Tips For Eliminating Debt
Do you have credit up to your ears? If so, hopefully most of it is good credit.
If not, there are many ways to fix it.
I for one have had very bad credit in the past.
Medical bills, student loans that were in default, all on top of regular bills that needed to be paid.
This is the worst part, I was unemployed and we were a family of four with one very small income.
I still managed to get myself out of debt and so can you.
Let me start by telling you the importance of a good credit score and what that is.
Your credit score or FICO score is between 350 and 850.
Usually a lender will consider giving you a loan if your score is a 620 or better.
There are exceptions to this rule and I will get to that later.
It is important to pay your bills on time and maintain a good payment history so that when you go into a bank to try and get a loan, they will know that you are good with your finances.
In my case, I had other things that got in my way that I could not control and still I got a loan.
Because I didn't have a lot of money, I had to figure out a way to get things off my credit report.
I researched everything I could about getting out of debt and learned many interesting things.
The first thing you need to do is write a validation letter to each of your creditors.
This is a letter stating that you would like proof that this is indeed your debt.
They have 30 days to get back to you with proof or by law, they have to take it off your credit report.
Special note: Don't think that they will automatically do this for you.
You need to keep accurate records of the time and date that you sent it and make sure to follow up with them.
Also, find out about the statute of limitations on your debts.
A creditor, by law, can only keep things on your credit report for 7 years.
Anything over that has to come off forever.
Another very interesting thing that I learned is that you can negotiate a settlement with your creditors.
Even if you owe them thousands of dollars, chances are if it has been on your credit report for a long time, the creditor has already charged it off.
What does this mean for you? The creditor has already written this debt off which means you can offer them pennies on the dollar of what you owe.
I can probably guarantee that that they will tell you that they can not settle for such a low amount.
"That's Bologna!" If they say that, then you need to tell them that you are trying to take care of your debts but are limited to a certain amount and that you will have to work with the creditors that will work with you.
Then you give them about 2 weeks to a month, and you should see a nice little letter in the mail with a nice settlement amount on it.
If that doesn't work, get online with the three credit bureaus (Experian, Equifax,Trans Union) and dispute anything on your file that you think is not yours or that you think is not accurate.
This is the best part, if the credit bureau doesn't respond back to you in 30 days, by law it has to be taken off your report, even if it is yours.
Isn't that great?! Here's the catch with this one, there are certain times of year when the credit bureaus are the busiest and it would be very beneficial for you to learn when and this is when you want to dispute your debts.
There is so much information out there that can help you get out of debt, sometimes without even having to pay it off.
Getting back to the low credit score.
There are certain instances when this isn't as bad as you think.
If you have settled your debts or had them removed from your report (remember, a loan officer only sees what is on your report) it can still take a few months to raise your score dramatically.
Not a problem.
As long as they see that you have paid off your debts, you will be considered a good candidate for a loan.
Also, you will be able to qualify at a better interest rate.
It is very easy to get better credit and have the life you've always wanted, debt free.
There are many resources out there that can help but finding the right one is key to helping you get out of debt fast (even with no money) and raising that credit score.
If not, there are many ways to fix it.
I for one have had very bad credit in the past.
Medical bills, student loans that were in default, all on top of regular bills that needed to be paid.
This is the worst part, I was unemployed and we were a family of four with one very small income.
I still managed to get myself out of debt and so can you.
Let me start by telling you the importance of a good credit score and what that is.
Your credit score or FICO score is between 350 and 850.
Usually a lender will consider giving you a loan if your score is a 620 or better.
There are exceptions to this rule and I will get to that later.
It is important to pay your bills on time and maintain a good payment history so that when you go into a bank to try and get a loan, they will know that you are good with your finances.
In my case, I had other things that got in my way that I could not control and still I got a loan.
Because I didn't have a lot of money, I had to figure out a way to get things off my credit report.
I researched everything I could about getting out of debt and learned many interesting things.
The first thing you need to do is write a validation letter to each of your creditors.
This is a letter stating that you would like proof that this is indeed your debt.
They have 30 days to get back to you with proof or by law, they have to take it off your credit report.
Special note: Don't think that they will automatically do this for you.
You need to keep accurate records of the time and date that you sent it and make sure to follow up with them.
Also, find out about the statute of limitations on your debts.
A creditor, by law, can only keep things on your credit report for 7 years.
Anything over that has to come off forever.
Another very interesting thing that I learned is that you can negotiate a settlement with your creditors.
Even if you owe them thousands of dollars, chances are if it has been on your credit report for a long time, the creditor has already charged it off.
What does this mean for you? The creditor has already written this debt off which means you can offer them pennies on the dollar of what you owe.
I can probably guarantee that that they will tell you that they can not settle for such a low amount.
"That's Bologna!" If they say that, then you need to tell them that you are trying to take care of your debts but are limited to a certain amount and that you will have to work with the creditors that will work with you.
Then you give them about 2 weeks to a month, and you should see a nice little letter in the mail with a nice settlement amount on it.
If that doesn't work, get online with the three credit bureaus (Experian, Equifax,Trans Union) and dispute anything on your file that you think is not yours or that you think is not accurate.
This is the best part, if the credit bureau doesn't respond back to you in 30 days, by law it has to be taken off your report, even if it is yours.
Isn't that great?! Here's the catch with this one, there are certain times of year when the credit bureaus are the busiest and it would be very beneficial for you to learn when and this is when you want to dispute your debts.
There is so much information out there that can help you get out of debt, sometimes without even having to pay it off.
Getting back to the low credit score.
There are certain instances when this isn't as bad as you think.
If you have settled your debts or had them removed from your report (remember, a loan officer only sees what is on your report) it can still take a few months to raise your score dramatically.
Not a problem.
As long as they see that you have paid off your debts, you will be considered a good candidate for a loan.
Also, you will be able to qualify at a better interest rate.
It is very easy to get better credit and have the life you've always wanted, debt free.
There are many resources out there that can help but finding the right one is key to helping you get out of debt fast (even with no money) and raising that credit score.
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