Tuesday, June 10, 2014

Student Loan Directive

Student loans are something a large percentage of americans may turn to when looking to further their education and increase their earning potential and job possibilities.  Student loans are a great way for those unable to save enough to pay for college or those that have other financial obligations that cannot be put off. Unlike other types of loans or lines of credit student loans can be put off for a period of time while attending school and for a term after to allow you to begin to repay after you have secured work in the field of study you chose instead of burdening you with the responsibility of repayment when you are in a position where default is the most likely scenario.  President Obama in an attempt to aid students struggling to repay student loans signed a directive that puts a cap on the amount students can be required to repay on an annual basis to 10% of their total income.  This was done to reduce the number of defaulted loans and to encourage potential students to apply and utilize student loans without fear they may bot be able to repay them after they have graduated. This all sounds good at first but now lets look at the possible negative impacts this directive may introduce that were not even possible before.  President Obama was almost immediately publicly criticized for the action on the basis that he is encouraging non payment by allowing forgiveness after 20 years and capping the amount student can be required to repay to 10% of their total income annually. 

Wednesday, June 4, 2014

Credit Repair

Many companies out there advertise that they can help you with credit repair, but the quality of these services - not to mention what they offer - varies widely. Some companies really can help you with credit repair while others are actually under investigation for suspect business practices. If you decide to seek help from a credit repair company, be sure that the company is legitimate and offers you viable services.  In general, you should be looking for non-profit credit counseling services rather than credit repair companies (some of which are really just lenders offering home equity loans anyway, which are of limited use to you if you want to improve your credit).

credit repair companies
Check to make sure that the company has good standing with the Better Business Bureau and clients who are happy with the credit repair services they received from the company. Always read the paperwork carefully before you sign and make sure that you understand how much you are paying for and how much you are paying.

Before deciding to seek help from a credit help or credit counseling service, be sure that the problem cannot be resolved on your own. Indications that you may need credit counseling include:

-You cannot pay your bills and avoid the necessities of life.
-You avoid the phone, the mail, and the door because you are being harassed by collection agencies.
-You have avoided going out because you feel terrible about your financial state.
-You have no idea how you will repay your bills and loans - you do not know where to start.

Sunday, June 1, 2014

Fixing Errors on Your Credit Report

Traditionally fixing errors found on your credit report had been a difficult and confusing with the old complaint systems made available by the credit bureaus.  Recently Experian, Equifax & TransUnion have all updated their error dispute systems to make it easier for consumers to submit complaints regarding the fixing of errors on their reports and have included features within the new systems that also make it easier for the credit bureaus to make a determination regarding the item being disputed and how it will be addressed. 

    Some of the new features of the new error complaint systems include the following.

  • Allows the attachment of supporting documents
  • Provides a section where the consumer can state full details of the case

The changes to the previous error reporting and dispute systems once used by the consumer credit bureaus was prompted by new legislation presented to congress known as  The "Stop Errors in Credit Use and Reporting (SECURE) Act"

The "Stop Errors in Credit Use and Reporting (SECURE) Act" would require credit bureaus to perform a more diligent investigative and take corrective actions.  

The legislation states that the credit bureaus would now be required to :

  • Better investigate consumer error complaints
  • Review all new information submitted by consumers regarding the dispute
  • Submit all supporting documentation provided by the consumer to the lenders involved in the disputed information
  • Provide a free credit score annually to consumers when they request their free credit report
  • Gives consumers the ability to take the credit bureaus to court when errors have not been fixed

Paying Bills on Time

    When we go on vacation, of course we want to get away from it all, but when we forget to pay our bills while away, we risk getting dings on our credit that can affect our credit risk rating.  Make it part of your vacation practice to pay bills in advance or to arrange someone to pay your bills while you are away. Similarly, while you are ill, arrange to have bills paid so that bills don’t pile up and so that you don’t get marked as a “non-payer.” It is frustrating to be trying to improve a credit score only to suffer a setback over a small oversight.

    Consider online banking or telephone banking to make bill payment easier.  If you have trouble getting your payments in on time, consider online or telephone banking. This simple system is now available from virtually revery bank and can help you pay your bills in minutes - at any time of the day or night. If you travel a lot, on line or telephone banking can be a real life-saver as it will allow you to pay your bills no matter here you are.  Plus, you get instant confirmation of the paid bill and your payment is counted instantly. You no longer have to worry about payments getting lost in the mail or getting lost in a bureaucratic shuffle - the record of the payment is right on your bank account statement.  If you lead a busy lifestyle and have several late payments of bills simply because you can’t quite keep up with the errand of paying bills, online or telephone banking can be the solution that can help your credit rating by effectively putting a stop to late or unpaid bills. With these two very convenient and quick payment options, there really is no excuse for unpaid accounts.