How Do I Consolidate My Bills?

A number of people are wondering “How do I consolidate my bills?” There are a variety of reasons why some may be wondering such a question. For many, the ability to stay on top of monthly statements and bills can be a bit difficult. Missing payments might occur and this can certainly deliver credit score hassles.

Then, there is also the issue of liquidity. You do not want to find yourself in a position where you are perpetually strapped for cash due to having to pay bill after bill after bill. Again, this is why consolidating bills and debts remains a wise move to make.

Of course, this again raises the question, “How do I consolidate my bills?” Some may look towards a line of credit or a consolidation three thousand dollars loan as a means of dealing with past debts. For future debts, these would simply continue being sent without any inclusion into the prior 100 days loans.

So, it may not always be the best option to seek a traditional consolidation loan. There are, thankfully, other options available. One such option entails signing on with a debt consolidation service that also offers debt and bill counseling. Such services could take the entire burden of bill consolidation off your shoulders.

You could say the answer to how you can consolidate my bills is to let someone else do it. Okay, that is a rather simplified answer to the question. Let’s look at how the process works. Don’t worry. It is a pretty simple one once you break it down.

A debt consolidation service will pay your bills on your behalf for a fee. They will then send you a single monthly bill which you will promptly pay. This can take an enormous amount of weight off your shoulders and improve your chances of getting your financial house in order.

And, in some instances, they can renegotiate terms of lending with a credit card company. How can they achieve this? They could seek to lower your interest rate or reduce the monthly minimum payment. They could also even negotiate a partial debt settlement under certain circumstances.

And, in addition to the above services, some consolidation companies offer debt counseling. Such counseling can prove quite helpful to those looking to get themselves on the proper track for paying off debts. It also can prove to be a big help to those looking to stay out of debt. Consider that solid form of preventive medicine.

How do I consolidate my bills? By being proactive, that’s how. You need to take the steps required to find a service that will work with you. Also, you will want to work with an established company that will deliver on the expected results. That’s why you need to seek out those services with solid experience in the field.…

Denied Credit Card? A Few Reasons for Denial of Credit

There various reasons why a bank or credit card company may deny you a credit card. Of course, the most obvious one is your credit history, but even people with excellent credit history do get denied too. So, what gives?

The are three major factors that a creditor uses to measure your credit worthiness. Some like to call them “three Cs”. They are as follows:

1. Character: This means your willingness to pay your debts on time and as agreed. This is one of the factors where your credit report and scores come in. The only way a creditor can gauge your character is what is on your credit report. A good payment history indicates good character. There are many people of good character who have bad histories due to life circumstances such as loss of income and illness, but unfortunately the credit system does not recognize this.

2. Capacity: You may have stellar credit scores, but is your income sufficient enough to service another debt obligation? Creditors look at your income as well as your other obligations to gauge capacity.

3. Collateral: Also referred to as capital, this means the current available assets you have that can be used to repay debt in case of loss of income. These include investments, savings, mortgage etc. It is the reason rich people get credit much more easily than the rest of us.

The above are not the only reasons you could get denied a credit card though. In fact, many people with great credit and high income get denied while people with less credit-worthy people get approved. Why?

You can also be denied a credit card because:

1. Too many credit cards: This is a tough one to figure out as different banks have different views as to what constitutes “too many” credit cards. Once you reach a certain threshold you they will automatically deny you. The rule of thumb is to have not more than five cards at a time.

2. Double dipping: You can “double dip” in the same credit pot without realizing it. Once I was denied credit cards several times by several different creditors. And I had excellent credit history at the time. On investigating, I found out that all those creditors were all using the same bank, and I had previously canceled another card issued through that bank. Though your bank (or department store, auto shop etc) may have its name on a credit card, there is a chance that the card was actually issued by another bank.

3. Redlining: This is the practice of denying – or raising costs of – credit, insurance and other services to residents of certain neighborhoods, often on basis of presumed race. Yes, diabolical. And yes, illegal. But it happens since it is difficult to prove and banks can hide behind “other considerations” and similar clauses.…

Warnings and Mistakes to Avoid

1. If the amount you negotiated down is exceeds $600 (at time of writing) you might receive a form 1099 to pay tax on it as the amount “forgiven” automatically becomes income.

