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Specialty Reports: What consumer need to know about the consumer reporting agency

Most consumers are familiar with 3 credit reporting agencies – Equifax, Experian and TransUnion. Have you ever heard about specialty consumer report? Your next probable question would be what is speciality credit report? How nationwide consumer reporting agency affects you? In most cases, consumer care about the facts after they disqualify for jobs,insurance policies, or an apartment rental. It is very unfortunate though. This article is going to reveal some useful information related to your credit reports.

What is a Specialty Consumer Reporting Agency?

According to FCRA, companies that are compose and maintain consumer’s files on a nationwide basis are called consumer reporting agency. Specialty consumer reports come under FCRA Act. Specialty consumer reporting agencies are not there to maintain your general credit card, consumer’s finance or mortgage related files. The reports give a free annual disclosure of the consumer’s file.

Types of Specialty Reports

Specialty Consumer Reporting Agency will provide some specific types of information about consumers nationwide. Specialty reports mainly focus on some specific types of records such as check-writing history, medical payment records, residential or tenant history, insurance claims, employment history.

What kind of information is there on speciality report?

Specialty consumer reporting agencies are working quite similarly as credit bureaus. Nationwide specialty consumer reporting agencies (NSCRAs) will keep the following information using wide sources such as:

  • Checking Account use – Information about fraudulent use of an account, closed bank accounts due to no funds, bounced checks for last 5 to 7 years, consumer’s credit history.
    Insurance related claims – Past 3 years to 7 year’s information of auto and homeowners insurance claim.
  • Income and employment information – Information on consumer’s marital status, public or nonpublic records, criminal or civil cases.
  • Rental information – Information related to consumer’s payment record, evictions, other information collected from past landlords. Information related to home ownership.
  • Personal health care related information – Any risky activities or participation such as skydiving , driving records, medical details indicated on your own insurance application coverage, test results from medical underwriting exams.
  • Your medical information ( prescription drug history) – Information about physician visits, medicines used over the past five years, medicine dosages.

The specialty reporting agency provides report to insurance companies, employers, and landlords depending on these information. FCRA imposes some responsibilities on the speciality reporting agencies like credit reporting agencies. Moreover, like credit bureaus, specialty reporting agencies have no right to make decision related to (giving a job, renting house, writing an insurance policy). The landlord, employer or insurance company will decide on this matter.

What are your rights as a consumer?

The Fair and Accurate Credit Transactions Act (FACTA) and The Federal Fair Credit Reporting Act (FCRA) supervise Specialty Consumer Reporting Agency and allocate some rights for consumers.

  1. Consumer have the right to dispute a biased and inappropriate information. The reporting agency should finish up all the investigation related to consumer’s dispute subject within 30 days.
  2. The reporting agency should send the result of the dispute subject to the concerned consumer/person after making certain changes. If the information is seen incorrect, it should removed or corrected by the agency.
  3. Similarly, if the information is seen correct, the report should remain unchanged. In that case consumer should write a short statement. Consumer have another option as he/she can contact concerned company or person (source) directly regarding the matter.
  4. Unemployed consumers who are planning to enter in their job within 60 days or incase of receiving public benefits have right to get free report in every 12 months. If they demand to get a copy of their credit report after that duration, then they have to pay a small fee of around $10.
  5. Consumer have the right to get free report from consumer reporting agency. Equifax, Experian and TransUnion are also included in the list and bound to give you the report at a time in every 12 month as per the request.
  6. Creditors, insurers, employers, banks, etc. may check you report before giving you a credit card, insurance policy, job and mortgage. They may refuse to give you the facilities if they find any mess in the report. In that case, you have the right to get a free annual report when someone takes negative action in respect of your application on basis of your credit history. But before doing so, you should specify your name to get a copy to the free report. Moreover, the company or the concerned person should send you letter mentioning the “source of the report” and “notice of adverse action”. Consumer should request his/her free report within 60 days after receiving the notice letter.

To do list:

Below are some guidelines offered by The Privacy Rights Clearinghouse for consumers who want to check their reports.

