debt relief vs debt settlement

Debt Relief vs Debt Settlement

Understanding Debt Relief vs Debt Settlement

Choosing between debt relief and debt settlement could be a little confusing if you do not supply the facts. You may realize you’ll need some form of tax assistance, however, you may not know how to obtain it. If you’re planning on each one of these programs, make sure you understand the benefits and drawbacks of each one.

Debt Relief Overview

The pros of the debt relief company include help organizing and paying down your existing debt. Once you contact a debt management company, they’ll help you contact creditors and are available to some form of agreement to cover less cash every month in your accounts. Although you will still need to pay all the money back, you may well be capable of negotiate more uncommon harassing phone calls and letters.
Debt management services work as a go-between along with you and your creditors. If you are uncomfortable conversing with people on the phone, this can be a great solution. As opposed to feeling intimidated by pushy and quite often obnoxious creditors, let a specialist speak to them and fully stand up to your rights as a consumer.

The main negative to using a debt management services is that it make a difference your credit. Many lenders view the usage of these kind of companies in the negative manner and so they could be less likely to lend money in the near future. Although, if your credit is in serious trouble, once you’ve gotten your debt in order, you can start to rebuild your credit and acquire back on your journey to financial freedom.

Debt Relief vs Debt Settlement

Additionally, there are benefits and drawbacks to working with a debt settlement company. In case you are seriously in debt, like many Americans today, you will probably find a debt negotiation company more helpful. These professionals can assist you with credit card settlement or most other types of huge loans. Your debt settlement counselor works directly along with your creditors to barter a more manageable amount of money you need to repay. This really is sometimes done by heading out the delinquency fees or area of the interest. Most creditors are happy to find least a of area of the money they’re owed. This is especially valid with credit card settlement. A lot of the bad debts could be interest – therefore the company is not really loosing on much. Saving 40% to 60% is normal with most debt settlement companies.

Another positive part of debt negotiation is that it is pretty quick and the debt will probably be paid completely. For those who have trouble saving money for any settlement payment, the company may also be capable of assist you with that. So long as you are behind on your own bills, you can use on of the companies to help negotiate a credit card settlement or any other loan payoffs quickly. If you are worried you will likely have to declare bankruptcy, debt consolidation is a superb alternative. An individual bankruptcy will stay in your credit file for quite some time and basically says you might never pay back the money you borrowed. While using settlement option, future creditors will at least see that you made an effort to pay back the money and hopefully that you’ve learned your lesson about borrowing a lot more than you are able to repay.

Just as the debt management companies, your credit will be affected by using debt consolidation. Additionally you need to make sure you might be using a reputable company that has your own interest in your mind. When you’re debt free, be sure you hold the important information so you do not find yourself in financial trouble again, later on.

Harassing telephone calls can cause one to become depressed as well as less want to make payments on your overdue accounts. When you contact a debt negotiation company, they’ll take care of the telephone calls and you may acquire some solace and feel in control of your daily life again.

Debt Settlement vs Debt Management

Debt Management vs Debt Settlement

Understanding Debt Management vs Debt Settlement

Choosing between debt management and debt settlement can be a little confusing if you do not have all the facts. You may realize you need some type of financial help, but you may not know how to get it. If you are considering either one of these programs, make sure you understand the pros and cons of each one.

Debt Management Overview

The pros of a debt management company include help organizing and paying off your current debt. When you contact a debt management company, they will help you contact creditors and come to some type of agreement to pay less money each month on your accounts. Although you will still have to pay all the money back, you may be able to negotiate less frequent harassing phone calls and letters.

Debt management services act as a go-between with you and your creditors. If you are uncomfortable talking to people on the phone, this is a great solution. Instead of feeling intimidated by pushy and sometimes obnoxious creditors, let a professional talk to them and stand up for your rights as a consumer.

The main negative to using a debt management services is that it could affect your credit. Many lenders view the use of these types of companies in a negative manner and they may be less likely to lend money in the future. Although, if your credit is already in serious trouble, once you have gotten your debt under control, you can begin to rebuild your credit and get back on your way to financial freedom.

