Get Wise about your Credit

Here are the 4 steps I always recommend for credit success:

2010-07-27T09:03:00.000-07:00

1. Start by getting your current credit picture.

2. Educate yourself about credit and credit scores.

3. Work with a Credit Specialist to set a plan that focuses on fixing your specific credit problems.

4. Keep tabs on your credit so you know if your plan is working.

Step 1 – get your current credit snapshot. If you were beginning a diet you wouldn't guess at your weight right? It's the same with credit; it's important to know your starting point. If you already have your credit scores mark this step as complete – you're a quarter of the way through this credit plan already!

Step 2 – get smart. Unless you are a dietitian, you probably wouldn't create a diet that you knew would guarantee success. So, unless you are a credit expert, don't go about trying to improve your credit blindly. Start by understanding the basic do's and don'ts of credit. www.getwisecc.com has a wealth of Credit Education that can help you become knowledgeable about managing your credit.

Step 3 – build your plan. Work with a knowledgeable certified credit specialist, and then you can really attack your credit problems. Your length of credit and payment history is two of the most important factors of your score. So, you may want to avoid opening a lot of new credit accounts, and you really need to focus on keeping current with all of your bills. Understanding how to deal with each credit problem starts with education and continues with a well conceived plan.

Step 4 – check your status. You'd be surprised to know how many people only check on their credit when making a major purchase. If there's a problem, finding out just before a purchase doesn't leave much time to fix the problem. You'd likely step on the scale every couple of days to see if your diet is working, right? Do the same with your credit, especially if you've created an improvement plan. We recommend checking your credit twice a year and at least 6 months before making a major purchase.

Certified Credit Specialist (877) 565-WISE www.getwisecc.com

Will closing a credit card account help my credit score?

2010-05-11T14:54:00.000-07:00

No. I would never recommend closing a credit card for the sole purpose of raising your score.

This may sound a bit counter-intuitive; after all, cleaning up your credit profile by getting rid of old or unused credit cards sounds like a good idea – and it may be from an overall credit management perspective. If you are tempted to charge more than you should just because you have more availability to credit, then getting rid of that temptation by closing some credit cards might be your best course of action.

However, your credit score takes into consideration something called a "credit utilization ratio". This ratio basically looks at your total used credit in relation to your total available credit; the higher this ratio is, the more it can negatively affect your FICO score. So, by closing an old or unused card, you are essentially wiping away some of your available credit and there by increasing your credit utilization ratio.

It's a bit tricky, so here's an example:

Say you have 3 credit cards. Credit card 1 has a $500 balance and a $2000 credit limit. Credit card 2 is an unused card with a zero balance and a $3000 limit. Credit card 3 has a $1,500 balance and a $1,500 limit. In this scenario your credit utilization ratio looks like this:

Total balances = $2,000 ($500 + $1,500)
Total available credit = $6,500 ($2,000 + $3,000 + $1,500)
Credit utilization ratio = 30% (2,000 divided by 6,500)

Now, if you decide to close credit card 2 because it's an old card that you never use, your credit utilization ratio looks like this:

Total balances = $2,000 ($500 + $1,500)
Total available credit = $3,500 ($2,000 + $1,500)
Credit utilization ratio = 57% (2,000 divided by 3,500)

You can see that your utilization ratio rose from 30% to 57% by closing the unused credit card.

Should I Do Debt Negotiation Myself?

2009-02-09T18:35:00.000-08:00

Credit card companies are all different. While they each have entire departments set up to deal with late payment accounts, credit card negotiation, and collections, they each have different standards and procedures that dictate how they deal with “troubled” credit card accounts.

Detailed debt negotiation” how to” information is hard to come by. Yes, you can legally try to do credit card negotiation on your own, however, expect a long road with a lot of detailed (and probably frustrating) work. Remember, you are one small account to them and they deal with millions of accounts daily. It will take a lot of time and effort to get your case in front of the people who decide how to handle delinquent accounts.

The primary advantage of using a professional debt negotiation company is that they know the ins and outs of all the creditor’s negotiation procedures.They know what to say and when to say it to your creditors. On top of that they also often know the people within the credit card companies whom they need to speak with about your account (the decision makers) which can make for a much smoother process.

Those decision makers will be much more likely to speak with a reputable debt negotiation company because that company typically represents hundreds or thousands of clients whose collective debt can total many millions of dollars. Therefore the creditors are much more likely to take their phone calls and negotiate with them than they are with you.

