of family and friends but judge for themselves. People change and someone who was good for your sister 5 years ago, may not be as good for you.

2. Don’t get the top producer in the area. Those are mostly interested in getting listings to sell, and you will be stuck with one of his or her juniors who will try to push every house they show you.

3. Don’t buy into “we are not Florida, Arizona or California … our housing market is strong” type of the sale pitch, your state may be next if not already.

4. Curb appeal is one of the most ridiculous inventions in selling real estate. Just ask your realtor to explain you what precisely curb appeal is. If he/she tells you this is how much a given house appeals to would be buyers and that is why you must write a contract right now or tomorrow at the latest, just let it go because believe me, will be many others, even more curb appealing.

5. Don’t believe the hype that there is nothing on the market in your price range any more and likely nothing is coming, since the prices will go up, so you have to grab this house. You don’t and others will be coming indeed.

6. Be sceptical of a midnight call when your realtor wants you to jump the gun and sign the contract. Only for you guys since you are so nice … or I did it for your brother in law so believe me …

7. If someone calls your realtor with an offer or even an attempt to talk about the very house he is just trying to convince you to buy, chances are he is trying to break your hesitation by creating some nonexistent party that supposedly is after this very house.

How to buy house in 2010 – getting mortgage
You must understand that times have changed, so if your loan officer asks something in 11th hour, don’t ask why, shut up and get it. He or she wants the deal done three weeks ago, get the commissions and move as aggressively on to the next deal, so believe me, they are not asking you to furnish additional papers just because they want to aggravate you.

You must also be prepared to few delays or even setbacks that can happen as late a the day or two before the closing. Even with everything perfectly fine, on the very closing you may encounter problems, so don’t freak out. Get you lawyer to get all the extensions needed if something comes up before the closing. Normally everything gets resolved one way or the other.

After all, I am not going to touch mortgage details, down payment and credit history. We will get to those later, for now just remember 3 things,
First, there is no housing market bottom in sight so do not rush.
Second, nothing as uncommon as common sense so if you possess any don’t be shocked that people look funny at you when you occasionally display it.
Third, if something looks too good to be true, it is very likely is.

How to settle credit card debt – where to start

To negotiate a successful credit card settlement for less than you owe, you obviously have to somehow force lenders start negotiating and make them want to settle with you. Depending on your situation, you should choose one or the other – stop making credit card payments to demonstrate your inability to pay or to softly ask them for some sort of debt relief without actually stopping payments but firmly implying that you will if no agreeable settlement is coming. Interesting that for vast number of borrowers it is easier to simply jump the gun and stop paying, than to make that first phone call and politely ask before stopping.

If you are seriously struggling and/or could care less about your credit history and scores for quite sometime in a future, then you should probably stop paying and then try to settle for a lot less than you owe. If however, you still want to have some resemblance of the good credit after you are done and have money to pay some of your debt, it is prudent to call, state your hardship a offer a credit card settlement. You can always stop your payments later if being nice does not produce a desired outcome, and start more serious debt negotiation.

Know what to negotiate

Often, if only few certain things like late or over-the-limit fees, balance transfer fees, sky-high interest rates go away, you may just make it. Some issuers and banks will be more willing to negotiate those unpleasant items than others. Ask your credit card issuer if that is something they would do. Again American Express may be easier on late fees while Bank of America and Chase may lower your interest by one or two percentage points.

If your annual interest rate is higher than 12%, request a lower rate. Do it while you are still making payments on time. When you negotiating such a credit card settlement, always ask to lower your current rate by 5% or 6%. You may settle for 2% or 3% cut in the end. Always be ready to back up your request by a not so veiled threat of looming delinquency if bank does not want to negotiate or its counteroffer is not good enough. Yet be reasonable.

Settling credit card debt – dealing with threats

At some point, you will likely be threatened to be referred to a collection agency and even by a lawsuit, wage garnishment and all those nasty things that every US consumer has been having nightmares lately. You need to be calm and steady, and politely let your creditor know that frankly, if this is how they want to negotiate credit card settlement when you are seriously trying to do it in good faith, then you simply do not care. Tell them that Chapter 7 Bankruptcy is always an option and besides, filing a lawsuit against you is not worth their time and money.