Debt Settlement Overview

There are also pros and cons to working with a debt settlement company. If you are seriously in debt, like many Americans today, you may find a debt settlement company more helpful. These professionals can help you with credit card settlement or most other types of large loans. Your debt settlement counselor will work directly with your creditors to negotiate a more manageable amount of money you will need to pay back. This is sometimes done by taking off the delinquency fees or part of the interest. Most creditors are happy to get at least a portion of the money they are owed. This is especially true with credit card settlement. Most of the money owed may be interest – so the company is not really losing out on much. Saving 40% to 60% is common with most debt settlement companies.

Another positive aspect of debt settlement is that it is fairly quick and your debt will be paid in full. If you have trouble saving money for a settlement payment, the company may also be able to help you with that. As long as you are behind on your bills, you can use these companies to help negotiate a credit card settlement or other loan payoffs quickly. If you are worried that you may have to declare bankruptcy, debt settlement is a great alternative. A bankruptcy will stay on your credit report for several years and basically says you could not pay back any of the money you borrowed. Using the settlement option, future creditors will at least see that you made an attempt to pay back the money and hopefully that you have learned your lesson about borrowing more than you can pay back.

Just like the debt management companies, your credit will be affected when you use debt settlement. You also need to make sure you are using a reputable company that has your best interest in mind. Once you are out of debt, make sure you have the information you need so you do not find yourself in financial trouble again, later on.

Harassing phone calls can cause you to become depressed and even less like to make payments on your past due accounts. When you contact a debt settlement company, they will take care of the phone calls and you can get some peace and quiet and feel in control of your life again.

debt management vs debt consolidation

Debt Management vs Debt Consolidation

Understanding Debt Management vs Debt Consolidation

In present times, the terms like debt management and debt consolidation have become part and parcel of our daily lives.

They both are different methods of dealing with debt. Before jump-starting further, let’s discuss the basic difference between debt management and debt consolidation.

Debt Management- A debt management plan is a process to help those people who are mired deep down in the debt crisis. It is done to reduce the monthly payments. You make an agreed monthly payment to the company and in turn they make payments to your creditors based on the agreements.

As the creditors know that you are associated with debt management companies, these companies try to convince creditors to lower down the monthly payment through negotiated interest rate. The amount varies in different cases. Also, sometimes your payment will be reduced to 50 to 75 percent. It may sound good, but it is not applicable in every case. It is applicable in rare cases. You need to shop well before exploring any option.

A debt management program act as an interface between your creditors and you. Now, you don’t have to worry about any pesky calls or their demand letters, a saving grace, isn’t it?

Your income and expenditure is taken into account in establishing this plan.

Debt Management vs Debt Consolidation

Debt Consolidation- It is a process of borrowing money from lender to pay off numerous debts.  The result is you have to pay a single debt instead of several debts. Also, if the loan is taken at lower interest rates, it means you are saving on the payment front.  Lower payment can also be achieved if you are borrowing tenure is longer than the original debts.

Debt consolidation is based on the assumption that you have a poor financial situation and cash flow that will help you to qualify for the consolidated loan. In simple words, you need to have good credit score to obtain new loan.

Debt Consolidation is a process that is well beyond the reach for most of the people, especially who are under loads of debt. If things have reached to the level, where you’re really struggling to meet your financial obligations and you have very little assets in your kitty, debt consolidation plan is not right for you.

On the other hand, debt consolidation is a great way to simplify things and reduce interest rates.

Debt Management plan is a way to reduce the monthly payment to arrive at a win win situation. It is a plan to get at a workable situation without getting additional loan.

Wrap up

In nutshell, debt management and debt consolidation are two great options to consider, if you want to settle the payment with your creditors. Apart from this other options available is bankruptcy and voluntary arrangements. Which option is ideal for you, it all depends upon your circumstances.

You should explore all options carefully because it may affect your financial situation.

Best Ways to Improve your Credit Rating

Best Ways to Improve your Credit Rating

There are lots of ways to improve your credit rating. It can be as follows

Avoid Opening Unwanted New Credit Accounts

Too many accounts are a burden and cumbersome to manage. Nevertheless, they sap out your critical resources. Moreover, they reduce the average life of your credit accounts. Whatever weight age you had with your existing accounts will get dampened by opening new accounts, if you don’t use them.

Don’t close accounts in a hurry

Closing down additional accounts may help you in the short term. But prospective creditors will unnecessarily get alerted as they remain on the credit report. This sure will have a negative impact on your report.