  1. Consumers can check his/her speciality report any time when they want to verify the information.
  2. It is advisable that, verify the report before knows that their credit report might be used.
  3. Make sure you have much time to find out the report and take action such as making correction, giving explanation.
  4. Consumer should order all available credit reports (regular) incase of identity theft.
  5. Consumer should order their tenant history report before planning for a rental apartment.
  6. Consumer should order their MIB report if they are applying for long-term care, fatal illness,disability insurance, health care.
  7. Consumer should request companies to share information (including name and contact information) when employer wants to check their credit report.
  8. Consumer should order their ChexSystems report if they want to open a new account or after a fraudulent use of their account.
  9. Consumer should order their Comprehensive Loss Underwriting Exchange (CLUE) or A-PLUS claims reports if they are going to obtain automobile insurance after verification of proper past claims.

Name of the major speciality consumer reporting agencies

Below are some big speciality reporting agencies for consumers assistance. These mentioned agencies are governed by FCRA.

Insurance claims history

  • A-PLUS
  • CLUE report

Checking account history

  • TeleCheck
  • ChexSystems

Tenant history

  • RentBureau
  • Tenant Data

Medical

  • Medical Information Bureau
  • IntelliScript

Prescription history

  • Ingenix (MedPoint report)

Employment history/ Screening

  • The National Association of Professional Background Screeners
  • LexisNexis Screening Solutions

Sometimes, laws can vary from one state to another. States have own laws regarding consumer report. Contact your local consumer protection agency to get more information. Remember, consumers have full rights to accuse the concerned reporting agency who provides incorrect information and delay to correct the flaws. Learn more from FTC.gov on topics like (a) how to file a complaint? (b) how to improve credit? (c) how to avoid fraud? State law may offer some more rights to consumer. Try to stay connected with your local consumer protection agency for more details.Information are available at state attorney general’s office too for consumer’s help.

By carol on July 23rd, 2014

Cartoon characters are not safe from identity theft – Mickey Mouse the first victim in Washington !

An unbelievable news has been covered by kirotv.com (KIRO 7) on July 10. Mickey Mouse is a victim of identity theft in Washington ! This is certainly a most heartbreaking news for all mickey lovers. Bellevue police identified hundreds of fake ID cards, driver’s licenses, fake social security, fake credit cards, forged checks of an identity theft operation. Police noticed a fake ID with a photo of Mickey mouse and personal information amongst a dozen of driver’s licenses.
The driver’s license belonging to Mickey Mouse (spelled Mick E Mouse) says, he was born in 1928, and lives in Disneyland Drive in Anaheim. His height is 5 feet 2 inches and weigh 110 pounds. Above all he is also an organ donor.

The police department said, that a neighbor at the Hidden Creek Condominiums in 800 block of 126th place Northeast contacted the construction company when he/she noticed the stolen signs on 3rd July. And after the incident the construction company contacted the Bellevue cops.

After an investigation on this matter the police arrested three frauders with the fake IDs. The fourth suspect was arrested too and he admitted about the stealing the signs.

According to the Bellevues Police the recovered items are as follows.

  1. 67 Fake credit cards,
  2. 28 Fake Govt. ID cards,
  3. 38 False Washington IDs
  4. 7 Phony social security cards
  5. 100 Forged checks

The police informed the victims of this fraud case. This incident is an alarming event for all of us. This type of identity theft can damage our financial security. Credit card companies alerts their consumers about the security of their accounts. Consumer should check their credit record and score very carefully and in regular basis.

How to quickly identify fraudulent use of your account

  • An unexpected changes (high charge) on your credit cards.
  • Sudden fall and rise in your credit scores.

According to the Lt. Lisa Patricelli. “This is a good reminder for people to consider buying locked mailboxes, and to never leave valuables in our vehicles. “It appears that most of the victims in this case had their identities stolen after their mail was stolen or their cars were broken into by these suspects” . Not even a cartoon character are spared from identity theft so it is high time to take the matter in count.

By carol on July 17th, 2014

What if you can prevent card fraud with simply one touch on your mobile

Are your confident enough about the security of your credit cards? Do you think that your cards are safe from hackers and identity thieves because they are in your wallet? They can be still used to shop and empty your account because your debit and credit cards are always on. A hacker can easily steal your identity. Once you become a victim of identity theft or credit card fraud, your credit score can be damaged. It will take a long time to fix your credit after facing a fraud.

You often think if you can turn off and shut down access your account when you don’t want it for certain time. Recently, new technology has introduced a mobile application where you can find your solution to this serious problem.

