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CNN just reported on how to “crack the code for a perfect credit score” As I mentioned on previous articles, there are lenders looking to lend to bad credit borrowers, but the terms may not be the best. So why not try to fix your credit, manage your debts (instead of declaring bankruptcy and being in years of credit and possibly job limbo).

To summarize the article, Fico the company that produces the Fico Scoring model explains that there are 5 factors that determine your credit score number, which could be the key to great personal loan rates, rather than struggle with bad credit. So here they are: Payment history, the amount you own in your credit lines, length of credit history, how much credit have you applied, and types of accounts.

The article emphasizes payment history as the most important ruler on how your credit score is determined. So there you go.

Personal Loans, bad credit or not affect your life, not only because they prevent you to save, but also because it ties you up to a payment plan that does not allow you to grow financially. For most people, it starts with the infamous student loan. Student’s work really hard to get to the school of their choice, but after years of study, and debt, they enter a lackluster job market. Which further ads to debt, and long term payment plans.

Rite of passage like getting your own appartment, getting a job and growing in your career are affected. Students are now opting to moving with their parents, going to state schools, negotiating rates with loan companies and looking for ways to save in college education.

As the economic recovery looks rockier than initially expected, people are bracing for more bad data from the US unemployment report. Economist and financial analyst are hoping for positive news, but expect more negative reports along with housing and consumer spending.

On positive news, the fed chief expected 2011 to be more positive in terms of job growth and GDP (although revised downward). On personal credit, finance companies are lending less to good or bad credit borrowers as they are expecting more bad news from the financial markets.

Government issued grants for the sole purpose of debt relief aren’t generally thought to be available to individuals, but rather to other countries, larger entities and government-supported programs. However, grants are available to individuals for numerous purposes, such as starting your own business or repaying tuition costs, and ultimately can be used for personal debt relief.

Each and every year, billions of dollars are allocated for the use of government grants. Although many people aren’t aware they even exist or simply feel they aren’t qualified and don’t bother applying. Grants obtained through the United States government do not have to be paid back and are also interest free and non-taxable.

A grant for personal debt relief, or debt reduction as it is sometimes called, may be considerably easier to obtain than a traditional loan through a bank or other financial lender. This is particularly true for those people with less than sterling credit, since unlike loans, grants don’t require credit checks, co-signers, collateral, or security deposits.

Starting a business that is funded by a government grant is an excellent way to generate more income in order to repay your existing debt, and also for paying off business-related expenses. There are grants available in the hundreds of thousands of dollars for entrepreneurs to use for paying off debt that was previously accrued, or for start-up expenses, equipment, and legal expenses. For those people who have found themselves in debt due to heath care costs, there are also grants to help pay for medical needs such as prescriptions, nursing home care, and dental care. Read more of this >>

A few years back my sister became pregnant and had to quit school. She had gotten behind in high school, because of a troubled family. She finally decided she had to finish and though one year behind, finished high school Her plans were to go on to college, which she did. It was her pregnancy that put a stall on these plans.

She paid for her first semester out of her own pocket, with money she had earned from a summer job. When she became pregnant, she was pretty much on her own, without any help from the father or his family. Although she had every intention of going back to school, realizing how important it was for her to getting a decent paying job, she was struggling to just keep up with the mounting hospital and baby bills. She barely had enough money to support herself, let alone pay for an education. She was also worried about who would baby sit her son while she was attending school, even if she could figure out to get there.

My sister had excellent grades when she did attend, so it would be a shame if she could not raise the money to continue and ultimately complete her education. The lack of funds should not be the major hindrance that it once became. Her impressive transcript of grades I thought should help her continue. I told her about grants that the US government has for single parents, especially single female parents. Since many students are encouraged to get loans, ultimately leading them to drown in debt, she felt that this would never be an option. Single parents are often denied scholarships to help pay for school fees and living expenses for this reason. Read more of this >>

Authorized User trade lines on your credit report will soon, no longer be factored into your FICO score model.

Becoming an authorized user (AU) on an established credit account that has a long and positive history has been effective for years in establishing good credit for your children, a stay at home spouse or significant other. The account holder could simply have a card issued to you and you would inherit the history of the account. The card holder could even keep the card in a sock drawer or cut it up. You, as the AU, would not have to use it even once. The AU would not be financially responsible for the debt if it were not a joint account. The only draw back was if the account holder missed payments, the AU report would reflect the 30, 60, 90 day late payments.

Well, this was one of the tools available to people to accelerate the increase of their credit score after a negative credit event. Probably not even a well known or often used tool, comparatively. It was, however, one of the methods that I have, for years, suggested to consumers as a way to increase scores or off set the bad items. Not to go out and rent someone’s credit for a fee (which is reportedly why this once useful avenue is being shut down). No, I would encourage people to network with their family and friends to look for a hand up, not a hand out. Read more of this >>

At one time or another, many of us have wrangled with credit card debt. While, there is no magic secret to getting out of debt, there is a strategic plan to follow to tackle your debt head on. You first want to find out what you really owe. Write down every credit card you have that has a balance, with the interest rate and current balance you owe. Write down every person or other institution you owe money to. Include student loans, loans from 401(k) plans, mortgage and auto loans.

