Lawsuits filed by collection agency punks are done on the presumption the sucker (i.e. you) will not respond, or will do so improperly. They want a default judgment, which they get when you do not defend yourself. And, most people do not! Most people feel, “what can you do?” and proceed to do nothing. That is the wrong attitude to take when it comes to fighting these debt collection leeches in the courts.

An Answer is proper when you admit to no allegations made by the debt collectors, and when you either demand proof of the debt or actively deny the allegations of the debt collectors. For a devastating defense, just demand that the debt collector show the “Real Party in Interest” in the matter.

Junk debt buyers have found a great scam, with nearly all debt collection actions filed by them. The junk debt buyer uses the original lender as Plaintiff, which is legal fraud. In court, they file papers as “Shi*ibank v. Joe Debt-slave” for the matter, but the actual, current owner of the account is Shyster Debt Systems, Inc., who bought the account from Shi*ibank for 5 cents on the dollar.

When a filing is made as though the “real party in interest” is still Shi*ibank, it is blatant fraud on the court. That alone is enough for a dismissal with prejudice (cannot be refiled), including sanctions (fines) against Shyster Debt Systems. Remember, all debt collection leeches lie, that is their business. If they didn’t lie, they couldn’t steal from people like you and me.

Demand (in court, you have to demand, not request, not ask) a true and full accounting of the origination of the “debt” you allegedly owe. Demand it have personal testimony from someone with (this is important) “bona fide” personal knowledge of the account (not “Suzy Jones”) describing how the “debt” originated. Demand the original contract, with all subsequent modifications (remember, you have no legal agreement with Shyster Debt Systems, hence there is no contract with them). Invoke the principle of “assumption of the risk” which asserts that “if” such “debt” truly exists, Shyster Debt Systems knew the debt was bad, but assumed it anyway, without coercion, and willingly.

After receipt of your Answer, 99 out of 100 times the debt collection thugs will disappear, never to be heard from again. Once the statute of limitations has expired (check your state laws), file a motion to dismiss the case for lack of progress (or prosecution, or whatever your state’s equivalent happens to be). The law assumes a plaintiff pursues a valid claim in a timely fashion. If the debt leeches let the case just sit without a response to your answer, sometimes for years, it may be considered “abandoned” in the eyes of the court. In that case, the court appreciates being able to remove the case form its books.

This is just the “elimination of headache” method. Other, more “active” methods are available, which anti-bankster crusaders have used. If you are the “I’m mad as Hell and I’m not going to take it anymore”-type, go “active” against these bastards. Nail them on FDCPA (Fair Debt Collection Practices Act) violations, which occur in 95%+ of all debt collection actions (from Dunning letters to Validation of Debt to Discovery). Each time you catch them lying, and/or failing to abide strictly by the FDCPA, or FCRA (Fair Credit Reporting Act, and other statutes), force them to pay you for each violation, after a court hearing. Some people have gotten so good, they make a living off of this.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Why is a credit score so important? Why is everyone so fixated on it like it’s a success indicator or a death clock? It is a completely imaginary number that really has no bearing on your credit worthiness or your worth as a human being. It is simply a means by which banks, financial institutions, and other companies use to determine how much they can exploit or abuse you in the name of getting a loan, insurance, or even a job.

Eventually, this facade will disappear and we will all look back at the tread wheel that is the credit score and wonder why we spent so much of our lives worrying about it. But, that is in the future. Today, we still have to deal with the mess that is the credit score. So, let’s discuss what it is.

What is a Beacon FICO Credit Score?

First, FICO means Fair-Isaacson. It is just a company that makes up these credit score numbers out of their you-know-what. People with high scores like to act like their scores mean they are better persons, but it is just an opinion, and that is all. FICO Beacon Credit Scores range from 301 and 849.

The higher the number you have, the better, I mean, the more credit worthy you are.

For instance, you must be an exceptional human being who looks good and sings well too if you have a credit score of 800. Good for you!

Credit Score Range

Since there are scores, there must be ranges, like grades in school. Well, of course there are. Take a look at the following list…

What Should You Do For Good Credit?

