Aging an Account

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Get Rid of Credit Card Debt
Sometimes, luxuries can seem like necessities. You may not need the fancy cable television, the nice car, the expensive clothes - but don't they seem so very important? Before you know it, you're in debt. Want to know how to get rid of credit card debt? You aren't alone - and you aren't as bad off in debt as you may think.

There are many ways to get rid of credit card debt, which can se... Read debt consolidation 1 article



Debt Consolidation Disadvantages
Rate of interests have gone down historically low since the last few years and a lot of family units have been enticed with the prospects to have a loan in order to facilitate their needs and wants.

Consequently a lot of people are at present becoming conscious that they have produced a nonviable debt condition and are on the lookout for alternatives to let them stand again on their own... Read debt consolidation 1 article



Aging an Account
The term aging an an account can be understood by remembering this: Your credit history can be reported for seven (7) years from the first time you missed a payment and never got caught up. In a previous article, we touched on the term "initial delinquency". Both go hand in hand when we discuss the term "AGING AN ACCOUNT".

Remember, the Federal Law is emphatic. Someone can report a delinquent account for seven years from the intial delinquency. Many times, an original creditior will turn over or assign an account to a third party collection agency. Because the collection agency received the account much later then when it was first opened, they will very often report a new date of opening. In this manner, they think that they can report the information for seven years from the date of which the account was first placed for collection. This is very confusing for the average person and has caused many unsuspecting consumers to fail when qualifying for a mortgage.

It gets really confusing when the average consumer notices three or four different collection companies with different account numbers, different opening dates and no one reporting the intial delinquency date. Remember, the delinquency date of the original account. No one can change that date. Later on we'll discuss the "Statute of Limitations" and how it pertains to consumer debt.

Remember, when a creditor "charges off" an account he is merely writing it off for tax purposes. THIS DOES NOT MEAN YOU DO NOT OWE THE DEBT. You still owe on this bill. Keep that in mind. How often have we heard the statement "write it off for taxes"? What this means is that the IRS allows a company to recover a portion of bad debt by lowering the tax liability on corporate profit.

Occasionally, a credit report will show a charge off and still report the account as having a past due balance on the date the report was generated. This has been construed as "deceptive collection activity". The rationale from the debtor (you) is "how can I be past due on a charged off account"? Quite often, a violation of Section 623(a)(5) of FCRA occurs when the original creditor fails to report the intial date of delinquency.

Next article we'll discuss just how to negotiate debts.

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Bad Credit Loans - The Income Factor Revealed

Since your credit report shows delinquencies, the lender will want to make sure you'll be able to repay the loan and that's when the income requirement becomes important. As with traditional lenders your credit score determine whether you are approved for a loan or not, the interest rate, loan amount, etc., your income will determine whether you are approved or declined for a bad credit loan and will contribute to establish all the bad credit loan terms too.

How Income Affects Approval

In order to get approved for a bad credit loan, your income has to let you afford the monthly payments without sacrifices. Moreover, after payment, you have to have sufficient money left for unexpected expenses. That's why the amount of the loan's monthly payments cannot exceed certain portion of your overall income.

Though these numbers are flexible, truth is that a small income will limit your ability to get finance with or without bad credit. Since bad credit loans are more expensive, you'll be able to get even smaller monthly payments with the consequent longer repayment programs and smaller amounts.

How Income Affects the Installment's Amount

The loan installment's amount cannot exceed 35% or 40% of your income without risking a loan decline. If your income is limited, you need to request longer repayment programs so as to reduce the amount of the monthly payments. This limitation is due to the fact that the lender wants to be sure you'll be able to afford the monthly payments.

Lenders consider that expenses added up (without the loan installments computed), usually eat up 50% of your income and logic rules that at least a 10% should be left for unexpected expenses that may rise. And if nothing unforeseen happens, that extra money should be added to a savings account.

Income Problems and Solutions

Having income problems will eventually reduce your ability to get approved for a loan. If you also have bad credit, chances are that you won't be able to get approved at all. However, there are a couple of things you can do in order to boost your chances of getting approved for the loan you seek.

First of all, you need to reduce your spending dramatically. You can call it war economy if you want but just cut any unnecessary expenses and save as much money as possible. Remember that a small income is even smaller if your expenses exceed what is expected for someone with that income level.

With the aid of a co-signer you'll be able to get approved since both incomes will be computed towards the loan. Thus, if both incomes added up meet the necessary requirements, then you'll get approved without hassles. Sometimes, lenders raise the income requirement a bit when two people apply for a loan. However, the difference never exceeds 20%. For example: If the income requirement for a loan is $1000 and you apply with a co-signer, the two incomes combined may have to reach $1200.




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Aging an Account
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