CREDIT PROBLEMS? IMPROVE YOUR CREDIT
If you have fallen behind on your credit obligations here are some helpful tips on getting your credit standing back on track.
If you have had credit problems, be honest with your mortgage consultant and tell him or her about your credit problems. Mortgage consultants are just like you and me and realize that things happen in life that is sometimes out of our control. You may have been laid off from your job, had a death or sickness in your family or had an incident where you needed money right away. If your credit obligations have been paid in a timely manner for at least twelve (12) months, in all likelihood, you are on your way to re-establishing your credit.
However, if you have fallen behind on your credit obligations here are some helpful tips on getting your credit standing back on track.
1. If your credit is not in the best of shape, try reducing other expenses, even if it means cutting back on some of the things you enjoy the most. Instead of eating out three times a week go out to eat once a week. If you are an avid moviegoer cut back on the number of times you go to the movies. Create a budget by adding up how much you would save by cutting back on leisure activities and apply the savings to your debts. Apply the savings to your smaller balances first and continue to do so until you can get into the larger balances. Do not apply for an unsecured loan. All you�re doing is replacing unsecured debt with more unsecured debt.
2. If you try the above tip and still cannot see the light at the end of the tunnel you may want to consider Consumer Credit Counseling Services (CCCS). Credit Counseling is similar to a Chapter 13 Bankruptcy but is not frowned upon as heavily by lenders. You can search the Internet for a quality Credit Counselor or simply check your local directory listings.
3. If CCCS is unable to assist you in paying your debts you may want to consider filing for bankruptcy. A Chapter 13 Bankruptcy is a reorganization of your debts, meaning that you will have to repay your obligations. You do not have to repay a Chapter 7 Bankruptcy. Lenders frown upon both forms of bankruptcy but the Chapter 13 is the more favorable of the two as you are showing good faith in attempting to repay your debt. A Chapter 13 remains on your credit reports for 7 years. A Chapter 7 remains on your credit report for 10 years.
The most important aspect of re-establishing your credit is to make your payments on time. If you have money available to you before the due date of a bill, pay it. You can save on accruing interest by doing so. Also make sure that you send in your payments at least 7-10 days from the time it�s due. Although you may send before the due date you must leave time for your payment to be received and posted. Why pay late fees if you don�t have to. Haste makes waste.
Never send cash. Open a checking account if you don’t already have one. If you don�t have a checking account send money orders and keep your receipt. If you happen to move, notify your creditors that you have done so.
If you think you will have trouble meeting any of your obligations, contact your lenders immediately. By contacting them immediately you can work out a payment schedule with them
Credit cards can be great during a crisis, since they allow you to charge items or take cash advances and paying them off over time. But they can also be dangerous if you aren’t careful and charge more than you can afford. If you are tired of taking a few hours during a week to write out checks only to see your balances remain the same, you may want to speak with a loan consultant and explore that possibility of using your home equity to obtain a debt consolidation loan. Better yet,