Well, there is the way the credit reporting agencies, credit consultants, credit counsels, and other credit pimps tell you and there is the real way. First, the jerk-off way to improve your credit score is…

1. paying your bills on time;
2. keeping at least 3 to 6 active debt accounts;
3. maintaining low credit card balances;
4. avoiding closing credit cards, especially if you had it a long time (say more than 2 years);
5. avoiding getting new credit, loans and credit cards; and,
6. keeping accounts from going to collections like utilities, cable, and other overdue bills;
7. never co-signing loans.

These are all a waste of time at this point because no matter how good you are with credit, the lending institutions are determine to starve the average guy from going into debt, while they get bailed-out by the government. If your credit is a mess, it will take months (if not years) to fix all this. AND… there is no guarantee it will work.

What You Should Really Do For Good Credit?

What you must do is bug the H E double-hockey sticks out of the credit reporting agencies. Get your credit score and all the negative items on your credit report. Challenge absolutely everything. Keep detailed records of your interactions with credit reporting agencies, dispute debts, creditor calls and correspondence, legal judgments against you, everything related to your credit score and debt. This is the first step.

Your goal is to irritate the credit reporting agencies to such a degree, that they dread when you call or contact them by mail. If they refuse to treat you fairly, there are a number of different Federal Laws they would be violating. With all your detailed records, you could get a nice lawsuit against them, and get a decent settlement. AND… they would still have would still have to fix your credit score. It takes time to do it this way too, but at least you are in charge instead of letting them give you jerk-off advice that doesn’t involve them (the credit reporting agencies).

What is considered good credit to get approved for a auto loan?   Car Loans Auto Loans Truck Loans for any credit score, car loans credit reports,  Can I get a car loan with a credit score of 640,  get a car loan approved with a credit score of 670.

350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500 501 502 503 504 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 645 646 647 648 649 650 651 652 653 654 655 656 657 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 675 676 677 678 679 680 681 682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 700 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 718 719 720 721 722 723 724 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 750 751 752 753 754 755 756 757 758 759 760 761 762 763 764 765 766 767 768 769 770 771 772 773 774 775 776 777 778 779 780 781 782 783 784 785 786 787 788 789 790 791 792 793 794 795 796 797 798 799 800 801 802 803 804 805 806 807 808 809 810 811 812 813 814 815 816 817 818 819 820 821 822 823 824 825 826 827 828 829 830 831 832 833 834 835 836 837 838 839 840 841 842 843 844 845 846 847 848 849

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

They were quietly increasing interest rates, at the time, on new purchases. They were also sticking it to me on PURCHASES I HAD ALREADY MADE! They did it to avoid getting snagged when the CARD act goes into effect.

Well, I called them and argued with them and didn’t give up!

I didn’t care that my credit score got trainwrecked the past 16 months. My credit score had dropped around 120 pts. Some of it was because of THEIR behavior w/respect to cutting my credit limit on a current balance. For example, I had a $22K limit with a $7K balance. They dropped my limit to $7.5K which made it look like I was at my credit max and reported it to the credit reporting agencies!

This is why I always recommend staying on top of your credit scores and if you don’t get what you want, ask to speak to a Supervisor. Wait on hold for an hour, if necessary. Call back if they hang up. You can even mention you have a hardship. Tell them if they don’t adjust the rate, you’ll be forced to roll it all up into your impending bankruptcy filing.

Since I carry double digit balances on my cards due to business expenses and other incidentals, I figured this saved me over $3,000-4,000 in interest charges next year!

AMEX Biz Platinum – 19.24% (had a missed payment due to my oversight!) –> 9.24% FIXED!

First they refused – then I said, look at my payment history! Do you want to risk losing me to someone else who’ll consolidate.

AMEX Gold – 12.24% –> 10.50% FIXED!

Discover – 15.92 –> 11.92% ADJUSTABLE (7.99% nominal + Prime)
They refused, then asked me if I wanted a special payment program where they’d drop the rate to 9.99% for one year, but suspend the card and report such to the credit reporting agencies.
No! Put me on the phone with a supervisor!