Review your credit report regularly

You can order your free reports from all the three reporting agencies once a year. But the smarter way is to get them at spaces of four months each. This cost free way gets you reviewing the credit report regularly and helps to identify and remove errors from the reports. According to FICO this helps improve your credit rating by about 10%.

Meet a professional

Seeking professional help is advisable. But take care not to fall into trap laid out by scam masters who vanish as fast as they appeared. There are some non profit organizations which help you improve your credit rating.

Get Your Act Together; You are Not Alone

IF you are worried about how you can do all these things, it is not surprising. It is natural for anyone who is at the end of the road of his financial life. First of all, trace back the reasons that lead you to this situation. It can be one of the now more common of the reasons, like job loss, a marriage divorce or a personal accident etc. It is true that each one of these has a potential to set you back financially by years. But don’t panic now. The fundamental truth in your quest to improve credit rating lies in your courage and meticulous planning and finally your perseverance to execute it.

Improving credit ratings is not all about formulating strategies. If you are thinking &I; can improve my credit rating”, think again. Following the steps to improve credit rating involves a huge amount of discipline and hard work. If you succeeded in your endeavor, you can teach others how to improve credit rating.

Helpful Tips to check bad credit habits in small businesses

The small business owners often blend the personal credits and the business credits without having a proper account for each separately .This the main reason for their credits to have its toll. Working out on your credit and trying to make your expenses out of it more accountable will help to manage credits. Keep reading.The article covers

  • Understand How Bad Your Credit Could Be
  • Review the Details and Rectify the Mistakes, if Any
  • Separate Personal and Business Credits Expeditiously
  • If the Report is Not a Mistake, get ready to solve them

Small businesses have a characteristic problem in that they tend to connect their personal credit with the business credit. Operating bad credit small business, whose credit history is connected to personal credit, will always have its toll. Take for example, the bad credit small business loans, financial institutions like government banks will hardly consider your loans application after you separated the two. In this scenario owners find small business bad credit financing an uphill task.

This is mostly because the entrepreneurs sometimes abuse their personal credits, leading to fears that they might follow the same with business credit too. This is just the tip of the ice berg. In the following paragraphs let us see how, then, small business bad credit financing is done and the larger picture of how a bad credit small business is run.

Small business owners often have great business ideas and the necessary zeal but no requisite finance. Although bad credit should worry you, don’t panic. Get your act together and fast.

Understand How Bad Your Credit Could Be

This is the first step in your effort to erase bad credit. No matter whether it was your excessive use of credit card or the missed payments on your loans or credit card payment, make sure what negative points your business credit history has. To this end, you can get your credit report from all three credit reporting agencies. Because you never know which reporting agency your creditor will or has already reported to. Now you have the facts and figures on hand.

Review the Details and Rectify the Mistakes, if Any

Reports can notoriously have mistakes more often than less. List out them out chronologically and correspond with the appropriate reporting bureau with evidences (this process is called as disputing). Credit report bureaus reinvestigate and correct the mistakes or delete an obsolete entry from the file. But if your dispute is frivolous, they remain intact.

If the Report is Not a Mistake, get ready to solve them

If the negative points in the report are genuine, you need to work out an aggressive plan of action to resolve them. For example you can start paying of the debt one by one perhaps starting with the highest one with high interest first.

Separate Personal and Business Credits Expeditiously

Small business owners have shown tendencies to withdraw business credits for personal use. This on one hand deprives business of the funds needed for exigencies and on the other reflects poorly on your fiscal discipline. Lenders naturally perceive that one draws business credits for personal uses when the owner is bereft of money in his own credit. So, separating the accounts to keep credit reports clean is one big step towards improving bad credit report.

How Do Corporate Credit Rating Agencies Operate?

As with the consumer credit, there are dedicated agencies for corporate credit ratings too. Although corporate credit rating agencies do a somewhat similar work, the analytical methodology adopted by them and the coverage hugely varies in comparison to consumer credit rating agencies.

This is because the corporate credit rating agencies operate in various countries across the globe. In addition to the basic financial factors, they have to build the economic scenario and political stability of the country to which a corporation or its debt instrument belongs, into the ratings.

Consider this example. Although a corporation is doing well in financial terms, the overall market economy to which the corporation belongs and political set up may not be stable. Thus these two factors carry a lot of weight age in the corporate credit ratings. Following is the list of some respected corporate credit rating agencies of long standing.

