Bankruptcy & Foreclosures

Here’s one you have undoubtedly encountered regardless of your credit situation: “We can erase your bed credit today, simply call the toll free number below…” I hate to be the bearer of bad news, but there is no such thing as an erase your debt service. Avoid “credit repair” companies at all costs.

Realize however that there are legitimate nonprofit credit counseling services out there who provide a much-needed service to those in need. A typical counseling service will advise you in managing your money, offer solutions to your current financial problems, and develop a personalized plan to help you prevent future difficulties

The difference is that some organizations claim to offer credit-repair services; In other words for a fee they can repair or alter your credit history. In reality the only way to fix or repair a rough credit history is to repay current debt and to make all of your payments on time.

No company has the ability to simply erase data from an individual’s credit report. This practice would not only be unethical but it would be fraudulent (and illegal) as well. If in doubt about a credit counseling firm’s reputation, don’t hesitate to call the Better Business Bureau or your state’s Attorney General.

In addition, check with the National Foundation for Credit Counseling (NFCC) for legitimate service listings. They exist as a watch dog for credit counseling services so that potential consumers have a place to turn to when in doubt.

For more information on the NFCC, head over to: http://www.nfcc.org/

As a nearly constant user of the internet, I have stumbled upon a very helpful free service AOL offers called Bill Manager Plus. The product basically allows the user to receive secure E-Bills, set alerts (reminders) and fraud protection.

From AOL’s site:

Bill Manager Plus With Spending Alerts lets you:
· Get e-bills from over 4,400 supported billers & banks.
· Securely receive and pay bills using a single password — right from your e-mail inbox.
· Automatically add bill due dates to your calendar.
· Track monthly expenditures with easy to read charts.
· Avoid late fees with bill reminders.

So how is it better than Bill Pay? And what’s the “Plus” all about?
· No other bill pay service allows you to manage and pay your bills directly from your e-mail inbox.
· Other bill pay services don’t offer you Spending Alerts — designed to protect you from fraud.
· Credit card and banking alerts enable you to monitor suspicious activity and large transactions
· Cell phone minute alerts allow you to avoid monthly-minute overage fees from your cellular provider. You’ll always know when you’re dipping into that pricey talk time!

I for one spend a great deal of time “surfing the net” and find the alert feature very helpful. There are constantly new online bill payment services popping up each day and many of them seem to have very positive feedback by users. The key to finding one that’s right for you is to type the name of the service provider in a search engine (like Google) to see what others think of the service. It appears there is no shortage of opinionated customers out here in cyberspace willing to share their experiences. I’ve had a great deal of success working with AOL’s free product and would recommend looking into it if you could benefit from an easy to use boost in organization. For more details click here.

In borrowing money we typically chose from two specific types of loan: open-end and closed-end credit. Because it allows you to borrow up to an authorized limit on a continual basis, open-end credit is often referred to as a revolving credit or an open credit line. Credit cards are examples of a revolving credit line as are home equity loans.

The key to recognizing the immediate differences between the two are that revolving credit loans do not have a fixed number of payments. Installment credit (like an auto loan, mortgage, or student loan) typically include a payment book in which the balance of the loan is decreased in regular increments.

What about other types of loans such as a Payday Advance service? In a payday loan scenario, the lender is often literally a check-cashing firm that lends cash to a borrower for a fee. The borrower in-turn writes a check to the firm for the amount of cash they desire plus the fee charged for the service and the lender holds onto the check until the borrower’s next payday.

Mortgages are typically broken down into three primary payment categories:

Fixed rate mortgages- This is a situation in which the interest rate and the payment amount remain the same throughout the life of the loan.

Graduated payment mortgage- A mortgage with a fixed rate in which the payment amount is variable.

Adjustable rate mortgage- Both the rate and the payment amount are variable.

This is all important to the debt management process as understanding repayment procedure (including fees) is invaluable in determining whether you can afford to borrow money. The key when considering taking out any kind of loan is to weigh the pros and cons of the terms and conditions presented. Often times loan conditions that appear to be a bargain come with stipulations (such as shorter repayment terms).