How technology will help you to prevent fraud

Ondot system, a software company based in San Jose, Ca, has introduced a mobile application that gives you “turn off” and “turn on” facility on your smartphone. You can lock the card when you don’t want to use it with the help of “cardcontrol app”. It can be easily used when you want to purchase and withdraw cash from ATM . It works with a single touch on your mobile and instantly activates when you want to use the card.

Vaduvur Bharghavan, Ondot’s CEO and founder said “We created a way to let people use their mobile phone as a remote control for their existing credit and debit cards”. The owner of a card can put a limit on his/her cards. Cardcontrol app is not just a “off” and “on” option. With this app, a cardholder can customize the usage of their cards. This limit may vary with the actual limit on the card issued by the credit card company. An owner also gets additional choices in this app. As for example, you can give the card out to your child confidently as well as you can set a financial goal for a certain time by using this app.

The rollout begins in 2014

Cardcontrol app is not public. At present, Ondot has not opened its product to individual customers. They are offering the product to their client. Ondot will sell the application to financial institution. After that the concerned institution will offer the app as a feature to their customers(cardholders). Ondot has announced an agreement to begin to roll out this application in 2014 during summer. The company has an agreement with BECU (Boeing Engineers Credit Union), based in the state of Washington, the 4th largest credit union.

Features Available

  1. User can block a specific type of transaction (online purchase, ATM withdrawal, cash transfer).
  2. User can limit the amount (dollar) of a transaction.
  3. User can stop a specific type of merchant (retail, gas or lodgings) and inform that his/her card couldn’t be used there.
  4. User can mention a region map (city, country, state) and limit the geographic area, where he wants the card to be active. The user should go for “active around me” option to relate the area on his/her phone with the merchants. The location and the merchants’ address should match. Otherwise the transaction will not be authorized.

Pros of this application

  • This application is also available for your secondary card. It will give you the same control as a primary user of another card.
  • One can (particularly helpful to parents and businessman) put a limit on his card (where can be used, how much can be used) . This will help the user to ensure about the purchase location and time . The user can also ensure that his children will not spend much.
  • You can prevent fraud and manage your own spending needs.
  • You can have a control over impulsive buying.
  • You can turn off the card when you discover your card has been stolen or lost. This will help you to minimize the chances of losing data or money.
  • You are able to control over your cards through your cell phone. It doesnt matter if you left a card at your home.
  • This application is also worthy for banks as they can reduce fraud and get more customer to sell credit cards.

Gerri Detweiler, director of consumer education at Credit.com. said “I think this is a brilliant way for people to help protect themselves against card fraud”. Even though the customer isn’t typically responsible for fraudulent charges, it’s a huge hassle when you’re dealing with fraud.”

Cons of this application

  • This application is accessible on smart phone only.
  • No options are there when your cards are locked and the battery of your phone is extremely low.

Apart from this, mobile devices are functioning as a remote control in our daily lives. Now it has started controlling our account as well as payment cards! Tom Tyson, BECU’s digital channel manager stated that, “People know how they use their card and how they want it to be managed, this gives them a way to take action without contacting us.” He said that, this application is a simple solution to a big problem. This new technology will help people to manage their cards easily without any worry about the chances of fraud.

By carol on July 14th, 2014

5 C’s of credit repair process

Need to pull up your credit score? Worried about how to increase it and be eligible for loans at low interest rate? Check out the 5 C’s of credit repair process in this infographic.

5 C's of credit repair
By carol on July 8th, 2014

Credit report facts and myths – A synopsis on what matters most in your life


Credit report is not a trivial thing. It is actually a reflection of how much you’re creditworthy. In short, your credit report will determine how much you are eligible for renting a home, getting a job, home loans, student loans, credit cards. Credit report is all about information of your credit history (debts,loans,personal information). Most importantly it is an overview of your every financial transaction.

What kind of information is there on credit report?

Credit report format will depend on credit bureaus or credit reporting agencies. But basic categories are same.

  • Information of personal identification: Name, date of birth, social security number are needed for identification.
  • Past credit report inquiries: You should allow your lender to ask for documents of your credit report at the time of applying for loans. These inquiries are compiled in your credit report.
  • Public records: Liens, bankruptcies, overdue child support are included as public record on your credit report.
  • Accounts details: Credit report contains all your account details (type of account, date, credit limit, amount of loan, payment history, balance).