Surely that does not mean you cannot try to do credit card negotiation yourself but be prepared for the time and effort involved.

What Are the Rules of a Successful Settlement for Debt?

2009-02-09T18:27:00.000-08:00

When you hire a debt company to conduct a settlement for debt that you cannot repay, remember one key point - that you are HIRING them to do the work for you. You use their services because they are the professionals and will know the best way for you to use settlement to successfully get out of debt as soon as possible.

You Need to LISTEN to them for successful debt settlements
Just like you listen to your tax preparer or your doctor, listen to your debt Specialist. What will they tell you to do? Stick with their plan. Most likely, they will provide you with 2 rules for a successful debt settlement:

1. Do not talk to your creditorsyou hired the debt settlement company to do your talking for you so let them do it? Remember, the settlement is a legal procedure and so your silence is the best way to avoid saying something that could make the process much more complicated (and sticky). They know what to say and when to say it to your creditors. Furthermore, a good settlement company has the established relationships with all the major creditors making the process as smooth as possible.

2. Be prepared to cut back expenses in order to save as much money as possibleThe faster you can save, the quicker your company can get you out of debt and initiate the settlement for your debt with your creditors, it’s as simple as that. While they can eliminate up to 50-60% of your debt, they cannot wipe it out without the money you save under their program. Your short term savings will relieve your long term debt problem.

Contact us for a Debt Settlement Specialist 800-896-2261

The Credit Card Industry Could Face Changes

2009-02-05T15:49:00.000-08:00

There has been a recent move to force credit card companies to review and rewrite some of their more controversial practices. Right now, consumers are complaining that they are at the mercy of the industry’s whims. Interest rates change frequently and, sometimes, without any good reason. The companies argue that their own circumstances – with rates of default and delinquency the highest they’ve been in years – make such practices necessary. But customers and their advocates aren’t buying it. The credit card industry takes in billions of dollars each year, critics say, and can afford to treat their customers better.
Some of the practices under review include: universal default, too-short customer notice of changes to terms and conditions, and the retroactive application of new interest rates to a customer’s entire existing balance.
Universal default occurs when a customer’s credit score is lowered and their credit card company raises their interest rate as a result. There are many problems with this practice. For one, it’s too easy to implement. If a customer makes a late car payment, their credit card interest rate could suffer as a result. And higher interest rates make credit card payments higher, increasing the likelihood that the customer will default with many lenders instead of just the original one.
Credit card companies are also being asked to give more notice to customers when their rates are about to change. Right now, companies are only required to give a fourteen day notice by mail. Customers argue that, by the time they receive the mailed notices – if they receive them at all – they only have a few days to decide how to deal with the changes. If the new bill is passed, that notice period will be increased to nearly a month. Companies will also be required to send out bills 25 days in advance of their due dates, compared to the two-week cycle now in place.
The new bill could also change the way card companies handle punitive interest rates. Some companies will take the higher rate and retroactively apply it to the full amount of the customer’s balance. Customers feel that this is unfair; if they have been paying in a timely manner for years, why should they have high interest applied even to the debt that has been meticulously paid month after month? Companies are being asked to apply such rates only to the portion of the balance that caused the increase.
Credit card companies aren’t happy with the proposed changes. They are facing difficult times, they say, and rules and regulations forcing them to change their practices will only hurt their ability to offer credit to a large number of customers. They maintain that the credit card industry is competitive already, and that customers have no need of legislation to protect them from creditors.
Whichever stance you take, it’s possible that the credit card industry will be making a major overhaul in their business practices. In addition to the bill proposed last month by the House Financial Services Committee, the House Judiciary Committee wants merchants to be able to negotiate the amount they have to pay for credit card transaction fees. Despite card companies’ protests, change is on the horizon.

Understanding Frozen Credit

2009-02-05T15:28:00.000-08:00

Credit freezes are often confused with fraud alerts, but they are really nothing similar. A fraud alert is when new creditors are alerted that you may have been the victim of fraud, and the creditor is required to take additional verification steps that prove they should be accessing your credit and opening an account for you before they can issue the credit. Fraud alerts also remove you from receiving prescreened offers for insurance and credit. A credit freeze is something a consumer can place on his or her own credit report – depending on where in the country you live. Some states allow anyone to put a freeze on their credit; while others only allow the victims of identity theft to freeze their credit. Here are other tips that will help you understand the basics of a credit freeze:

Even if your credit is frozen, your report can be updated by your existing creditors. Don't think that by placing a freeze on your credit report you can slide by with a few late payments that won't get reported!

