Month: May 2019

10 Things That Can Hurt Your Credit Score

Your credit score is an important factor in determining what types of loans and interest rates you qualify for. When it comes to big ticket purchases like a home or car, lenders will examine your score to determine your creditworthiness. Depending on your score, your interest rate can vary by as much as 1 or 2%. In order to make sure that your credit score is as high as possible, here are ten things that can damage your score and should be avoided.

1.  Paying Late:  Payment history is the single largest factor that determines your credit score. Making late payments is a sure fire way to negatively impact your score and should be avoided at all costs.

2. High Credit Card Balances: Second to payment history, a high balance is one of fastest ways to damage your score. High balances indicate a high credit utilization rate and makes you appear high risk to creditors.

3. Maxing out a Credit Card: Maxing out a credit card results in a credit utilization of 100% and as such significantly lowers your credit score.

4. Having An Account Charged Off: When creditors think you are now longer able to meet your obligations as a creditor, they will often write off your account. This usually occurs after several periods of missed payments and is one of the worst things you can do in terms of damaging your score.

5. Defaulting on a Loan:  Whether it is an automobile or home loan, defaulting on either can have severe consequences for your credit.

6. Filing for Bankruptcy: Few actions will sink a credit score faster than a bankruptcy. In order to protect your score, it is a good idea to pursue alternatives such as consumer credit counseling.

7. Having Your Home Foreclosed: When a bank forecloses on your home, your credit score goes with it. In addition, you will have trouble getting approved for mortgage loans in the future.

8. Getting a Judgment: With a judgment, your creditors can see that you not only were unable to pay your bills, the law had to get involved. While a judgment will hurt your score, an unpaid judgment will hurt it even more.

9. Closing Old Credit Cards: A large percentage of your credit score is based on credit history. With that in mind, it is a bad idea to close old cards as it does away with your history and makes you appear a higher credit risk than you may actually be.

10. Applying for Several Credit Cards or Loan: While unused credit can be a good one, applying for a large amount of credit cards or loans increases the number of times your credit is checked and results in a lowering of your score.

Although most people understand the importance of a good score, many do not understand what actions can damage their score and take actions to avoid them. Armed with these ten damaging actions, you are in a great position to take … Read More

How to Avoid Bankruptcy

Bankruptcy happens when a person or a business is unable to repay their existing debts. The process starts once the debtor or creditor filed a petition. In other times, bankruptcy allows a person or a business to start fresh. The company will offer creditors a chance to obtain a measure of repayment options based on what type of resources are available.

With that said, here are the five common tips to stay away from bankruptcy:

1) Sell your Assets- Once you notice you’re behind on your payments, take immediate action. Sell any item you have at home (books, old cds, bags, computer etc.) and use your earnings to pay off your debts. These days, there are several ways to sell stuffs: You can direct sell it and you can sell it online (Amazon, eBay, etc.)

2) Find Ways to Increase Income- Your hobbies and skills can absolutely help you earn some extra money to stop bankruptcy. If you can, you can choose to work overtime or apply for part-time jobs. Try browsing the web and apply for any virtual assistant tasks (link building, content writing, computer programming, etc.).

3) Ask for Help- Don’t be afraid to speak what’s inside your mind. Kindly inform your creditors about your current situation. These creditors are also human beings and they understand. But at the end of the day, you need to give your willingness on how you can pay your debts. If possible, ask them if they can ease your burden of lowering your interest rates and monthly fees.

4) Borrow Money- To me, borrowing money from family and friends is absolutely a bad idea. They have a life of their own and they also have their own way of escaping financial crisis. But in the real life, there’s always an exception to every rule. Before borrowing money, take a hard look at what you can contribute. Create a plan on how and when you can repay them. After doing all that, it’s time for you to talk with friends and family. If you talk with the right people, they can help you for sure. If your family and friends can help you, hire a lawyer.

5) Settle- Debt settlement is one of those things that must be avoided under any normal circumstances. Anyone who’s in the brink of bankruptcy is not normal. If you need to choose between settling a number of debts and filing bankruptcy, you must go with settling the debts but never rely on Debt Settlement Company. Too much time and extra money are wasted if you choose to deal with these companies. You also don’t settle any current debt instead focus your attention to those that have been charged off or sent to collection. Lastly, pay as soon as the agreement is made.… Read More