2 Fact of credit reports that matters


Credit report play a leading role in your life.The three credit reporting agencies (Equifax, TransUnion and Experian) maintain the details of your personal finance. Credit card companies, lenders, landlords, mortgage brokers, bank can get your credit report from credit bureau whenever they need.They buy your credit report to decide if you are eligible for a loan, a service at a particular rate.
  1. To get a job: Your credit report will be checked  by employers when making job decisions. They will consider you as a responsible and potential employee after checking your credit report. Incase, your credit report is bad, and you make any financial mistake or you don’t pay the bills regularly, they may not offer you the job.
  2. To obtain a loan: Lenders will check your credit report before giving you loan. They will check the total amount of credit you have and you used on specific types of accounts (credit cards, auto loans, mortgage). Try to owe less money because lender will check if you’re able to pay back the money .Try to maintain your credit responsibly for a good credit score.

How bad credit affect your personal life

You will face many hurdles if you have a bad credit history. If  you’ll not pay all the due bills or rebuild your credit, you’ll never reach your goal.

  • Risk of an expensive service: You may face expensive offers to get services (cell phone, electric). The service provider can give you pressure for enrolling your name on monthly basis contract,  whereas if you have good credit, you can go for yearly basis contract.
  • Chances of loan problems: If you apply for a car loan with bad credit history, you’ll be charged high interest rates. Moreover, it’ll be impossible to obtain a business loan with bad credit.
  • Rental problems: You should pay several month’s rent in advance as high security deposit at the time of renting a house with bad credit history.

4 Items that are not included in credit report:

A credit report will not contain any information about your

  1. Savings account.
  2. Political affiliation.
  3. Medical history.
  4. Criminal records.

6 Myths and facts regarding credit report

Myth 1# The credit item will be removed after paying off the delinquent loan

Facts: Some negative records (bankruptcy, collection accounts,late payments) will stay on your credit reports for 7 years to 10 years for some bankruptcies. The credit item will be marked and updated as paid in report after paying off delinquent loan.

Myth 2# Bad credit does not affect a candidate in job search.

Facts: An employer has the right to check a candidate’s credit report at the time of hiring and promoting according to the Federal Law.

Myth 3# It is harmful to check your own credit report.

Facts: Credit score will not be affected if a consumer access his/her own credit report.

Myth 4# Credit bureaus are controlled and monitored by the Government

Facts: Credit bureaus are not controlled by the Government. But the agency must follow the laws.

Myth 5# Credit is main reason to get into a financial trouble.

Facts: Spending too much is the main reason to get into a financial mess. Set a proper budget and maintain your credit wisely to get a secure financial life.

Myth 6# Education is the key to maintain a good credit score.

Facts: Credit report contains only debt related information, not your educational qualification. Credit card payment history, loans, foreclosure, bankruptcy, etc. are included in credit reports. On the other hand, socks, bonds, investment will not be in your credit report.

By carol on July 7th, 2014

10 Startling facts about credit card scams and how to avoid them in 2014

Facts about credit card scams

In the past 5 years, nearly 41% of US people faced credit card scams and 50% consumers were involved in risky behavior. Some people discarded papers containing vital banking information, whereas others were found writing down their credit card PIN numbers. As per a recent study, these people have greater chances of getting victimized by credit card scammers.

As per the reports of ACI Worldwide and Aite Group . The top 3 countries with highest credit card fraud rate are – (a) United Arab Emirates, (b) China (c) United States and India.

Amongst the 4 countries, US is the last one to adopt microchip technology for credit card data storage. It has set a goal to replace magnetic stripe with microchip and migrate to the new system within October 2015.

Consumers are frustrated with the ever increasing identity-thefts, credit card frauds and data breaches. Their risky behaviors are partially blamed for that. As per a recent study, 50% of consumers who engaged in risky behaviors were victims of credit card fraud.

Consumers with risky behaviors are not the only ones who face credit card frauds. As per the study, 38% of consumers were duped by imposters even after handling credit cards responsibly.

7 Steps you can take to protect yourself against credit card fraud

Here are some steps you can take to lessen the chances of being a victim of credit card fraud.

1. Check the security of website while buying something online.

Before you buy something online, make sure you check the security of the website. Lots of websites don’t have good internal control. Give your credit card number to a merchant who is credible.