Visa – 12.99% –> 7.92% ADJUSTABLE (4.99% + Prime)

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Before starting, make sure you have done the following…

• You requested and received your credit report.
• You have identified the items that you want to dispute. These are items that negatively affect your ability to get credit.
• You have mailed all 3 credit reporting agencies (Equifax, Experian, TransUnion) a letter identifying each inaccuracy.
• The credit reporting agencies (CRAs) have responded by mail.

What Happens Next?

After doing the above, what happens if the credit reporting agency says they cannot investigate your claim. That is pure garbage. Whether they decide a dispute is worth investigating or they just do not want to spend the time, it is seen by the CRA as a “frivolous” claim.

The letter could be as follows:

My Strategy.

1. Remember, DO NOT respond to form letters. It is used by the credit reporting agencies (CRAs) to grant themselves more time to act, which is not what you want but exactly what they want.

2: After 30 days from the day the credit reporting agency (e.g. Equifax) receives your letter, call them. Ask them about the status of your dispute. If they tell you no reinvestigation happened because they mailed you a request for more information, hang up immediately! Do not say one word more, just hang up the phone.

3: Wait another 5 days after your call (assuming you did step 2) and call them again. This is giving them another chance to respond correctly, if they DID do a reinvestigation.

4: If you haven’t gotten an updated credit report from them, you need to make some copies. Copy your certified mail receipt, your dispute letter you sent to Equifax, and the “3rd party agency” form letter. Send a VARIATION of the following letter (be sure not to copy this…they may treat it as a form letter and disregard it).

5: Send the copies and the letter you wrote by certified mail. Wait 16 days from the date they receive it (not when you mailed it). Afterward, get another copy of your credit report.

6: If the disputed items are still there, file a lawsuit against them for Fair Credit Reporting Act (FCRA) violations, and any state laws you can find that are applicable. Just to add a little motivation for them to act, request punitive damages for emotional distress, embarassment, reduced income, and harassment, etc. Do not get ridiculous, check with your state limits. But, a few thousand isn’t too much to ask.

7: Wait for them to call and settle. Grab a little cash settlement (always nice) and get your disputed items deleted.

That’s it! It’s very easy… really!

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Bank of America CEO - the leader who led the mess

Earlier this year, April 2010, Bank of America Corp. was doing a great job putting a happy face on a terrible mess and making the skeptics who were calling for its nationalization look out-of-touch. In theory, the bailout funds had been repaid. Investors in the stock (those who got in at the bottom mind you) were making a killing. Government leaders fell all over themselves congratulating each other for rescuing the company and by extension, the economy.

It seems the skeptics were right after all and the politicians (once again) congratulated themselves too soon. Bank of America’s troubles are resurfacing. The stock price has fallen 41 percent since those heady days of April 15. (Tax day, is that a coincidence?) Investors in Bank of America mortgage-bonds are demanding multiples of billions of dollars in refunds. The foreclosure fiasco is a trap that is tightening its grip around the company and squeezing out its financial life. It is becoming clearer, that to survive, just another year, Bank of America will need another bailout. Does this remind anyone of Fannie and Freddie? 

If the upcoming few months are like the last one (October), Bank of America may as well have kept its $45 billion of TARP money to save itself today, rather than “pay it back” as they did earlier this year. They just end up coming back to ask for more. 

Of course, talking to Bank of America employees gives little clue of the impending danger that faces the company. It had common shareholder equity, or book value, of $212.4 billion on Sept. 30, 2010. Its regulatory capital ratios have been rising steadily through the year.

Reaching The Point of No Return.

bank of america sign

When looking at the shrinking stock price of Bank of America, it is becoming clear that investors are losing faith in its credibility. Market capitalization is $115.6 billion, or 54 percent of book value. It is the 2nd-lowest price-to-book ratio among the 24 in the KBW Bank Index. This is well below the 76 percent ratio it had in October 2008, just after the financial crisis was supposedly averted. Bank of America had landed its first round of TARP funds. It seems the market sees a $96.8 billion hole in the balance sheet of Bank of America.

A Bank of America spokesman, was asked about and said: “I’m not going to comment on the book value and the stock price.” It seems they do not want to publicly acknowledge what is obvious to investors.