For detailed information on how the ratings are placed on corporations you may please refer here.

Corporate Credit Rating Agencies

There are a number of corporate credit rating agencies and some of them are as follows

 

Moody’s Corporation

This is one of the highly respected sources of credit analysis and risk rating services in the world. Moody’s operate around the globe (in over 100 countries) with close to 170,000 securities under their analysis. Moody’s rate, track and analyze more than $35 trillion worth of debt.

Standard and Poor’s

A division of The McGraw-Hill Companies, Inc is a preeminent provider of services such as credit ratings and global services. Who doesn’t know of their highly recognized S&P500; a financial market index services?

The Dun & Bradstreet Corp

This is perhaps best known by its acronym D&B.; It is still better known for their D-U-N-S numbers obtained by more than 2.7 million US corporations. D&B; offers major services such as risk management, sales and supply management amongst others.

Fitch IBCA

It is another of the highly ranked corporate credit ratings company. Like its peer group, Fitch corporate credit ratings provide information to help investors determine associated risks when investing in a particular instrument or a company. Their services extend to Europe, UK and Americas.

You can get Free Corporate Credit Rating advice from corporate credit rating agencies after you sign up with them. Credit ratings agencies provide a cost free corporate credit rating access in a limited fashion unless you are a paid subscriber.

Hints to build up corporate credit ratings

Maintaining proper credit ratings are of paramount importance for corporate as it spells the investors’ decisions on investments in a company. It is only after scrutinizing a company’s profile the investors come forward to invest .The credit ratings vouch for the credibility of the company during such scrutiny. Read more.The article covers

  • Understand How Bad Your Credit Could Be
  • Review the Details and Rectify the Mistakes, if Any
  • Separate Personal and Business Credits Expeditiously
  • If the Report is Not a Mistake, get ready to solve them

Corporate credit ratings are analytical results of credit worthiness of corporations. The corporate credit rating agencies which do this analysis, take into consideration, factors such as, mainly, the history of borrowing and repayment, the liabilities of the corporations and assets available to them. For international investors this helps a lot to decide whether investments in companies or certain countries can be risky.

Corporations pay a huge importance to their credit ratings as they are directly connected to their ease or otherwise of finding finance and the cost of borrowing it. Also credit ratings can be applied to any type of investment instruments like short and long term debts, securities as well as, as in the international investment scenario, a country’s foreign currency reserves and obligations.

From a corporate company’s point of view, higher ratings help it raise large funds in domestic as well as international finance markets. A AAA (pronounced as triple A) rating as given by Moody’s and S&P; is perceived as lowest risk possibility, regardless of the geographical location of that company. Companies with this rating can easily raise funds than lower grade ratings. So corporations looking to raise their credit ratings, first pay importance to improve their credit ratings. Here are some points they use among others.

  • Getting the corporate credit report is among the first things to do. You can tally facts with what is found in the report.
  • Take remedial actions in case of errors and omissions, such as inaccurate representations of your company’s financial status and transactions.
  • A corporate credit report also contains information on your company’s ability to repay the debt in both your local currency as well as the foreign exchange. You may be at comfort to pay back the debt at your local currency owing to your capital adequacy ratio (a mathematical figure indicating the abundance of cash availability). This can be because of multiple reasons such as political-economical factors. Adopt policies that help resolve this inadequacy (think of moving your business to special economic zones. Some countries provide relaxation on foreign exchange transactions from this location)
  • Factors such as transparency in the country’s stock market, holding pattern of the company, policies on foreign direct investment do affect your corporate credit ratings. You can try and improve factors that are in your control like foreign currency reserve, public investment enhancement etc. to improve your ratings. However these steps may help move up from BB to BBB and so on.

Now-a-days we hear a lot about credit repair guide kit e-book. Publishers claim to have a magic formula to repair bad credit with much ease. You will do a favor to check with them before purchasing them. Because improving corporate credit ratings is not all that simple considering the factors involved. Corporate credit rating agencies in the business have a stake they don’t want to loose.

Hints to boost up your credit ratings

Hints to boost up your credit ratings

Maintenance of a good credit report is important to get cash advances if you are confronted with impromptu expenses. This is possible if you train yourself to use your credits in an appropriate manner. Spare time to review your past credits and identify the unwanted expenses .If you bring a discipline into your spending you can certainly maintain a good credit rating. Read more.The article covers..