2. Keep your smartphone locked when you’re busy in some other work.

You’re not using your smartphone 24*7. Keep your smartphone locked since it contains your vital information. Nearly 11% of US people keep smartphones unlocked and are vulnerable to identity-theft risks.

3. Don’t keep your credit card in your wallet while traveling.

Most people have the habit of keeping credit cards in their wallet. This is risky since wallets can be tempered or stolen at any moment. Carry your credit cards in a business card holder. If you lose your wallet by any chance, you would at least save yourself from a severe financial damage.

Don’t carry too many credit cards. Save the phone numbers of credit card companies so that you can contact them when your cards are stolen.

4. Never reveal your bank account details in emails or through phone.

Around 5% of the US people reveal vital bank information over phone and emails. This figure is only 2% less than that of Brazil. Avoid giving your bank account information over phone as the chances of getting scammed is very high.

Avoid giving your credit card number over phone unless you made the call. The financial institution will not ask your credit card number since they already have it.

5. Don’t put your signature on a blank receipt as it is too risky.

No matter how much you love a person, don’t put your signature on a blank paper. It would be too risky. Your loved one can write anything and transfer all your assets into his/her name. In case of a blank receipt, make sure you draw a line above the total amount.

6. Break your old credit cards properly after getting new ones.

Cut up your earlier cards through the magnetic strip and the numbers when you activate your new ones. Make sure you have damaged your old credit cards completely before throwing them into trash.

7. Scan the transactions you made and didn’t make carefully.

Once you receive credit card statements, check out the transactions you made and didn’t make. The faster you discover the transactions you didn’t make, the sooner you can save yourself from a big loss. Contact the Account Manager of your credit card company and investigate the matter.

10 Startling facts about credit card fraud and identity-theft

  1. Thief can steal your identity from your non financial information shared in social networks.
  2. Thief can steal information from only a single piece of information about you.
  3. Your credit card information can be stolen from an ATM with odd look.
  4. Tourists are the easiest victims of identity thieves.
  5. It takes around 21 hours to resolve credit card fraud issues
  6. There were 13.1 million cases of identity-thefts in 2013
  7. Data breaches is one of main reasons behind identity-thefts
  8. Scammers are more tech-savvy than police.
  9. New account frauds are spreading like wildfire.
  10. It is getting touch to spot credit card scams.

Final impressions

Stats are scary. Who knows, scammers may fall in love with you anytime. You can be their target without having any knowledge about it. What you need to do is be pro-active and use credit monitoring services to get data breach notification. Once you receive such notification, take prompt action to get quick results.

By carol on July 3rd, 2014

Avoid bulging mailbox with unwanted credit card offers – How can you handle the irritation?

You often find your inbox completely filled with annoying junk mails regarding credit card offers. You know, that it wastes your valuable time and paper and resources. But do you know that it can steal your personal identity too? Yes! this is really scary, that these offers can be accepted and used by your name without your permission!

Do not rely on spam filter to stop receiving those risky mails. Have you ever heard about the process called “opting out” to stop receiving such annoying credit card offers in mail?

Queries related to the term”opting out”

I know, you’re thinking about the probable questions about the “opting out”

  1. Why “opting out” is important for me?
  2. I don’t know how to go for it.
  3. I am not sure about its effect to my credit score.

Let me answer all your queries first.

Reduce the prescreened credit card offers through Optoutprescreen.com

It can stop selling your financial data to the marketers (payment history, Social Security number, address). On the other hand, you can save 100 million trees per year through this option. Thus, you can save our Mother Earth!

“Opting out’ is an easy process. You can do it online and it takes just 5 minutes. There is a website called Optoutprescreen.com approved by the Federal Trade Commission. This website will help you to get rid of junk mails.The four major credit reporting agencies ( Equifax, Experian, TransUnion and Innovis) provide the website Optoutprescreen.com to help consumers to opt out. There is no requirement of personal data or social security number. You need to fill out the form with your first name, last name and current address. The site is fully legitimate so, you don’t need to worry.

Lastly, “opting out” will never create any bad  effect on your credit score. It has no impact on applying or approving for credit cards.

Permanent Opt out : You can go for the permanent opt out at the time of filling out the form online. Fill out the form first and keep a print out of the form with your signature . After that , you should mail the document saying all your preference .

Opt out for 5 years : Simply go for the 5 years opt out option while filling out the form online. Your name will  removed from the mail list . It takes 5 business days to start. Be happy as you’re now getting fewer mails. Sometimes. your name will appear on older lists so, have patient. Within a few months you won’t get such mails.

