Debt consolidation and Credit Repair - All is up to you

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Unsecured Consolidation Loans - A Dependable Option
Are you stuck in debts that have outgrown your financial capacity? Then it is time for consolidation of loans. If you are not likely to offer security for consolidation loans then your search should start with unsecured consolidation loans. Unsecured consolidation loans help you overcome outstanding debts when you do not have collateral to place.

Unsecured consolidation loans are usuall... Read debt consolidation article



Debt settlement and income taxes - Your questions answered
Debt settlement has become a popular approach to resolving problem debts without having to file bankruptcy. With this approach, creditors agree to accept a portion of what you owe (usually around 50% or less) to settle the account, and the remaining balance is forgiven. This technique will certainly continue to grow in popularity now that the new bankruptcy law makes it tougher to fully discharge ... Read debt consolidation article



Debt consolidation and Credit Repair - All is up to you
Log onto to a search engine such as google.com and type in the term credit repair. It's likely that Google will return more than 25 pages of listings, many of which will be companies claiming they can "erase bad credit," "create a new credit identity - legally," " credit problems - no problem." "quick credit repair," and on and on.

Here's the good and bad news of credit repair, according to the U.S. Government - nobody but you can repair your credit.

If you do respond to one of these credit repair offers, here's what to look for to know it's probably a scam:

- The company wants you to pay for credit repair services before they provide any services.

- The company does not tell you what your legal rights are and what you can do for yourself.

- The company recommends that you do not contact a credit reporting company directly.

- The company suggests you create a new credit "identity" and then a new credit report by applying for an Employer Identification Card to use instead of your Social Security number.

- The company advises you to dispute all information in your credit report or take an action that seems illegal - such as creating a new credit identity.

The truth is that no one can legally remove accurate and timely negative information from your credit report.

The law allows you to ask for an investigation of information in your file that you believe is wrong or incomplete. There is no charge for this. Everything a credit clinic can do for you legally, you can do for yourself at little or no cost.

So, what can you do?

Let's suppose you apply for and are denied credit, insurance or employment. The most likely reason for this is that one or more companies provided negative information about you. This could be a credit card company or mortgage company reporting that you missed payments or that some of your payments were 60 or more days late. Or it could be a report that you wrote checks that were returned for insufficient funds.

If you believe the information was inaccurate, you should first request a copy of your credit report. You need to ask for this report within 60 days of when you were denied credit or turned down for insurance or a job. This report will be free.

If you find negative items on your credit report that you believe are mistakes or outdated, you can dispute them, also at no cost. Both the reporting company (Equifax, Experian or TransUnion) and the company that provided the negative information about you are responsible for correcting any information you can prove was inaccurate or incomplete.

To take advantage of this, you need to contact the company with the negative information on your credit report, and the company that provided the information to that company. For example, if the credit report with the negative information came from TransUnion and the company providing that information was your mortgage holder, you need to contact both TransUnion and the mortgage company.

Start by telling the consumer reporting company (TransUnion, Experian or Equifax) in writing, what information you think is wrong or incomplete. You should include copies (not originals) of any documents that support your position. Make sure you provide your complete name and address, and that you identify each item in the credit report you dispute. State the facts and explain why you disagree with the information. Be sure to request that the information is removed or corrected.

The consumer reporting company must investigate the items you questioned - usually within 30 days - unless they consider your dispute frivolous. They must also send all the your information to the company whose information you dispute. In turn, this company must investigate your claim and report the results back to the consumer reporting company.

If the information provider finds the disputed information is, in fact, wrong, it must notify all three nationwide consumer-reporting companies so they can correct the information in your file.

This is how you repair your credit if the "bad" items in your credit report were inaccurate.

On the other hand, if the negative information was correct, the only sure cure is time. A consumer reporting company can report most accurate information for seven years, and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

Here's the better news. Just because you have a poor credit report doesn't mean you won't be able to get credit. Creditors set their own credit-granting standards, and not all of them will look at your credit history the same way. Some may look only at the more recent years when they evaluate you for credit, and they may grant credit if you bill-paying history has improved.

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Debt Problems - Be optimistic

With £1.3 trillion pounds worth of debt in the UK, Scotland's Citizens Advice Bureau has welcomed a new Bill to regulate lenders and protect borrowers from creating un-repayable levels of personal debt.

Chief executive Kaliani Lyle said: "For years, Citizens Advice Bureaux have been dealing with case after case of ordinary people who have been enticed into unsustainable debt.

"The existing legislation - the 1974 Consumer Credit Act - is simply too antiquated to deal with the explosion in aggressively marketed credit that has taken place over the past decade or so.

The Consumer Credit Act is set up to outlaw extortionate interest rates, however it has proved to be ineffective as it doesn't actually define what is regarded as extortionate.

This coincides with an investigation being carried out by banking watchdogs, into suspected mis-selling of personal loans and credit cards at bank branch levels. Following on from the BBC's Real Story programme which revealed banks are offering large staff bonuses to encourage sales of expensive loans, credit cards and other financial products. Staff at Lloyds TSB were shown to have encouraged customers to accept sums of money they could not afford to repay.

"Which?" said it believed it was time the industry had a proper debate over sales incentive structures.

The BBC also criticised the expensive cost of the bank's payment protection insurance and how credit cards were pushed onto customers.

Graeme Millar, of the Scottish Consumer Council, said: "Consumers themselves need to act responsibly and ensure they are not asking for money they cannot afford to repay."

Tougher codes of practice imposing stricter standards on the way products are sold, and the use of financial information qualified financial advisers and from comparison web sites like Moneynet can help to gain consumers the best deals, and reduce the risks of mis-selling.

Independent financial adviser, Alan Steele commented, "Debt has always been a problem for a minority of people. One of the current problems is the willingness of bank managers to hand out loans and credit cards, which means this minority has increased, but the majority are coping with their debt."

It remains to be seen whether the nation's optimistic mood, recently reflected in a Mori survey carried out for the Prudential, in its ability to cope with levels of personal debt is long or short term. The report showed consumers are still failing to save, with one in five people saying they had no plans to increase the amount they put away.

Jackie Ronson, of the Prudential, said that many people are viewing their disposable income as decreasing, and yet they are happy to maintain their current level of debt, "add to that the continued concern about pensions in the UK, and we are looking at people who are likely to seriously struggle in retirement."

Additional Resources
The Scotsman
BBC

Richard works in Edinburgh for a media company, occasionally writing for the personal finance blog Cashzilla, and drinking too much coffee.


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Debt consolidation and Credit Repair - All is up to you
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