  • Top Tips to Improve Credit Rating
  • Pay you bills on time and consistently
  • Keep balances as low as you can
  • Manage your credit accounts wisely
  • Best Ways to Improve your Credit Rating

Before we set on to discuss the tips to improve credit rating, let’s accept a few truths. That regularly reviewing of your credit report needs to be given equal importance as medical checkups. You can draw ideas to improve your credit rating from reviewing your credit report. Rest assured all scoring procedures take into account that every person misses a payment or two in his life time.

Unfortunately, many who are under stress because of bad credit rating don’t know how to improve credit rating. Most of them confuse this to erasing the errors in their credit report. You can use the following list of tips to improve your credit rating. Mind you, you will have to diligently follow them, if at all you want to see any results.

Pay you bills on time and consistently

Paying your bills on time and very consistently is the foundation stone on which you can build upon your steps to improve credit rating. The regularity clearly reflects your financial stability and intentions to payback your debts. These payments will steadily show-up on your credit report as paid on time.

Keep balances as low as you can

Suppose you are paying your monthly credit installments. It is wise to pay as much as will be possible so that your unpaid balance, if any, will be low. This will send a strong signal to your creditors of your financial recovery. Secondly, the low unpaid balances can, at best accrue a small interest, which is easily manageable.

Manage your credit accounts wisely

How well you manage your various credit accounts matter a lot. One foremost thing to keep in mind is that, you will want to begin paying off from the highest debt account and move down the order. Please pay attention to include that debt account which has the highest interest also. Apart from quickly reducing the debt in key accounts it shows finance management abilities. This is a strong indication that you are on the path to recovery and from there would most certainly rocket your way to a stronger credit rating.

Dealing with bad credit loans

Many of the bad credit problems that so many consumers are dealing with can be solved by taking on yet another loan to pay off expensive credit card debts or other loans. Borrowing to pay off another loan is never really wise and this type of situation often causes even greater financial problems for consumers.

Many people in debt the loans issued to these consumers often come with a much higher interest rate than the rate on regular loans. People delaying with bad financial problems are often more than happy to sign up for a high interest loan to get rid of their troubles and in the process of obtaining the new loan they often forget to read the terms and conditions of a new loan.

People with bad credit often have trouble getting a mortgage or a new (family) home. This of course causes more problems than one and there are more and more companies offering mortgages to people with bad credit. Of course, again, these mortgages come at a higher interest rates. If someone’s credit history is a problem it is best to get some advice from a free debt consultant that people can be referred to by their bank.

Consumers should always keep in mind that a mortgage is only for people who manage to pay off their credit. There are many different types of mortgage lenders and people should know that they are purchasing a product when they apply for a mortgage. Shopping around for a mortgage with good interest rates is not only for those with good credit ratings. Bad credit borrowers buy the same financial product when getting a mortgage or loan. Doing some research will pay off big time when it comes to getting a new loan or mortgage and banks will always compete.

How Credit Repair Companies Erase Bad Credit Legally?

Will The Credit Repair Companies Really Erase Bad Credit Legally?

Yes, they will do it for a fee. As a final resort to legally repair bad credit, you can approach your creditors and try to resolve the matter with them.  You may have to agree to pay off the old debt at a reduced agreed amount. And in exchange the creditor might just agree to write to the credit agency favorably. But the success of their claim to legally repair bad credit depends only on whether they represent facts while disputing the negative points in your credit report with the credit bureau.

Because erasing of bad credit legally from the credit report is only based on factual evidences and nothing else. On the other hand, resorting to falsified tactics (such as changing your identity etc) could lead to serious consequences. Accurate and comprehensive remarks in your credit report are going to remain for 7 years for bad credit and 10 years for bankruptcy.

What is Bad Credit History Bank Account?

Bad credit bank accounts are those offered to people with bad credit report. These types of accounts are also available to those who have bankruptcy or county court judgments against them. These accounts help you improve your credit history without being under constant fear of you being caught for fraud. The features of the account may vary from bank to bank. So, remember to check out them with the bank where you plan to open this account.

If you succeed in erasing bad credit legally, you can get the credit agencies to send the fresh report copies to whosoever have got it in the last one preceding year. Mind you, the credit reporting agencies will not do this them selves, unless you ask for this service. The reliefs of erasing the bad credit can make you forget all the trivial troubles.