Negotiate credit card settlement – making an offer

When making an initial debt settlement offer, you can be as unreasonable as you want. Again, if you have not missed a payment or missed just one or two and by no more than 30 days, you can try to set up an affordable payment plan. But if you miss several monthly payments and already have 60- or 90-day Lates on your credit report, offer them as little as 5 cents on a dollar. Basically set a ceiling you do not want to go over and stick to it. Chances are your credit card lender will accept it, eventually.

Should you offer to pay a lump sum settlement of, let say, 25% to 40% of the outstanding debt balance? I would rather have settle for some monthly payment plan and here are two reasons why. By offering to pay a lump sum, even substantially smaller than you owe, indicates that you have money. Depending on how much your offer is, the creditor may be tempted to go after your savings. If you offer a monthly payment plan, the danger of such a knee jerk reaction becomes much less. The second reason is quite simple, you may need your cash for something else.

Negotiate credit card settlement – a few odds and ends

Once you settle credit card debt on your own and for less than you owe, hopefully for a lot less, get everything in writing. When negotiating, do not rush into agreement if your credit history already is a mess. If you qualify, the Chapter 7 Bankruptcy is still there, and while your are procrastinating, your credit cars debt gets older and harder to collect, and the creditors have more reasons to simply charge it off.

Before sending your lump payment by certified mail with return receipt, request a conditional debt satisfaction letter, stating that the entire credit card debt will be wiped out clean when the creditor gets whatever the sum you settle for. Such a letter will bullet prove any subsequent problems that may arise if you creditor decides to sell the remaining balance to a collection agency or a few. And know your state statutes, for both debt and judgment.

The first thing you will want to do which has proven to be a valuable credit repair tip is that you find out exactly just what is on your report. You can either pay for your credit report or seek out places that will run a credit report on you for free. Today, there are many people who steal vital information from others in order to purchase things illegally. You may not be aware of this until your credit report is viewed by you or someone else. If you do have things on your credit report, make sure you contact the creditor as soon as possible in order to find out what is needed by you in order to remove the negative rating on your report. It may be something as simple as a letter in writing stating that you never purchased anything from them before.

If you are a person who has just gone through a recent divorce or separation, there might also be things listed on your report that your spouse has purchased and it does not reflect you. If this is the case, because you were married, you may need to follow up with your divorce decree to see if it mentions anything related to debts incurred while you were married. Again, it is just a matter of contacting the creditor to find out the information needed in order to remove it. Many people fail to heed this credit repair tip and will just leave the item on their report not realizing that the negative listing decreases your score.

If you have not been through a divorce, have no items listed on your report that are not your purchases, but have items on your report that have been paid off, another credit repair tip is to contact the creditor and let them know that you are disputing the claim. With the right information in hand as proof that the purchases was cleared, you can take advantage of this credit repair tip by having the item removed. Most companies will be glad to do so at no extra charge.

Article by Candy Wilson

For those that don’t have the time to write letters personally, please see our credit repair reviews page for additional information on credit repair lawyers and services.

Sample Credit Repair Letters:

• Sample Credit Dispute Letter
• Sample Pay for Delete Letter
• Sample Debt Validation Letter

Payday loan settlement – know your lenders
Plan your escape carefully. It does not really matter if you have a dozen payday loans or just a couple. Once you decide you have had enough, it is high time to act. Take a piece of paper and write down all payday loans you have, breaking them down by two categories – Internet or brick and mortar stores, with the amount borrowed and the total amount paid to each lender, including interest, fees and what have you. It is very essential because they are regulated differently, and how you settle your debt depends on which category your payday loans fall and your state laws.