A frozen credit will only prevent new creditors from accessing the information in your report. If you’re existing creditors want to check your credit report to see how you are paying your other creditors, they can.

A freeze of your credit is made with individual credit bureaus. If you freeze your credit with Experian it won't be automatically frozen through TransUnion or Equifax. You have to freeze each manually if you want all access to be frozen.
“Thawing” a credit freeze; in other words, removing the hold you have on your credit report, takes several days to take effect (unless you live in Utah where they're able to unthaw in 15 minutes!) If you plan to apply for new credit or apply to rent an apartment or apply for a new job; you will want to thaw your credit a few days before you'll need it to be sure that these authorized people will have access to the report.
Freezing your credit does not prevent you from using your credit cards. It's not like “freezing” the credit card or “freezing” a bank account. It literally only effects the ability of a new lender to look at your credit report.

While the intent of a credit freeze is usually to prevent identity theft and fraud- there are still numerous ways around it that could result in you becoming the victim of identity theft or fraud, despite having a freeze on your credit. For example, in the event a lender doesn't try to check your credit before issuing a new account, new credit could be opened in your name if the criminal had the right details to do so.

Hopefully, this list has given you some useful insight into what a credit freeze is, and what it is not. Using a credit freeze may help reduce your potential for being the victim of identity theft, but if you are hoping to end the prescreened credit card offers or have creditors alerted to possible fraud activity when they begin to open a new account for you; chances are you are looking for a fraud alert service and not a credit freeze.

Business Credit vs. Personal Credit

2009-01-18T17:30:00.000-08:00

You may already know about personal credit and how you score is generated. But when it comes to business credit, the rules are very different.

There are no laws giving you a right to know about them.
Nobody tells you about the hidden compliance "checks"
Damage to your business credit profile is almost impossible to reverse.

Many business owners make a mistake by personal guaranteeing loans and credit lines for their businesses. When they do this, they put their personal credit at risk...which can be disastrous if something unexpected should happen to their business. That's why its critically important that when you build your business, you do it separate from your personal credit. Business credit can be yours to use to build or expand your business.

The problem though, is that lenders don't want you to know this. They would rather that you risk your personal credit with these business credit lines. You see, it's to their advantage to get you personally at risk for these lines. They like having more leverage over you and can even wreak more havoc on your personal finances, if they have access to your personal credit. That's just another reason why you NEED to know about how to keep your personal credit completely separate from your business credit.

Get Business Credit

2009-01-18T17:22:00.000-08:00

Seems that big banks like Citi and Chase starting to close old personal accounts. There are even multiple reports of people with balances on their Citi cards receiving a letter saying that the account is closed and all they can do is pay it off or pay interest on any remaining balance.

Imagine if this happens to you? What will you do if you no longer have access to a credit card, or even worse, you have no credit left?The easy answer is, you will have business credit. Once you establish your business credit file you can start to open large credit accounts with Visa and Mastercard. All without the need to worry about what is going on with your personal finances. From homes that have lost 20% in value, to increasing costs for everything from food to necessities, this latest assault on personal credit lines might just be the last straw that sends you into bankruptcy. I can show you how to create business lines of credit if your a business owner.

(800) 896-2261

In Too Deep? How to Protect Yourself from Unethical Debt Collectors

2009-01-04T14:49:00.001-08:00

It seems like every sector is having problems these days, from the factory workers to the CEOs and even the national government. Business is plummeting while unemployment soars. But there’s one industry that’s weathering the recession just fine: debt collection. If you’ve gotten behind on your credit card payments and started screening your phone calls, there’s hope for you yet.
First, realize that you’re not alone. Debt collection is booming precisely because so many people have gotten behind on their payments. We’re not a culture who likes to talk about our financial difficulties with others, but chances are good that you’re not the only person at the party who cringes every time the phone rings.
While some collectors are helpful, others participate in unethical or illegal practices. The BBB and FTC received 10,000 complaints about bill collectors last year, and this figure is expected to rise as firm hurry to employ new collectors to keep up with demand. So what can you do to protect yourself from these pesky, frequently abrasive, and sometimes downright criminal collection agents? Your best bet is to know your rights, know the law, and know where you can go to report abusive debt collectors.
Did the bill collector contact you to verify that the debt is actually owed by you? Under law, they have five days to do so when they first receive your account. During this time, they must show you documents that prove the debt is yours. You can stop their collection efforts cold by requesting this verification. Until proof is provided, the collector can’t legally continue to call you. (And if they ever call you at work, or outside the hours of 8AM to 9PM, you’ve got grounds for a complaint.)
While your work phone is off limits, your company’s isn’t. Debt collectors can use the Internet and other records to find out where you work. Then they can call to verify your employment, although they can’t ask for phone numbers or names of your supervisors.
Collectors can also look up phone numbers and addresses for your family members, friends, and neighbors. Then they can contact these people to try and get a current number or address for you. What they cannot do is supply details about the debt collection effort, unless you’ve given them written permission to do so.
If you’re being harassed by a debt collector who isn’t playing by the rules, contact the Better Business Bureau and the FTC to lodge a complaint. Keep visiting www.GetWiseCC.com or http://getwisecredit.blogspot.com/ to learn more tips for managing and reducing your credit card debt.

