Is good credit somehow bad?

In this crazy credit crunch, even having good credit can hurt you.  How, you ask?  Because the credit card companies aren’t just penalizing those who are making late payments or maxed out.  It’s just one more example of why consumers must always be looking out for themselves and making sure that they aren’t getting into trouble.  Read this article in Time magazine about how consumers with good credit are experiencing problems too.

http://www.time.com/time/magazine/article/0,9171,1904129,00.html

And if you have questions about credit cards or your credit card debt, the experts at First Rate Debt Solutions are here to help.

Is Debt Settlement Legal?

Debt settlement has been around for years but a lot of people really don’t know about it.  After hearing how the program works, the first question is usually, “can the debt settlement process/program really be legal?”  The answer is absolutely YES!  Debt settlement is a legal and effective solution used by thousands of Americans to help avoid bankruptcy.  The basic idea behind debt settlement is very simple: negotiate deals with credit card companies that are mutually beneficial for both parties.

If a consumer cannot pay their debts in full and is considering bankruptcy protection, there is a good chance that the creditor will not get any or very little payment.  With debt settlement, we negotiate with the credit card company for the consumer to pay a lump sum to satisfy the outstanding balance but usually only a small percentage of what the original balance was thereby benefiting the consumer as well.

The greatest advantage for the credit card company is that they avoid any future problems with collecting the debt, and any concession made on the creditor’s part is most obviously tax deductible.  If the consumer files for bankruptcy, the creditor is most likely out of luck so this is the perfect example of “something is better than nothing.”

So then why are so many skeptical of the program and its results?  The problem with debt settlement is not the legality of the practice, but the ethics of some who practice it.  Unfortunately, a number of unethical debt companies have been found to take advantage of consumers’ financial strife to boost business.

Some companies with no experience in the finance industry are just popping up over-night, taking money, making promises, but rarely delivering.  Those few “bad apples” make it harder for those of us that are operating ethically to gain the trust of the public.  The debt settlement industry is no different than any other and you need to do your research before you sign up.  We have been in the financial industry for years and we are committed to helping consumers find real solutions to the debt problems.

Debt Settlement has worked for thousands of Americans to help them get out of debt legally, honestly, ethically and most of all quickly.  If you think you might need help, one of our Debt Settlement consultants is here to answer any questions you have and provide a free, no obligation quote on what we can do for you.

Quick Facts about Credit Scores

Most Americans have a general idea of what their credit or FICO score is.  At the very least they know if it’s good, bad, or just so-so because at some point they’ve had to use that score to obtain some type of financing.  But there are some misconceptions about a credit score that can cause confusion.

The Fair Isaac Corporation (FICO) is who determines your credit score based on a formula that takes many different factors into account.   FICO scores are calculated from the credit data on your credit report.

Your credit score is not just simply, you have a credit, you pay on time and that automatically equals a good or high score.  It’s not that simple.  The actual formula that is used by the Fair Isaac Corporation is a secret but these are the five (5) main factors that affect your score.

1. Payment history (late, on time, etc.) – 35%
2. Amounts owed (especially in relation to the credit line) – 30%
3. Length of credit history (how long have you had credit) – 15%
4. New credit (how many new cards do you have) – 10%
5. Types of credit used (bank cards, department stores, etc.) – 10%

All of these can either negatively or positively impact credit score which can come to a surprise to someone who makes all their payments on time but didn’t realize that because they are maxed out on most of their cards and have opened several new accounts, their score is not as high as they thought.  Even things like other credit companies inquiring into your credit can lower your score.

Having a decent credit score (at least 620) is very important when you are going to apply for any type of major financing like a home loan or car loan.  The higher score translates directly into a more favorable interest rate.  Typically 720 and above will get you the best or most favorable rates available.  However, tough economic times can wreak havoc on your scores and your financial situation.  If this is the case, you may need to speak with a financial expert to re-evaluate your situation and make some changes that will help increase your credit in the long run.  The consultants at First Rate are credit experts and can help you determine what you need to do to maximize your credit score.

Changes are coming

A bill that would dramatically change the way credit card companies do business in the United States was approved by Congress this week and is on it’s way to the President for signature.

The bill says that credit card companies will now have to inform their card holders at least 45 days in advance before they raise interest rates or change any other terms and conditions.  Even more importantly, the new law will prohibit the credit card companies from raising the interest rates on existing debt unless the payment is at least 60 days late.

Another big change will force the credit card companies to tell their card-holders how long and how much it would take to pay off a card if they  only make the minimum monthly payment.

These changes will not take effect immediately but will ultimately help to protect consumers who have in many cases found themselves in debt far more than they can handle and feeling victimized by the credit card companies.

The credit card companies are fighting back saying that the changes will only increase the cost of credit to consumers.   But the changes really just put more information out that consumers need when deciding to use their credit cards.

Americans held nine hundred forty-six billion dollars in credit card debt at the end of March.  Many of those are having trouble making their payments each month due to rising interest rates and other circumstances.  If you are one of the millions of Americans struggling with credit card debt, First Rate Debt Solutions has programs that can save you thousands of dollars.

Credit and Debit Cards a Way of Life

According to recent statistics, there were 984 million bank-issued Visa and MasterCard credit card and debit card accounts in the United States in 2006.  If you add in American Express and Discover, that number jumps to 1.5 Billion cards in use which represents about 73.0 percent of U.S. families.

With these types of numbers, it’s no wonder that America is a nation in debt.  Credit cards have become a habit and millions of Americans are addicted. The total U.S. consumer revolving debt was $963.5 billion in December 2008 and about 98 percent of that debt was credit card debt.

