Get Out of Debt Fast With This Double-Barreled Approach

Do you spend more than you make? I used to. Struggling to pay for my education and start a family, I overspent because it seemed to provide some happiness, some relief.

But the thrill of buying stuff soon waned. Each new object brought less relief. Eventually, I realized that I was getting 80% of my pleasure from experiences that didn't cost much money. But recognizing that you don't need junk food and kicking the habit are two distinct things.

Here's how I got myself out of debt: [Read More!]

Debt Consolidation - Relief From Crushing Debt
Consolidate your debts & regain financial freedom


Debt consolidation is the process of combining several small debts (and monthly payments) into one larger debt (and payment). On the surface, this may sound like a bad idea. But if done properly, consolidating your debts can provide fast relief from the suffocation and anxiety of being under a crushing mountain of debt.

If properly planned, debt consolidation usually results in one monthly payment that is much lower than the combined amount of all of your previous smaller debt payments. It's quite common for debt consolidation to reduce total monthly debt service by 50% or more!

Credit cards are by far the most common cause of a crushing debt load. The interest on these accounts can be upwards of 21%. And to add insult to injury, the minimum amount due when each statement arrives allows for retiring just a very small amount of the principal balance. In other words, if you pay just the minimum amount due month after month, it will take years to pay off that account!

And if you continue using the card on a regular basis, the principal balance will actually grow over time instead of shrink. Multiply this by 5 to 7 credit cards (the national per-person average), and you begin to realize the importance of debt consolidation.

The process of consolidating your debts is very simple and straightforward. You simply contact a couple of lenders and tell them that you're interested in a debt consolidation loan.

First, they'll have you fill out a detailed loan application. Be prepared. Have with you a list of all of your debts, including account numbers and balances. You'll also need your tax returns from previous years (at least the last two) and your two most recent check stubs.

Next, they'll ask you some basic lifestyle questions. They'll want to get a handle on why you got into a financial bind in the first place. After all, they'll want a reasonable assurance that you won't do the same thing again.

The prospective lenders will verify your sources of income, review your credit history, and make you an offer for a debt consolidation loan according to their evaluation of all of this information. Each lender will offer you an interest rate and repayment term for a debt consolidation loan.

Evaluate each offer and choose the best one for your circumstances. In general, the lower the interest rate, monthly payment, and length of the loan term, the more attractive the loan.

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Credit Repair - Do It Yourself!
Step-by-step guide to effective credit repair!

Credit Repair services promise to remove all of the negative items from your credit reports, and some of them truly are bona-fide credit repair experts. But what the credit repair organizations don't tell you is that you can repair your credit file yourself, and you don't have to be a credit repair expert to do it.

Many credit repair services will charge you hundreds of dollars to help you clean up your tarnished credit report when you can easily do it yourself for free. And to add insult to injury, a few of them will use credit repair techniques that are unethical or even illegal! If you aren't careful, you'll end up in worse shape than you were in when you began!

That being said, if you do your homework and choose wisely, there are quite a few credit repair firms that do a very good job for a reasonable fee. Just ask for references (like past customers) and follow up with them. If you're diligent, a quality credit repair organization can do wonders for your credit profile.

The purpose of this article is to provide a starting point for those wishing to repair their poor credit histories on their own, sort of a tutorial in "do-it-yourself credit repair".

Here are the basic steps to follow for an effective do-it-yourself credit repair campaign:

1 - Get a copy of your credit report from all 3 major credit bureaus (Experian, Equifax, and Trans Union). You'll find them listed in the yellow pages. Contact each bureau and request a copy of your credit report. Expect to pay a small fee for each copy, but you can't repair your credit without them.

2 - On the back of each report, you'll find an explanation of the codes used in the file. Study these codes so that you'll know which accounts you need to concentrate on most while you're performing each step of the credit repair process.

3 - The first items to search for are what are known as "charge-offs". This means that the creditor has given up on trying to collect the debt and they have written it off as a loss. There is simply no way to effectively repair your credit without successfully getting these items removed from your credit reports.

Contact each creditor that has charged off a loan asking for re-instatement. Explain what happened to cause you to default and let them know that the problem has been fixed and you're ready to start paying on the balance due again. They'll understand that you're trying to repair your credit and likely go along with you.

Many times they will re-open the account and report it as current to the credit bureaus after they receive your first agreed upon payment. If all of your charged-off accounts are eventually re-instated and reported as current, your credit repair campaign will be doing very well indeed.

You may not be able to get all of your charge-offs re-instated however. If this is the case, contact these creditors again and request a "settlement amount". They will usually agree to accept 50% of the amount due as a settlement. Ask that upon receipt of payment, the account status be changed to "closed". Get this agreement in writing before sending your payment. Removing charge-off items are essential to a successful credit repair campaign.

4 - Next, search for late payment entries. These are usually pretty easy to clear up. Just contact the creditors and explain why you had difficulty making your payments on time. Tell them that the problem is fixed and you'll make your payments on time from now on. And make sure that you do make them on time or all of your hard work will have been for nothing!

Ask the creditors to remove the late payment entries after you have made timely payments for a period of time, say 90 days. Most will. Again, most people understand that many of us have financial difficulties from time to time and they'll cooperate and help you repair your credit.

5 - Judgments will need to be removed next. You'll have to pay off these loans in full in order to do so. Contact the lender and make arrangements to pay off the amount due with an agreement (in writing) that the judgment will be removed and the account reported as closed after full payment is made.

[Read More!]