Profit of opting out process

  • You can stop getting unsolicited spam mails in your inbox.
  • This website will help you to stop receiving prescreened credit cards offers by just filling out a form and by a click.
  • You can protect yourself against identity theft.
  • This is the only service which works with 4 consumer credit reporting companies( Equifax, Experian, TransUnion and Innovis)

Optoutprescreen.com is one of most easiest way to reduce junk mails related to credit card offers .

Direct Marketing Association

Moreover, there a some more options for you. Few companies are there who are ready to help you out. But they are paid. You need to pay a certain amount of money to register your name for the service. Direct Marketing Association (DMA) is one of them. DMA Email Preference will work for three years. You can opt out of irrelevant mails by registering into their website. After the registration, it will take 99 days to start the process. It charges $1to get the service.

There are many paid options available if you think those options are not working . It is said that most of American are worried about the junk mail in their inbox. They get 41 pounds of spam mail per year. Tonic Mailstoper, 41pounds.org provide paid services to reduce spam mail. But remember these service has some boundaries too. They won’t stop junk mails if your personal data (phone number, address) is leaked by any case. Therefore, it won’t work for all catalogs or phone books. Then you should contact the merchant to get help.

By carol on June 26th, 2014

Eliminate credit card debt and make life easier and healthy

Being overwhelmed with debt is not good. In the present economic crisis, people should establish their life with financial security. The first thing to do in order to achieve the same is by making yourself free from credit card debt.

Tips to eliminate credit card debt

If you’re eagerly waiting to get rid of credit card debt, then follow the below mentioned tips and keep your credit card balances under control:

  1. Arrange your credit card debts: If you have more than 1 credit card, then enumerate all the details of the cards such as their balance, rate of interest and minimum monthly payments. Try to pay the maximum on the highest interest credit card and then make the remaining payments on the other cards. After the highest interest credit cards are paid off, do the same for the remaining cards. In this way, very soon you’ll be able to get out of this vicious cycle of credit card debts.
  2. Prepare a budget: Make a list of your monthly income and expenses along with your credit card payments. Calculate the monthly equivalent of your annual expenses like taxes and insurance by dividing it by 12 and add it to the list of monthly expenses. Note down the further expenses you do like shopping, eating out and entertainment. Double check whether you can reduce on any of your discretionary spending, so that you can pay some additional amount on your card balances.
  3. Keep the credit card away from your wallet: As the saying goes, prevention is better than cure, so refrain from using your credit card while making any purchase. Always use cash for any transaction, so that you’ll give a second thought before actually buying the item. If you want to keep a credit card as a backup for emergency, then store it under a pile of important papers. So that you’ll not be tempted to use it frequently but only in case of a dire situation for the same.
  4. Use only one credit card: If you have multiple credit cards, then choose the card which is most beneficial for your needs. For example, the card which gives you maximum reward points or the card which has minimum interest. Then transfer the balances from all other cards to the card of your choice. Now use only this card and try to be clear off any debts.
  5. Contact creditors to lower interest rates through negotiation: At present, the average interest rate of credit cards is above 14 percent. Few credit card companies charge more than 20 percent for the card. Usually, the interest rate on the card increases if you don’t make your full payments each month. If you are not able to establish your credit in good standing by making regular payments, then try to negotiate with your credit card company to lower the interest rate. If the company agrees to lower the rate, then it would be easier for you to repay your all credit card debts faster.

If you follow the above mentioned tips carefully, then I’m sure very soon you will be able to make yourself free from this vicious cycle of credit card debt. It may take some time, but if you continue to follow the plan, in near future you’ll be happier and most importantly – a DEBT-FREE person!!

By sally on August 2nd, 2013

How to cut your debt fast and save more for a secure future

Everybody wants to get rid of debt and lead a stress free life. However, there is no short cut way to get out of the vicious cycle of debt. It’ll take a long time, patience and dedication for you to become free from all your financial obligations.

Ways to pay off your debts faster

Following are some of the basic steps that will help you to repay your debt faster and improve your credit score both at the same time:

1. Make extra monthly payments: If you can afford, then try to pay more than the minimum loan repayment amount. This is because your lenders will charge more interest on your loans, if you take too much time to repay the outstanding balances. That’s why, don’t fall for their selfish game and pay back your dues as early as possible.

