When your credit is in the basement, those TV and e-mail ads that promise to make your troubles go away can be pretty tempting.
But the truth is, if you really do have a bad credit history, they cannot make it go away. And the ones who make those big promises are the ones you should avoid like a flu bug. These are the companies that propose to use illegal means to clear your report. And instead of helping you, they could land you in legal hot water – all while taking their heft fee, of course.
Some credit repair companies are on the up and up, but they can only do so much, and the things they can do are all things you could do on your own.
All they can do is correct errors and oversights.
For instance, if there is information on your credit report that is false, they can help you file dispute letters. This could be an account that you’ve paid in full but it is still showing as unpaid. It could be an account that has gotten on your credit report via a data entry error. It could be a data entry error that shows you owing 10 times your true balance.
If you have negative information that is old, but has not been removed from your report, a credit repair company can help you prove that the time limits have passed and get the credit bureau to remove the negative information.
If you’ve had a bankruptcy that should have removed charged-off accounts from your credit report, they can help you get that done.
The Credit Repair Organizations Act has set forth regulations for these companies, and so that you will be aware of those regulations, they are required to give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you do business with them.
One of those rules is that they may not charge you any fees until they have completed services performed under a written contract with you. And, since you may have made the decision under stress, they are not allowed to perform any services until 3 days after the contract is signed. This gives you time to cancel without payment.
Your contract must set forth exactly what they will do for you, plus the total cost and payment terms. The contract must also include a time frame, and any guarantees must be in writing. In addition, they must reveal their company name, business address, and phone number. If all they have is an Internet address – stay away from them.
You have always used credit cards with a lot of discretion and responsibility. You never made expensive purchases with credit cards and paid back your dues in time. But one day you just choked when you found out that you have exhausted the credit limit. There were all kind of items in your credit card statement but you brought none of them. Why did this happen? Well, to put it simply, you were a victim of credit card fraud. This can lead to serious monetary loss and compel you to look for credit card debt attorneys.
The pretty looking plastic cards are quite convenient to use and are much preferred over cash. Moreover, the youngsters actually believe that the use of credit cards is a trendy thing. Indeed, credit cards are quite an innovation and have changed our lives permanently but it has also introduced a new genre of crime. Credit card fraud via identity theft is a crime that is soaring at an alarming rate. Unscrupulous people would draw money as well as use goods and services by using your account, in this kind of fraud. Does that mean you won’t make transactions using credit cards? No way. You just need to play smart and know some tricks in order to combat the cons. Here are some tips which would help you to counter credit card fraud:
Things to do when you receive a new credit card:
- Make sure that the seal is not tampered.
- Do not forget to add your signature on the reverse side of your card.
Protect your CVV (card verification value) number:
To protect you from credit card fraud, you are provided a CVV number by the credit card company. This is a three digit number printed on the back side of your card. If anyone gets to know this number then he can make online purchases (where the physical presence of the card is not required) using this number. To keep this number a secret, you should make sure that transaction processes are completed in your presence. If you need to provide a photocopy of your credit card to someone then leave out the side with the CVV number.
Things to remember while making transactions online:
- Before the transaction check whether the connection is encrypted or not. This means, the URL of the concerned webpage should read like https://www.xyz.com instead of http://www.xyz.com/. The https:// stands for a secure connection where hacking is not possible.
- Be sure that the website is completely safe. You can visit siteadvisor.com or mywot.com to check the reputation of the site. Do not give your credit card details to sites you don’t know well.
- Phishing emails are all over the place these days. They would pose as legitimate businesses and ask for sensitive information like credit card details. Mark them as Spam and do not reply to any email which you do not recognize.
- Beware of clone sites. These sites resemble legitimate and trustworthy sites and deliberately deceive people. Upon visiting, they would tempt you to shop with your credit card and subsequently steal your money.
Monitor your account activity regularly to detect suspicious activity. You can use mobile alerts, offered by almost all financial institutions, for this purpose. It is cheap as well as useful.
Take caution before disposing your expired credit card or any document that mentions your credit card number. It is best to shred documents before you throw them into the trash can. Remember that if someone has enough sensitive information about you then he can also apply for a credit card in your name and start purchasing things.
You need to be a prudent and responsible person to keep the frauds away from your money. So remember what you have read to protect yourself. Good luck.
The most common issue among the consumers are making late payments and getting dunning notice from the creditors. There are several reasons for being financially strapped like losing of job, over expenses or emergency financial issues related to family.
Due to the high interest rate on the credit card that varies between 10%-30% APR, the repayment plan becomes more expensive. And prolong payment of the minimum balance along with the mounting APR charges on the outstanding balance would make it overwhelming.
What are the possible ways to get out of credit card debt?
1. Avoid paying minimum balance:
If you pay off the outstanding amount each month then it would be easier to get out of debt. Paying only the monthly minimum balance would prolong the repayment plan. And the accruing interest rate on the outstanding amount would make it unfordable for your pocket. The credit card companies lure the consumers with a bait of minimum balance payment. These companies trap the consumer into the maze of debts therefore go for a credit card debt settlement program in order to come out of debt.
2) Design a budget to avoid debt:
Preparing a budget helps to curb your reckless expenses as that would help you to avoid debt. Unless you pay off your existing debts it would not be possible to design a budget. In order to avoid the debt trap prefer changing your mode of expenditure. You need to redesign your budget plan if your expenses exceed your income. On failing to take proper measures might place you again in a severe debt problem.
3) Take up loan against 401(k) plan:
You take loan against any investment plan in order to pay off the debt. The interest rate on these loans is 1-2 points higher than the average rate. But when interest rate of the other loan is compared with the card interest rate the former appeared to be cheaper. But there is a negative aspect to it in case you plan to change your job. This debt takes 5 years to pay off but switching jobs gets the debt transferred into due. On failing to pay of the amount would be treated as taxable due that would be charged with penalty fee. If you are planning to change your work place then pay off the loaned amount immediately.
4. Hire a financial advisor:
Hiring a financial advisor would help to give you a quick relief from the mounting debts. This advisor helps to negotiate with the creditors on your behalf. He often restructures your budget plan according to your current financial situation. The financial advisor leads you towards a debt free life while giving a new meaning to it.
5. Try to settle with the creditor:
On giving a valid reason and explanation would help you negotiate with the creditor. You can settle the owed balance along with the interest rate that would make the repayment plan reasonable. If your creditor doesn’t agree with the settlement amount then threaten him of declaring bankruptcy. He would fail to retrieve the amount if you file bankruptcy therefore he might agree with the terms of negotiation.
These are the simple ways to get out of debt with ease and that would help you to achieve financial liberation.
This article has been written by Angela Sanders. She is associated with Oak View Law Group, a trustworthy debt settlement firm.