The problem with analyzing Bank of America’s $2.3 trillion balance sheet is it lacks financial sense. Some items are so delusional, it invites laughter. For instance, the company seems determined to treat Countrywide Financial as a valuable purchase (indirectly). Remember, Countrywide is the notoriously failed subprime lender at the center of the housing bust. Bank of America paid $4.2 billion for it, in July 2008.

Goodwill Purchase.

countrywide financial sign

What did Bank of America do with Countrywide? First, it decides the fair value of the net worth of Countrywide is a NEGATIVE $200 million! Next, Bank of America adds $4.4 billion of goodwill to its balance sheet. This is simply a bookkeeping measure to represent the difference between the net value of Countrywide and the price Bank of America paid.

Do you see how ridiculous it all is? Bank of America basically lost $200 million on Countrywide immediately on purchase, then wrote its balance sheet to reflect the price it paid as an asset, despite no real asset existing anywhere. And, to make it worse, Bank of America valued this ’asset’ at $4.2 billion! Bank of America did this despite their own acknowledgement in their recordkeeping that Countrywide is worth less than zero. Who would invest in a company like this?

Since that acquisition, Bank of America dropped the Countrywide brand. Yet, this home-loan division continues to lose, so far reporting $13.5 billion in pretax losses. Despite this deepening hole, Bank of America still refuses to write-off any of its Countrywide goodwill.

Once again, the company spokesman, refuses to comment on this. In its latest quarterly report with the SEC, Bank of America reports Countrywide wasn’t impaired. It is hard to believe this when it’s own financial statements show otherwise.

No Way Out.

As bad as things are for Bank of America on its balance sheet, it is facing continuing erosion in public confidence. The reaction to the robo-signer scandal is par for the course. (We are doing it right! Wait, stop foreclosure sales! No, everything is fine. Let’s start again! Whoops, maybe we need to check the records again?) There is $141.6 billion of home-equity loans on the books of Bank of America and once again, the real value is unknown. With all the uncertainty, all the variables, a weakening market, and misleading bookkeeping, it is not difficult to see why investor confidence is waning.

So, what options does Bank of America have to survive another quarter. Does it need to issue new common stock and hope investors aren’t scared further? Executives say no, due to regulations. Floating more debt just deepens existing problems. It seems, another bailout is the only option for survival. Maybe they can blackmail the Federal government again to get what they want?

Who Is Really In Charge?

Bank of America executives do not seem to really have a handle on the fortunes of the future of the company. Write-offs of worthless assets and boosting loan loss reserves might help their credibility, but expose the fragile condition of its finances ($10.4 billion of goodwill – not Countrywide - was written-off last quarter.) It seems they are stuck trying to keep a sinking ship afloat.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Get copies of your credit report

Before you start off with the process of credit repair, you need to know what exactly you have to repair. Only by taking a copy of your credit report, you can get an idea of the information that you need that you need before starting to fix your credit. You are liable to get free credit reports from the three credit reporting agencies. Ask for your reports directly from the credit bureaus in exchange of a fee. It is very important that you order your credit report from all the three agencies because there are times when one of your lenders, may be mortgage or credit card, reports to only one of the credit bureau. Since they don’t share information, it is safer for you to take out the credit reports from all the three agencies.

Scrutinize your credit report

As you get your credit report, you need to scrutinize them and review all the information contained in the report. Get familiar with the information that is there in your report and highlight all the incorrect information with a highlighter. Incorrect information may include the accounts that are not yours, and payments that have been reported after you’ve paid them. Take care of the maxed out accounts that are over the credit limit. Also make sure whether or not any accounts are charged off or have been sent to collections.

Dispute all incorrect information on your report

As you get all the incorrect information on your credit report, you have got the right to dispute the information. When you had ordered the credit report, they must have come with the instructions for disputing the information in case you saw some errors. You can also send a letter to the credit bureau with detailed information of the errors. It can also be helpful, if you send in the copy of your credit report with the incorrect portion marked in red.