How to settle payday loan – check your state licensing laws
One of the key steps for a successful payday loan settlement is to see if the state law requires Internet payday loan companies to be licensed in your state or it accepts other state licensing. Almost every state requires payday loan lenders to be licensed in the state, regardless of where they located. There are two sites to check, Internet payday loan state laws and Payday loan consumer information.
Since the large majority of Internet payday lenders are not licensed anywhere in the country, but simply maintain a P.O. Box somewhere in the easy going state of Delaware, you will have a huge opening to settle the debt. As a matter of fact, if an Internet payday loan shop does not have required licenses, you can simply tell them to get lost and do not pay a dime. Quite a settlement for you, but it is not too nice since you did take their money on the first place, so at least pay them back the principal.

Payday loan settlement – check the maximums
Smart crooks do not fight the law, they bend it just so. The greedy ones do break the rules, hoping that dumb, uninformed borrower, and that would be you, has no clue. So they lend you as much as they could and charge you as high as they can get away with. Still, there are laws even crooks must abide by. If they violate even one, you have another opening for a settlement. Verify the laws in your state regarding whether rollovers are permitted, and the maximum allowable interest, fees and loan amount. That goes for both, duly licensed Internet lenders and your neighborhood brick and mortar stores.

Payday loan debt settlement with CFSA members
Many of your delightful friends are hopefully the proud members of the Community Financial Services Association of America, which, according to its website, is solely dedicated to promoting responsible regulation of the payday loan industry and your protection. The CFSA is further committed to working with policymakers and consumer advocates to ensure your financial safety and overall well being. It is so touching I am crying already. Sarcasm aside, those payday loan lenders that belong to CFSA, and those almost universally will be the neighborhood brick and mortar shops, are required under the membership rules to set up payment plans for the borrowers in distress. But to get any type of debt settlement with a CFSA member, you must file the request to settle before you default on your debt. And since such payday loan lenders are perfectly legal, law-abiding business entities, be prepared to repay your loan with interest and fees. Otherwise, you can be sued for the whole amount plus attorney fees and court costs. Thus, you better play nice and they are likely to settle or rather rearrange your payday loans in a way you can eventually escape them.

Escape payday loans – closing bank account
Close the checking account where you pay is deposited before the next pay date. Ask your payroll department for a regular check until you sort things out and can safely open a new account. Certainly, do not announce your intentions to close the account to your Internet payday loan lenders, but do it very quietly and quickly, otherwise they will go after your account immediately. After that, send Letter to revoke ACH debit authorization to each and every one of the lenders involved. Also revoke any wage assignment agreement you may have signed and give a copy to your payroll department.

It is imperative to check with your bank to make sure it will not force open your account if an ACH withdrawal comes through after you close it. After that you can settle your payday loan debt on your terms. And of course, never give the new bank account or credit card information to any payday loan lender. Once your settlement is reached, pay only by money order, wire or prepaid debit card. And of course, no post dated checks.

When trying to repair credit scores quickly, think of the 5 main components which influence credit scores in the following proportions -

Payment history: late payments, bankruptcies, collections, judgments – 35%
Debt utilization: the ratio of revolving balances to total revolving credit – 30%
Credit history length: how long the accounts have been open – 15%
Type of credit: credit cards vs. installment loans – 10%
Hard inquiries: applications for new credit – 10%

These proportions, however, may change depending on the type of loan the consumer is looking for.  If you must repair credit score quickly, understand that Equifax, TransUnion and Experian use at least three different scoring models for three different types of credit – mortgages, auto loans, and consumer credit, because these different types of loans carry different default risks.

The credit score models differ in what they are intended to predict, the statistical methods used to determine credit-worthiness scoring, and what data are used and how they are weighted.  That being said, one needs to take a different approach to repair credit scores each and every time.

Equifax uses Beacon 5.0 for home mortgages, but Pinnacle model for auto loans. TransUnion uses FICO Classic 04 and Empirica Auto 95, while Experian uses Isaac/Fair Model II and Advanced Risk Model respectively.

So between two models used by the same credit reporting agency, the credit score can differ by 50-60 points and sometimes more, resulting in quite different rates for a home mortgage or a car loan.  Since cars depreciate very quickly, and homes tend to hold their value or appreciate, the current debt weighs much more for the auto loans.

When aiming to repair credit score, concentrate on the factors that influence the model you will need the most.  More on how to credit repair tips.

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