Negotiate with Creditors

Negotiate with Creditors
Contrary to popular belief, your creditors aren’t your enemy.

Your creditors are in business. They must earn a profit.

When you don’t pay bills it impacts their ability to do business and impacts their bottom line.

Many creditors are willing to be understanding about difficulty financial situations and short term financial problems, especially if you’re up front and openly communicate with them in a timely manner.

In other words, instead of skipping a handful of payments or defaulting on a loan, contact the creditor as soon as a problem arises and negotiate some form of resolution that’s acceptable and within your financial means.

Forcing a creditor to turn over your debt to a collection agency will simply cause you bigger problems in future, since many collection agencies are relentless in recovering money.

Furthermore, the negative information that’s placed on your credit report will have a negative impact on your credit score for a ling time.

Depending on the degree of financial difficulties, your creditors may be willing to do one or more to the following things to assist you, assuming you make the effort and show faith in contacting them to discuss your situation:

*Reduce your interest rate

*Reduce your monthly minimum payment

*Waive extra finance charges and late fees

*Allow you to skip one or more monthly payment and extend the length of the loan.

*Close the account and allow you to make affordable payments to reduce the balance over time.

*Close the account and accept a settlement for les than the amount you owe

*Allow you to refinance the loan at a lower interest rate and/or for a longer term to reduce your monthly payments.

Simply ignoring a debt, closing an account (or allowing a creditor to close an account to non payment),or moving without providing a creditor with your new address will not cause outstanding debt to disappear.

In many cases, the longer you delay paying your debts, the more you’ll wind up spending in interest fee, late fees, legal fees and other types of penalties.
Negotiate with Creditors

Is it alright to have debt?

Is it alright to have debt?
Debts have a time and a place in all our lives. But the debt you take on must be in alignment with the goals you’ve set for yourself.

Do you want to pursue a dream of attending college, for example?

Then a student loan that will help finance your college tuition is “good debt.”

What about the mortgage you’re carrying on the house you live in, assuming that the house is not beyond your means?

That’s good debt, too, because it enables you to share in the benefits of home ownership and to maintain a safe haven for yourself and your family.

What about the loans you took years a go to help your parents through a rough financial patch or a health scare?

Or the car loan you’ve applied for, assuming if you need a car and can afford the payments?

All these loan situations are good, worthy and in alignment with sound goals.

On the other hand, overspending with credit cards continues to accumulate new clothes or furniture, is negative debt. It sacrifices tomorrow’s needs to today’s desires.
Is it alright to have debt?

Good Credit Citizen

Good Credit Citizen
You’re already so many other good things, a good person, a mother or father a boyfriend or girl friend, a spouse, a sibling, a worker.

Taking the credit that is offered using the credit that is offered even not using credit at all can put you at a disadvantage.

So how do you know what’s good? You weren’t born with the credit gene that enabled you to understand the correct path to follow like so many migrating birds.

Being a good credit citizen means being responsibilities as a borrower, responsible to yourself and those who share your life. This starts with goals, a future vision of your life, and knowing which financial tools to use, in what measure and when.

Here are my top ten good citizen credit practices:

• Set goals
  
• Know what’s in your credit report and dispute out of date, inaccurate or just plain wrong information.
  
• Know what your credit score what its means and why can do to make it better or keep it great.
  
• Have a spending plan or budget
  
• Use long term credit for long term uses. Don’t use a home equity line to buy sneakers or eat out.
  
• Use short term credit for short term uses. Pay off your credit card balances as quickly as you can.
  
• Save money for future goals and needs
  
• Pay your bills on time.
  
• Pay at least the amount due. Always set a time by which you will pay off a debt, don’t let the creditor set the time for you, because it may be forever.
  
• Watch out for seven warning signs o bad credit and get help as soon as you think you may need it – not as last resort:
  
  -Using credit cards for daily expenses and not paying the balance every month
  -Not knowing how much you owe
  -Using cash advances to pay credit card bills or daily expenses
  -Only paying the minimum due on credit cards, or paying less than the minimum
  -Getting calls from you creditors
  -Spending more than 20 percent of your take-home pay on credit payments, excluding your mortgage.
  -Arguing about money at home

Good Credit Citizen