These numbers can be staggering and so are the implications.  The average consumer has a total of 13 debt obligations. These include credit cards/unsecured debt (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.).  Of these 13 credit obligations, nine are likely to be credit cards.

Nearly one in every three consumer purchases in the United States is made with a payment card, including credit, debit and prepaid products.  Credit and debit cards provide a great convenience but when finances are tight, 59 percent of people surveyed said they would pay their credit card bills last.

About one in six families with credit card debt pays only the minimum amount due every month and 28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult in the past year.

Where all of this gets really scary is in the interest rates and fees and how quickly they add up.  Most credit cards have an interest rate of at least 12.5%, many have annual fees, and almost all have late and over the limit fees.  If you can’t pay your bill in full and on-time, these fees can substantially alter the cost of whatever you purchased on the card.  Since 55% of all consumers keep a balance on their card, that’s a lot of dough.

If you are one of the many Americans that is finding it harder and hard to keep up with your credit card debt, there are solutions.  Don’t let mounting debt destroy your financial future.   First Rate Debt Solutions has answers and we can help.

(data source: creditcards.com)

Finally, Some Good News

The Federal Reserve and Treasury Department announced on Tuesday a plan to pump $800 billion dollars into the sagging economy.  The intent is to jump start lending by the nation’s banks for mortgages and consumer debt.  By putting that money into the hands of the holders of securities backed by consumer and mortgage loans, the government hopes that more money will flow to consumers than has in previous bailout plans.   The Federal Reserve, the nations central bank, announced it will purchase up to $500 billion in mortgage backed securities.  This is being done to reduce their costs and increase the availability of credit for home purchases which in turn should foster improvements in all aspects of the financial market.

The first signs of relief were seen immediately as home loan interest rates dropped dramatically.  This could be the turning point that we’ve all been waiting for.  Now is the time to get all of your debt under control and be ready with an improved financial position.

Here at First Rate, we can help you settle your debt, provide a loan modification for your home or a loan.  Give one of our financial experts a call today and see what what we can do for you.  1-877-332-8730.

Resolutions

This is the time of year most people make their new year’s resolutions.  Have you made your and if so, how are you doing so far?  Are you on track or already giving up?

The top resolutions each year are to lose weight, exercise more, save more money and/or spend less money, get out of debt, get a new job (or in this economy, get a job), or spend more time with family.

Many never actually accomplish their goal for a variety of reasons whether it was unrealistic, they didn’t take it seriously, or they just needed help.  If you make too many or too difficult of a resolution, you are setting yourself up for failure.

If on the other hand, you make a resolution, take it seriously and get help, you can be successful.

If your goal this year is to get out of debt, then we can help.  With the continued stress in the economy, more and more Americans are finding themselves deeply in debt for the first time in their lives.  And most are un-prepared or unaware of their options.  That’s why an experienced and qualified debt consultant can make all the difference in the world if you are serious about getting out of debt and staying out.

Visit our website for important information and recent settlements to learn more about how you can make 2009 the year to become debt free!

New Year’s Resolutions

This is the time of year that everyone tries to make a fresh start.  Renew your goals and make your resolutions.  What will 2009 hold for you?   Do you want to lose weight, quit smoking, exercise more, or maybe get out of debt?

Last year, TransUnion’s TrueCredit.com commissioned GfK Roper Public Affairs & Media to assess Americans’ thoughts about their finances at the turn of the New Year.  The survey found that in 2007, one if four (25%) of all Americans missed making one or more on-time bill payments, with the bulk of those delinquencies occurring on Utilities (12%), Credit Cards (12%) and Medical Services (11%).  Meanwhile, only 17 percent chose paying down debt as their top resolution for 2008, down notably from 22 percent in the previous year’s survey.

Will all that change for 2009 or will it get even worse?  Americans don’t want to be in debt but many don’t have a choice.  With the economy in a slump and unemployment on the rise, millions of Americans have seen their debt grow so much over the last year that paying it off seems “impossible”.  As the economy continues to struggle and people are forced to pay more for food, gas, and rent, folks are finding it harder and harder to make ends meet.  That’s when they turn to their credit cards to start to bridge the gap between expenses and income.  This only makes the situation worse as the minimum payments increase with higher balances making it impossible to do more than make the minimum payments each month.

You can break this cycle and get your financial house in order and now is the time!  Debt settlement or debt negotiation is the answer for those who are struggling with debt and see no way out.  If 2009 is your year to get our of debt, then First Rate Debt Solutions is here to help.

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Program Success

Every day we are saving our clients thousands of dollars.  Just look at the most recent settlements for one of our local clients in Orange County.  They will be debt free in less than 6 months.  We can help you save this much money too!

This client had an original balance of $3,488.33 and we settled the account for $600!  Yes, that’s 17% of what was originally owed.

Another account had a balance of $10,743.65 and we settled that account for $1,700.00.  That’s 15.8% of the original balance.

The third account had a balance due of $5,523.37.  The settlement we obtained was for $900 which is 16.2% of the original balance.

These settlements have saved this one client $16,555.35!!!  That’s a whole lot of dough in addition to the fact that he is no longer sinking farther into debt.

If you are struggling with credit card debt and would like to be debt free, give one of our experts a call and see how our program and can help you too!  877-332-8730

see the actual settlements here:

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-a.pdf

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-b.pdf

http://www.firstratedebtsolutions.com/debt-settlement-samples/debt-settlement-c.pdf