2. Have a clear understanding about your cash flow: It won’t be possible for you to save or invest your money, if you don’t have any track of your total funds. You should keep a record of your total money that come in or goes out from your wallet after meeting all living expenses. After calculating the cash inflow and outflow, you can easily realize your present financial status that means surplus or deficit. If you are living in a surplus state, then it will permit you to save more money and pay back your all dues. On the contrary, if you are in a deficit, then you should spend your money carefully and try to reduce credit card uses.

3. Systematize your payments: Make all your utility bill payments via direct debit. This method is easier to handle than sending checks on a regular basis. It’ll also help you to save more money as the majority utility service providers will give you discount offers for making direct debit payments. You can easily make automated payments by informing your bank with all the information about your utility suppliers.

4. Opt for a cheaper bank card: Get in touch with different creditors and try to find out the credit card with a lower rate than you’re paying now. Then take initiative to transfer your balance from existing credit card to lower rate credit card which in turn will help you to get out of debt trap faster. Keep in mind that this low rate offer will become significantly high after the completion of offer (interest-free) period. In this situation it would be better for you to switch over from your lower rate credit card account again for the next 6 months and repeat this process.

5. Pay off your highest rate debts first: At first concentrate on your most expensive debt and try to make extra payments to pay that one off as early as possible. Make minimum payments on all of your low rate debts. Once you’re able to pay off your most costly debt, then take care of the next most expensive debt. Repeat this process until you clear your all dues. This tactic will help you to get relief from all your debts quickly.

At last, if you want to get relief from your debt burden, then you should cut down your spending. People always think that money is earned to enjoy life. But it,s not true. People should set aside some money for their secure future and unforeseen circumstances. If you are overwhelmed with debt and relentlessly thinking about it, in reality you may get into severe depression. That’s why you should give up your some luxurious habits to make yourself free from debt burden.

By sally on June 5th, 2013

5 Practical ways to become financially stable and stay out of debt

Everybody has a dream to buy a car or a home. Most of the time this dream doesn’t come true because of huge debt obligations people have to deal with. For that reason, debtors need to be aware and find out ways to stay out of debt and lead a financially stable life.

Tips to stay out of debt

Here are some of the practical and beneficial tips that will help you to stay out of debt and build up an emergency fund to make your dream come true:

  1. Make a list of income and expenses: Keep a record of your monthly income and expenses. By doing that, you’ll be able to know whether or not you are spending beyond your means. Once you track your income and expenses, you can easily make out a proper budget for yourself and stay within it. This in turn will help you to stay out of debt.
  2. Build up an emergency fund: Always try to create an emergency fund for unforeseen circumstances because you don’t know when you may need it. If you or your family members become a victim of an accident or get admitted in a hospital, then at that time this emergency fund will provide you with a financial support. That’s why keep aside a certain amount of money every month from your income.
  3. Cut down your unnecessary expenses: One of the most common financial mistakes committed by people is that they always spend more than what they actually earn. You should try to make purchases as per your needs and not wants. Segregate your expenses into two categories – discretionary and non-discretionary. Focus your budget on the non-discretionary costs like mortgage payments, utility bills, medicines, groceries, etc and reduce the number of your discretionary expenditures.
  4. Pay off highest rate debt first: When you have decided to pay off your debts, then your first and foremost duty is to find out the number of debts that carry highest interest rates. This is because once you get relief from your highest interest rate debts, then it’ll become easier for you to move on to the other lower rate debts.
  5. Use cash more often: Always use cash to make purchases instead of credit card/debit card. When you use credit card to make any purchase, you tend to forget the value of your money. When you’ll have to take out your hard earned dollars from your wallet against any purchase, then you’ll think twice before spending them. That’s why using cash will prevent you from making bad purchases and help you to develop a healthy saving habit. You’ll be able to stay within your budget and avoid falling into a debt trap.

Keep a track record of your total debt amount and monitor your credit report monthly to find out any discrepancy. Always be conscious about your monthly payment, because one late payment can drop your credit score by certain points. If required, you can set up a reminder alert in your cell phone or emails. Try to pay off your credit card bill first since the interest rate is too high. Otherwise one miss payment can make your life miserable. By this way, you will be able to establish your credit and rebuild your financial life once again.

By sally on May 20th, 2013