Try to tackle your past accounts

Since your payment history constitutes a large part of your credit score, it is very essential to tackle your past accounts. Too many past due accounts have a negative effect on your credit score. Try to get current on your accounts that have been late but not yet charged off. Work compassionately with the debt collectors that take care of your collections accounts.

If your debts are overwhelmingly large and you have massively hurt your credit score, concentrate on effective credit repair on you own. Consider taking into account the steps mentioned above to get the best results and achieve your financial goal.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

First, get all three (3) credit reports. You must have them if you want to fix your credit. With them in hand, it was time to start fixing my credit. A more formal way to do this is using something like 37 Days to Clean Credit. Since it was not available to me, at the time, let me tell you my story.

Having A Party With Credit.

Like so many others before me, it was very intimidating and bewildering at first. You really have no idea what to expect or where to start or how long it would take to see results. However, after doing some research and looking around the web, and seeing all the success stories, I figured how hard could it be?

You may be wondering, how low did I have to start? How bad a credit score could it be? To make a long story really short, I spent the last decade trying to live the bling-bling lifestyle you saw on TV. No one was talking about saving or being responsible with credit (as least as far as I remember). It was all about the big house, the fancy car, the brand names, and borrowing to increase your income. It was great while it lasted. But, when it stopped, my credit was wrecked. For me, that was early 2007.

Surviving the Aftermath Of A Credit Binge.

For the next year or two, I struggled to keep my house, my car, and what few possessions were left. They were very lean times and they taught me a lot about responsibility and handling credit.

After going without credit for about 2 years, I decided it was time to take a look and see what the damage was. It wasn’t pretty. In 2004, my credit rating was just about perfect. I could get a loan for anything and it seemed like no one ever said no. Now, it was impossible to get approved for anything.

It was time to repair my credit.

Fixing A Bad Credit Score.

Below is a chart of my progress in fixing my credit scores. The first step is contacting the credit reporting agencies. There are 3 of them, and you need to be comfortable with contacting them if you have any real hope of improving your credit score.

EQ – Equifax
EX – Experian
TU – TransUnion

FACO—EQ—–EX—–TU
12/24–524 — 594 — 589
1/05–595 — 597 — 586
1/07–596 — 599 — 641
1/26–556 — 601 — 606
02/28–594 — 606 — 648
03/07–621 — 611 — 641
04/24–623 — 614 — 643
07/28–625 — 619 — 682
08/05–637 — 623 — 654
09/09–641 — 643 — 756
09/25–668 — 670 — 751
42 Baddies deleted since December 23

Getting Results.

As you can see from the above chart, it was not a direct improvement. Sometimes I would see nice improvements. Other times, there would be substantial reverses. Don’t be discouraged!

When you are working on improving your credit score, it will eventually show results. Sometimes you will have particularly pesky items that are hard to remove. Or, the creditor may fight you on certain items. That can certainly hurt your credit score with a particular rating agency. Just be persistent!

Debt collectors are paid only when they collect. Generally, they are not going to waste their time on something that costs them more than they expect to get. So, if you are persistent, and show that you will not just go away, it shows you are serious and will cost them time and energy if they do not work with you.

Additional Tips.

Keep bugging the credit reporting agencies on bad and persistent credit report items. There is nothing to lose writing letters other then the cost of a stamp.

Each reporting agency has thousands of employees, so the next time you write, someone else might be more kind and take more time with your report than someone else. Sometimes, they dont even verifiy things if they are really busy. They try to verify, but too often they just delete rather than track down every account # for every disputed item for every person who writes them a letter.

If you really want a step-by-step guide (sample letters, strategies, techniques), try 37 Days to Clean Credit. It’s a lot faster than my approach (almost a year), but then again my approach is free!

It just depends whether you want to improve your credit score fast or free.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Why Would Someone Complain About A Bank?

There are many reasons someone could be dissatisfied with the treatment they receive from their bank. It could be the way they handle or clear checking. It could be their requirements for accessing your account. It could be unfair lending practices. It could be confusing and/or deceptive contracts and agreements.

Many times, people feel they have no recourse when facing misconduct by a bank. They may just take the word of the bank as final and leave it at that. However, banking is a heavily regulated and controlled business. So, if you feel a bank employee is treating you arbitrarily or unfairly, you have a lot of options available to seek remedy.