TransUnion Releases Snapshot of National Credit Card Debt

2009-01-04T14:46:00.000-08:00

Credit agency TransUnion released some discouraging figures on Wednesday, proving that consumer debt and delinquency are still on the rise। That’s not news to anyone who’s been reading the headlines lately, but TransUnion also released some interesting facts about which states are the most delinquent, and which are the most - and least - indebted.

According to TransUnion Trend Data, a sampling of 27 million consumer records throughout the nation, Nevada residents are the most delinquent in all the fifty states, followed by Florida। The relatively high rate of credit card delinquency in those states (1.79 and 1.45 percent, respectively) is tied to the housing and mortgage crisis. Both states suffered from the fallout. On the other end of the spectrum, consumers from Vermont and North Dakota were the least likely to be delinquent on their credit card payments.

Which state’s citizens are the most indebted? Alaska, with an average credit card debt load of $2,486। Tennessee and Alabama round out the top three. People from Iowa and the Dakotas carried the least amount of credit card debt.

As a country, we’re not faring so well। The total average credit card debt is up 1.4 percent from the previous quarter, and 7.7 percent from a year ago. Ezra Becker, principal consultant in TransUnion’s financial services group, finds it remarkable that the demand for credit cards is higher than the available supply. Experts blame the recession and the fact that many people are suddenly finding themselves unemployed and with fewer resources available. In response, they turn to credit cards to make ends meet.

The figures from this study pertain to the third quarter of 2008, which ended September 30th.

Credit Card Issuers Increasing Rates Before the Federal Reserve Finalizes Rules Prohibiting Credit Card Unfair Practices

2008-12-29T22:13:00.000-08:00

In the last several months, The Federal Reserve has received more than 62,000 comments on the upcoming rules designed to prohibit certain unfair credit card practices and overdrafts, mostly from consumers who support the rules. It expects to finalize them before Jan. 1st, 2009.
The proposed changes to credit card rules would prohibit banks from increasing the rate on existing credit card balances (except under limited circumstances). Right now, most credit card terms and agreements state that the issuer can increase the interest rates on existing and future purchases any time they want.
Credit card issuers seem to be responding to the new rules by increasing consumer credit card rates now, before the new rules go into effect. Individuals who don’t make late payments but carry a balance from month to month are seeing increases to their credit card interest rates when in the past, rate hikes were typically only given out to individuals who made a late payment or two.
Banks do have to notify consumers if they plan to increase interest rates, so keep your eye out for notices that warn you of the rate hike. If you get a notice - call the bank and ask to lower the rate. You will be successful about 50% of the time, because it is cheaper for a bank to keep an existing customer than it is to find new ones.

3 Credit Lessons from the Current Economic Crisis

2008-12-28T14:33:00.000-08:00

Governments lead by example, whether they want to or not. Sometimes they give us an example of what not to do. Wall Street execs are also unwitting role-models to millions of people. But mistakes can be made at any level, especially when irresponsible lending and spending are involved.

To keep your own credit in tip-top shape, pay attention to these costly lessons learned by banks, mortgage lenders, home buyers, and our national government as a whole.

Lesson #1: Credit isn’t a license to spend.

Just because you’ve got a lot of available credit doesn’t mean you should race out to spend it all. Lenders have a job to do, and that job doesn’t always have your best interests at heart – as too many home buyers have learned in recent years.
You must take personal responsibility for your spending. Keep records of your monthly expenses to see where your money goes. Take a hard look at the items you want versus the items you really need. Then decide if you can afford to accept and use the credit that’s been offered to you.

