Benefits of Credit Counseling

October 12, 2013 by  
Filed under Debt & Credit Tips, Featured

With the world economy on the down low, more and more individuals are getting into debt situations that are financially damaging. Credit counseling services have become more necessary than usual. Sometimes counseling can help to reverse even the worst of debt problems.

 What is credit counseling?

 Although not all financial problems are as bad as to require some form of help, sometimes counseling can help to either avoid debt pitfalls or to get out of them. Credit counseling, sometimes referred to as debt counseling, is a process through which individuals are offered professional advice and education on how to manage debts.

 How will credit counseling help you?

 In general, credit counselors will liaise with the creditors to set up a Debt Management program (DMP) which will enable you to settle your debts quickly and easily. Specific benefits of credit counseling include;

    It will help you to repair credit. Defaulting in debt repayments will definitely have a negative effect on your credit thus hampering your borrowing power in the future. Credit counseling sets you on a path where you can pay off your debts and thus avoid hurting your credit. If your credit is already bad, you will be guided on how to set it right again.

    Credit counseling goes being financial help to help you cope with the stress that comes with financial difficulties.

    For those who have trouble with their personal finances, counseling can help you easily manage it thus avoiding poor financial decisions.

    Credit counseling helps you to achieve your dreams by properly managing your finances.

    Knowledge ~ this is perhaps the most important part of credit counseling. The knowledge gained lasts a lifetime.



Secured Loans

October 12, 2013 by  
Filed under Debt & Credit Free, Featured

Secured Loans

They are among the most common types of loans. In addition they are easy to obtain as long as the borrower has the required collateral. Generally, secured loans are considered to be a much better option as compared to unsecured ones mostly due to the friendlier loan conditions. There are however a few pitfalls that you should beware of.

Secured Loans – The Pitfalls

 You need to have enough collateral to obtain the loan. If you do not have something of value such as a house or car, then you will not be able to obtain a loan. This prevents many people from getting secured loans.

 You expose yourself to the risk of losing property in case of a default in repayment. Even if you have a well laid down repayment plan, unexpected things still happen and you may be unable to repay your loan. In such a situation you stand to lose your hard earned property.

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If you have poor credit, the lender may decline to give you the loan. In the event that you qualify for a secured loan even with the poor credit score, the interest rate is bound to be high due to the increased risk to the lender.

Secured loans also depend on your income. This means that inadequate income may disqualify you from getting the loan or getting less than the amount you anticipated.

Late repayments may attract higher interest rates or additional fees.

 How to Avoid These Pitfalls

 Before taking out a secured loan, have a well laid out repayment plan and consider all aspects before making the final decision. If things go wrong after you have already taken the loan, credit counseling may help. 



Building Good Solid Credit

October 6, 2013 by  
Filed under Debt & Credit Information, Featured

How to build good credit?

This is a common concern – not having strong credit means being deprived of many benefits. If your credit score is not satisfactory, the first effect may be for you to not get loans easily. Even if you are planning to shift to a new job, that may also be a problem because nowadays, most of the employers check if the potential employees they are considering have good credit. Even getting a house or apartment on rent can be a problem because land-lords may be reluctant to let their properties out to people who do not have satisfactory credit rating.

 There is no heavenly staircase that can take you to good credit rating. You must adopt the necessary steps for achieving it.

 * If bills like utility and phone bills are in a different name, you must get them changed in your name. You must pay them regularly for building good credit.

 * All the bills including credit-card bills must be paid on time. If you delay your payments or default on them, it may spoil your credit score. If you tend to forget bill payments, you can opt for setting up automatic payments.

 * If you do not have perfect credit, you can deposit a certain amount with a bank and request them to issue a credit card the credit-limit of which can be restricted to your deposit amount. Any credit-card-issuing bank may agree to this proposal. If you pay these credit-card bills on time, you can easily build your credit.

 * A good credit is always linked to your employment. If you stick to a job for a good length of time, you are considered credit-worthy.

 * Similarly, if you live in the same house or apartment for many years, that is also viewed favorably by the credit rating agencies.

 These steps may be the perfect answers on how to build good credit. Meanwhile, research and some perseverance will help you deal more personally regarding this concern.