Your next step is to run your current credit report and get your credit score. One place to do this is at www.myfico.com. You will get your FICO score and a credit report from each of the 3 credit agencies: Experian (www.experian.com), Equifax (www.equifax.com), and Trans Union (www.transunion.com). If this list (not including the persons you owe money to) is different from your credit report, your credit report is the list to go by, unless you know for a fact there is a mistake on your credit report.

The next step is to consolidate all your debt and lower your interest rate as much as possible. Before you do that, call your credit card company today (ask for a supervisor) and ask for a lower rate. Most of the time they will work with you. If they give you a hard time, let them know you are switching your card to another company. This will lower your interest payment right away. Read more of this >>

If you have fallen behind on your credit card payments, you can expect a phone call. OK, you can expect a lot of phone calls. If you are going to attempt to deal with the debt collector on your own, remember that you are going head-to-head with a tough professional that does this everyday for a living.

It pays to know your rights. Keep a detailed record of all of your communications when you speak to them. Note the time and date of the call, the person that you spoke with (get their ID number if they have one) and everything that they said.

Before talking to any debt collector, review the Fair Debt Collection Practices Act. This is a general “rule book” that the creditors have to play by. Follow this link to better prepare yourself for battle. www.ftc.gov/bcp/conline/pubs/credit/fdc.htm. Many states also have their own “rules of engagement” that you should know. You can find out more about what your state allows a debt collector to do by contacting your local attorney general’s office. Just do a quick Google search; attorney general California debt collector (for example) and there will be a direct link about that States Fair Debt Collection Practices Act.

After you have beefed up on the FDCPA, here is what you should do next:

Prioritize your bills. –

No matter what a debt collector says, when you are having financial difficulty, the most important bill to pay is not your credit card bill. Providing for your family comes first. You need to make your mortgage, vehicle, utilities and insurance payments. Provide for groceries and other life essentials as well. If you don’t make your mortgage payments, you run the risk of losing your home to foreclosure. If you don’t make your vehicle payments, you run the risk of having your vehicle repossessed (not to mention that in most cases, you won’t be able to get to work to make money to take care of your bills). Not eating and skipping required medications is not a good idea for obvious reasons.

If you don’t make your credit card payments, they would have to sue you first before they could do anything to you. This process will normally take several months to get to. They can’t garnish your wages or put you in jail or whatever other things a debt collector will say to get you to pay them right away. So remember, take care of your family and your most important bills first.

Estimate how much you can afford to pay. – Read more of this >>

Have you ever wondered why collection agencies keep calling you more often? There are numerous situations that credit collectors use to get the money you owe.

But let’s start from the beginning when you get your credit card. Obviously everyone knows that you need to pay your credit card on time. However, situation is not always the same when it comes repaying your credit card debt.

Once you are late on your credit card, Credit Card Company will alert you and gives you a chance to work with them to pay off your debt. This is the best chance ever, if you credit card company is willing to work with you. In most cases you will receive late notices and your credit score will start to take a hit. If you are one day late on your credit card payment, your credit card company will report this late as 30 days late on your credit report. Afterwards; you may receive another notice to call their credit department to help you out with your situation or work out some re-payment plan.

If there is no action from you or credit card Company, your unpaid balance may end up in collector’s hands. Collections agencies are commission based most of the time. They have pre-arranged profit negotiations with credit card companies and typically credit card companies will take 40%-60% from your balance you own. If collector is able to collect more from you, they keep larger chuck of the profit for themselves.

Credit card companies are very serious about privacy of their data and most of the time dictate how your information should be transferred before collector can view your name, address, SSN number, etc.. Some of the top requests are SSL (Secure Server Locket), 128 bit encryption, FTP encryption and password, etc. With all of this and more, there are few credit collection agencies that spend money on more sophisticated software as it is very costly for them. Read more of this >>

Are you tired of receiving calls or threatening letters from debt collectors? Well these are just among the two approaches that are commonly used to oblige the debtor to pay for their overdue debts. If you want that irritating phone calls and letters to stop, then you need to know the ways on dealing with collection agencies. Sometimes, it is difficult and frustrating to handle problems with debt collectors, but if you chill out and follow the following steps, then you can put a stop to such troubles:

1) Know your rights when dealing with debt collection agencies. Among such rights are:
• You have to be treated fairly and your privacy should be respected. You can ask them not to contact you when you are at work or at a time and place that’s not convenient to you.
• The collection firm should not oppress, harass or abuse you by threatening you, publishing your name or by speaking to you in an obscene way.
• They should not use misleading or false statements when collecting your payments such as implying falsely that you have made a crime, that they are attorneys or representatives from government, or they are working for a credit bureau.
• The agency should not use unfair practices when collecting payments for your debts.

2) Keep great records. When a debt collector contacted you, get information from him/her.

• You should ask for the caller’s name and the agency’s name as well, the address and fax number of the collection firm, the name of the lender and the amount of money allegedly owed.
• Write down the name of the person who’s calling you and a summary of your conversation. Your conversations shouldn’t be taped unless the caller knows that your discussion will be recorded. Also, make sure to keep in file copies of all the physical communications that you have sent and received. Read more of this >>