Lesson #2: Living beyond your means is a bad idea.

Many people criticize the sub-prime home buyers who got taken for a ride. Didn’t they realize they couldn’t afford those expensive houses? If so, why did they sign up for those mortgages? The answer: from top to bottom, our nation has a culture of “spend now and pay later”. Only, it’s not always easy – or even possible – to pay later.
This situation requires foresight and honesty. Look ahead before you commit to purchase a big ticket item on credit. How do you expect your financial situation to be in 5 years? In 10? 20? Be brutally honest here. If you’re struggling to stay afloat now, how will you rearrange your income or expenses to allow such a purchase? How is the projected job growth in your industry? Are you hurting your retirement by making this purchase? You need a strong financial plan and the tenacity to stick to it.

Lesson #3: If you ignore your credit, it will go away.

Your credit is your financial credibility. Just like our nation is finding it hard to keep borrowing money, you, too will lose your credibility with lenders if you max out your credit cards and open more accounts just to keep on spending.
Don’t batter your credit score by carrying too much debt. Pay down your credit cards so that your total debt is 25% or less of your total available credit. Stay on top of your payments and call your card company to negotiate if a late payment is unavoidable. It’s much better to be proactive than reactive when your credit score is on the line.
Credit can be tricky to manage, but the effort is worth it. There’s no bailout plan in the works for the average American card holder. If you dig yourself into a hole of debt, your choices will be limited to bankruptcy, or debt negotiation. Take a lesson from our current economic crisis and keep your spending in check.

Changes to the credit card industry

2008-12-27T21:52:00.000-08:00

Well, I guess the saying is “good things come to those who wait”, and apparently consumers can expect good things regarding new legislation in the credit card industry in the year 2010.
After more than 60,000 people wrote into the feds demanding changes, the biggest changes to hit the credit card industry were put in motion and will take effect in July 2010. Some of the changes include:

blocking card companies from applying higher interest rates on existing balances.
Late fees could not be charged without giving consumers at least 21 days to make a payment.

Banning of two-cycle billing
Any payment consumers make beyond the minimum must be applied to the balance with the highest interest rate or spread proportionally to all balances.
While these changes are good news for existing cardholders and will prevent the mysterious charges that sometimes occur on existing credit card statements, it will actually serve to raise the rates most new credit cardholders receive when applying for new credit. Consumers will probably not notice as many 0% offers in their mailboxes because the credit card industry won’t be able to afford to offer the lower rates (since it can’t increase rates on existing customers!)
According to a study by law firm Morrison & Foerster, these new changes in the credit card industry may reduce the credit card industry revenues by $12 billion per year.

2008-12-23T15:44:00.000-08:00

File Bankruptcy vs. Debt Negotiation?

Filing bankruptcy is no longer as simple as it once was. However, to some people in very bad financial situations, it often is the only option after exhausting all other bankruptcy alternatives.

“So When Should I File Bankruptcy?”

Honestly, every situation has to be evaluated on its own terms but in general, if you are facing huge amounts of debt and your income is low compared to your monthly payments or you have no income at all, then bankruptcy may be your only option. Your ability to qualify for the faster and easier chapter 7 bankruptcies also depends on what state you reside in.

The most common bankruptcy scenario involves medical bills which can pile up suddenly and dramatically after an unexpected illness or accident. A person without adequate health insurance, who suddenly falls very ill, can rack up medical bills in the tens or hundreds of thousands of dollars in a relatively short period of time.This situation is one where bankruptcy can be inevitable. However, if you just find yourself in debt as a result of spending more than you can handle and have racked up excessive credit card debt you want to look into debt settlement if your debt is over $10,000. Debt settlement is one solution that is a viable alternative to bankruptcy that allows you to reduce your debt and become debt free faster than many people are able to do on their own

www.GetWiseCC.com (800) 896-2261

Understand the basics of credit scoring

2008-12-21T21:55:00.000-08:00

You need to know that the two most important factors in your score are:

Whether you pay your bills on time
How much of your available credit you actually use.

It's essential that you pay all your bills on time, all the time. Set up automatic payments or reminder systems so that you're never, ever late. All it takes is a single missed payment to trash your credit score

You also don't want to max out any of your credit cards, or even get close. Keeping your credit use to less than 30% of your credit limits will help you get the best possible credit score

Finally, you don't need to carry a balance on a credit card to have a good credit score. Paying your bill off in full is the best way to keep your finances in shape and build your credit at the same time.