Where Do I Go To File A Complaint?

Banks or financial institutions fall into a lot of different categories. There are credit unions, savings & loans, state banks, and national banks. Each is regulated by a different Federal agency or may be regulated by state banking regulators. First, you need to find out who regulates your bank. To do that, you need to know what the business name of your bank is.

Don’t be surprised if the legal name for your bank is different from the name you know!

Federal Reserve System.

If you use a national bank (e.g. Citibank, Chase, Washington Mutual – WaMU, Bank of America), you need to go to the Federal Reserve.

No matter where you bank, you may want to call the Federal Reserve System to find out where you need to go regarding your bank. They’ll tell you the legal name and the Federal agency to contact, if they can’t help you.

They are not always right, but they may get you started.

Website.

The Federal Reserve has a website that explains the process…

http://www.federalreserveconsumerhelp.gov/

Free Publications.

You could try a search for…

Federal Reserve Consumer Help

at https://www.newyorkfed.org/publications

All information is free and they mail it to your house (with FREE shipping and postage)!

FDIC.

Some banks are regulated by the FDIC.

The FDIC Complaint Center is

https://www2.fdic.gov/starsmail/index.asp

Office of Thrift Supervision (OTS).

For a savings association, you may have to go through the Office of Thrift Supervision (U. S. Treasury).

Their website is…

http://www.ots.treas.gov/?p=ConsumerComplaintsInquiries

Credit Unions and State banks.

If none of the Federal agencies can help you with a bank problem, you may have to look to your state’s bank regulators.

How Do I Make A Complaint Letter?

Typically, you describe your complaint, when it happened, and what your desired resolution is. Personally, if you could get a witness to the events, who is willing to sign an affidavit, that is great. But, it is not necessary. Mainly, you just want to clearly describe the problem(s), why you think it is a bank issue (not something frivolous), and what you believe is a reasonable solution.

The more reasoned and specific your complaint, the more likely you can expect a satisfactory outcome.

Document all interactions and save all your correspondence.

What Happens If I Am Still Not Satisfied?

If you still believe you have not been treated fairly by the banks and the regulators, you can always contact your elected representatives and/or file a lawsuit.

It may be worthwhile to file a lawsuit against the bank, no matter what the outcome of the complaint with the bank regulator. If they rule in your favor, use it as evidence in your lawsuit. You could try small claims court or if you feel really confident, hire an attorney.

Will This Affect My Credit Score?

No. But, if you feel it has, you will need evidence. The best way to do that is to get your credit score, credit reports, and some credit monitoring.

If you can compile and explain your evidence to make a solid case, you give yourself the best chance to resolve your complaint and/or win in court.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

While all of these circumstances are not fixed in stone (the wars may end and the loans could be repaid), they combine to create a very bleak outlook for the borrower. Since we all rely on credit in our daily lives, it is important to know how this will affect us and what we can do to prepare.

Manage Your Debt.

No one can get completely out of debt. If you pay property taxes, if you pay for car registration or insurance, if you pay taxes, you are in debt. Basically, you cannot avoid being in debt in the United States. That means you cannot avoid the credit score and the credit report.

Ideally, you only want to use debt for very specific things. Taking a credit card to the mall and engaging in shopping therapy is a very dangerous activity at this stage of the economy. Buying impulse items and luxury goods is not wise. Getting a new car when you already have one that works or buying a bigger house simply because you like it may lead you to financial ruin. You have to be careful with credit, starting now.

When you go into debt, expect it to stay with you for years. The banks, credit card companies, and financial institutions will make it very difficult to pay your debts. They are losing a lot of customers and profit due to new legislation and so many bad loans. So now, when you go into debt to them, they will do everything possible to extract the maximum profit from you while providing less in rewards, gifts, and bonuses.

How Can I Benefit?

Many, who used credit cards, are oblivious to the serious changes that have occured to the economy the past few years. They still believe home values will recover, jobs will return, and health care and education will become more affordable. Unfortunately for them, they are mistaken. Continuing spending patterns and a lifestyle based on a way of life that no longer exists is a path to distress.