2. When negotiating with collectors, whether verbally or in writing, avoid using any phrases that could be deemed as acknowledgement of the debt as this could restart the statute of limitations. Such phrases include “my debt” or “amount that I owe” among others. Instead use phrases like “this account” or “account number _”.

3. Be aware that making a payment can restart the statute of limitations. This is where it gets tricky when you negotiate for monthly payments when you cannot come up with a lump sum.

4. When negotiating be sure that once payment is made the account will read as “paid”, “paying as agreed”, “paid as agreed” or, even better, be deleted outright. A “paid collection” will not do much good to your credit history or score.

5. Do not make payment to a collector by debit or check. It is not in your best interest to give your bank account information to a debt collector. Use money order or a money transfer service such as Western Union™ or Moneygram™.…

How to Negotiate with Debt Collectors

negotiationPay Less Than You Owe and Save Your Credit Rating

The question of how to negotiate with debt collectors keeps popping up all over the internet. And while some answers offered are correct and valid, others are outright dangerous. You need to be really tactful when dealing with debt collectors to avoid shooting yourself in the foot.

The thing about dealing with collectors is that you are dealing with someone who knows about credit and debt than you do. They are also usually well-trained in dealing with people and can trick you into making payment and while leaving you screwed. So, how do you negotiate from a position of strength as opposed to one of weakness?

The first thing you need to realize is that you are the boss. Who pays the piper calls the tune. But you should also know that the piper also desires a fair wage all the same.

If the debt is still in-house, that is it has not yet been transferred or sold to a third party collection agency, you can negotiate terms of payment as well as save your credit. Usually, an in-house collector will demand all the past due amount. If you have the cash in hand, just go ahead and pay up and ask if they can reverse any late payment notations off your credit file. The bottom-line with in-house collectors is that you must pay the past due amount. What if you can’t make the full payment at once?

In such a case, you can negotiate a payment plan that works for you and leaves both parties happy. Ask for a reversal of late payment notations too.

Now, you should know that a creditor has no obligation to reverse late payment notions on your credit file. If they completely refuse, just continue to make timely payments and the late payments will sink somewhere in the background where they virtually cease to be of significance.

However, the greatest concern among people seeking information on how to negotiate with debt collectors is dealing with third party collection agencies. These are people who have no qualms about calling you endlessly, calling you at work, and calling your friends and relatives and generally making your life living hell.

This is where paying the piper really kicks in. First in the order of things when seeking ways of negotiating with debt collectors is deciding on a payment amount. No, you don’t have to make the payment in many cases as the collection agency will likely have bought the debt for pennies on the dollar. You can pay a fraction and it still would leave a profit for the collector.

When deciding on what to offer, you need to consider the age of the debt. This is because the older the debt, the more power you have as it means you probably cannot be taken to court due to the statute of limitations (SOL). Also, the present owner of the debt may have bought it for less than a song.

When making your offer, be prepared of a counter-offer. You should start at somewhere around 20% of the total debt. Also bear in mind that amounts reported to the bureaus by collection agencies are usually inflated so as to cause maximum damage.

Now you will ask for two things 1) that the amount agreed on is full payment on that debt and 2) that the item be deleted or noted as “paid”, “paid/paying as agreed”. Make sure that you are talking to a person who has authority to make such decisions and get this writing before paying a dime.

If you cannot make a lump sum payment, you can ask for a payment plan. In this case, don’t count on the debt being reduced. The collector will be loath to outright deletion as you could stop making payments, and instead report monthly as you make the payments. Make sure they agree to reporting in the lines of “paying as agreed”. And be sure never to miss a payment!

The collection agency might be hesitant to remove or positively modify the account on your credit report. This is for good reason as they can get in trouble for it. In this case, you can ask them to not verify the account when you dispute it with the credit reporting bureau(s) after you’ve made payment. Insist on getting this in writing.…