Give yourself a chance to avoid being one of the new class of distressed Americans that we’ll see in the coming decade. Start by being very careful with credit. Watch your credit score and credit reports. Do not make any major purchases in the upcoming years. If you do, buy on sale, save and pay cash, or find deals from friends, family, or peers.

We are entering a new frugal period in the United States. The days of the spendthrift and the miracle of the mall are over! Accept this today and you will be in great shape as this coming decade unfolds.

Stay on top of your credit, with timely credit information.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The Credit Bubble.

Just after the dotcom bubble, the banks and credit card companies were struggling. The free-wheeling days of internet billionaires and instant millionaires was ending. That also meant the end of the first housing bubble from that era. People were borrowing less and saving more to face the new economic reality. In other words, things were returning to normal.

Unfortunately, normal was not a good thing for the banks and credit card companies. They needed new borrowers and they needed them to borrow, NOW! It was the only way for the bankers, the mortgage brokers, the stock market, and the government to continue lending, selling, investing, and financing. In other words, they all needed us (the average working American) to go into DEBT and lots of it!

Well, they got their wish. The central bank, the Federal Reserve, lowered rates artificially and the credit bubble was inflated like never before. It led to abundant credit cards, home equity loans galore, abundant lines of credit, and readily available easy financing.

By 2005, anyone who wanted credit, got it. The credit bubble was in full swing!

The End of An Era.

It was clear that all this easy credit was not normal, as evidenced by the ballooning real estate prices. But, this was only one symptom. The other was the flood of credit cards that were appearing. Add to this, the arrival of the debit card and you have a credit tsunami that hit the United States from 2002-2007. It was an incredible 5-year period to go into debt!

By 2008, the cracks were not only appearing in the financial world, they were threatening to bring it all crashing down. Consumers were falling behind under this crushing weight of easy credit. The banks began seeing more foreclosures and loan defaults. In response, they raised the interest rates on borrowers. That just compounded the problem.

It became harder to pay off credit cards as interest rates rose. The path toward bankruptcy and insolvency became more and more inevitable for many Americans.

Finally, it all came to a climax and the government stepped in to prevent the whole thing from collapsing. With that, came the end of the easy credit era. From that point, debt would no longer be a given. In fact, credit has become harder and harder to get with each passing year.

No More Free Lunch.

The credit reporting agencies failed the average American during the easy credit area. Experian, Equifax, and TransUnion used borrowers as a way to increase profits for the banks and lenders. Remember, they do not work for the consumer. You are not their customer. They have no obligation to you other than what’s required by law.

Getting a loan for college, a car, a home, or on a credit card will become increasingly difficult as the next decade continues. There is an incredible amount of debt that needs to be retired that probably will not given the current economic climate. That means the banks and other lenders will have losses that they need to recover first before increasing credit. Don’t count on a loan to get what you want unless you have a superb credit history WITH collateral.

Credit Card, Say Bye Bye.

If you use a credit card for your day-to-day expenses, I strongly recommend against it. The credit cards are becoming desperate with each pasisng year to increase profits. The new CARD Act eliminates a number of their more profitable practices. So, they will have to either come up with new ways to replace them or reduce their business.

Reduced business will result in many higher-risk card holders losing their accounts. Even lower-risk card holders may see credit lines cut, higher charges and fees, or higher minimum monthly payments, or yearly service fees. This will only get worse with time.

What Should You Do?

If you need to borrow (home, car, college, business), it’s best to do it as soon as possible. Take advantage of the opportunity while it is still there because there is a good chance it may not be in a year (or 2 or 3, etc.).

First, get your credit score. Find out what they are saying about you when getting a loan. This is critically important when getting credit.

Second, correct all the inacurrate information on your report. Fix old addresses, wrong names, and other contact information. Then, dispute any charges you see that are unfamiliar to you.

Third, get some credit monitoring. You will need this to track the corrections and disputes you made from the previous step.

This process takes some time. But, the sooner you do it, the sooner you can take advantage of the relatively stable credit conditions that exist today. Believe this… in 1 year, today will look like a credit paradise.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.