What is a good credit score? That’s an important question these days, since credit requirements are getting a lot stricter. This is because of the foreclosure crisis and general recession that has caused many people to default on their credit obligations. For most people, these defaults aren’t their fault. They have to take pay cuts at work, lose benefits, or lose their jobs entirely, while expenses on other things just keep going up and up. Still, if anyone affected by credit problems now wants to get credit offered to them in the future, their credit score is going to be an important factor.

So, what IS a good credit score? The range of credit scores goes from 300 to 800, with the lowest score being the worst and the highest being the best. Most people fall somewhere in between. However, the higher your score, the more credit offers you will receive, the more likely you will be to be approved for credit, and the better interest rates you will get on that credit.

The median credit score right now is around 680. Anything over 720 is considered excellent and anything under 600 is considered poor. If your score is below 500, then it is very poor. In order to get a house loan with anything other than owner financing or a lease option, you’ll need at least a 620 in most cases (lower scores may sometimes qualify for a mortgage, but will have higher interest rates). To get credit cards, personal loans, car loans, and other types of credit, you must meet the credit requirements of the particular creditor with whom you are applying. Credit requirements differ by creditor by quite a bit, so you’ll always want to check before applying to see if it’s worth it to apply.

There is actually a very good reason to get pre-qualified for credit before applying. Each creditor with whom you apply will run a credit check on you and each credit check on your report lowers your score. You want to keep credit checks to a minimum to maintain a good credit score. Follow smart credit practices, and you can always have credit available to you when you need it.

This is the ninth installment in our credit & debt series. Be sure to check back for updates…

If you are deep in debt and you need to know how to negotiate with credit card companies, then you should read this article. Specifically we will be discussing how to correctly go about negotiating for the most beneficial outcome.

There are two scenarios at play. First you are managing to make your payments every month but it’s an uphill battle, or you can’t make your payments at all.

So how do you negotiate with credit card companies to reduce your monthly payments? Well you could ask for a lower interest rate. If you have been making payments on time this option might be available to you. It depends on whether you have been keeping up payments every month and what your current balance is. You need to phone your bank and speak to someone who has a higher position than a customer service agent as they will not be able to help you and will probably just say that it isn’t possible when it is. Speak to the branch manager or someone in loss mitigation and ask if they will lower your interest rate. The easiest way of getting a lower rate is to tell them that you have been offered a lower rate elsewhere.

The second scenario is when you can’t pay your payments at all. If you are late on payment and especially if you are three months behind or more you may be able to negotiate a deal. If you cannot pay off your balance they have the option of handing over your debt to a collection agency but this takes a lot of time and costs them a lot of money. The next option is that they will accept a portion of the debt from you and they will write the rest off. This option comes with a downside as this will show up and your credit history and report, however it may be your only option. You have negotiating power because you can either pay off a certain amount or nothing. They are surely going to accept the offer of a sum of money as opposed to nothing.

Continuing onward, these are the steps you need to carry out next. First, begin by calculating the exact amount you can pay. Once you have worked this out and you have an offer phone up the bank and again ask for either the branch manager or someone in loss mitigation. Always record the information of the person you spoke to, the time and day that you spoke to them, the exact telephone number that you dialed, and the outcome of the call. You need to keep on trying as the answers you may get will not be in line with each other. It would also be a good idea if you could make an appointment to go into the bank and speak to someone who could help you.

Negotiating with the credit card companies will be a difficult process but once an offer has been accepted it is very important that you get it in writing. Now you know how to negotiate with credit card companies.

This is the eighth installment in our credit & debt series. Be sure to check back for updates…

Last summer, Equifax launched a new product aimed at helping people reduce their debt. This product is called Equifax Debt Wise, and it’s proving to be quite popular. To be sure, it’s a unique and interesting way to keep track of how much you owe while calculating how long it will take to pay it off. For people deeply in debt, this is a real boon. However, the service isn’t free. It comes with a price tag of $14.95 a month. This may not sound like much, but in this economy, it could be a big chunk of someone’s monthly budget. So, before you sign up, you need to make sure it’s worth it for you. Here are the facts you need to know before jumping on board with Debt Wise.

1.  It can help some people, but not everyone. People with no debt, one large debt, or only common debt like a mortgage and school loans will not benefit from the program.

2.  You’ll get four copies of your credit report when you sign up with Equifax Debt Wise. This is an excellent value, and makes the price of one month’s membership worth it for almost everyone, since you’d pay about $160 if you bought 4 reports individually. Plus, it’s always a good idea to see your credit report at least annually, so you can see if there are any mistakes there and to see where you currently stand with your creditors.

3.  You get a FICO score when you sign up. Again, this brings excellent value to the service, since you often have to pay separately to get that score. The FICO score is that magic score that lenders use to determine your creditworthiness for things like mortgages, loans, and credit cards, so it’s a good idea to know what yours is…..and work on raising it. Debt Wise can help you do this.

4.  The service provides $25,000 in free identity theft protection. That’s great if you’re worried about identity theft, and invaluable if you actually become a victim of it.

5.  The Equifax Debt Wise system tracks your progress as you pay down your debt, as long as you’re not tracking credit cards you’re currently using. It tracks payments on static debt and old debt. Still, it’s nice to be able to see on the computer screen just how close you are to reaching your goal of being debt free. It’s motivational.

So, for most people, Equifax Debt Wise can provide a very good value, at least for a month or two. You may decide you don’t need the service anymore after that, as you learn to track your debt on your own. For the perks you get when signing up, though, it’s well worth the price for a month or more. It’s a service that can really be useful to many people, at least for a little while. For that reason alone, it’s worth giving it a try.

This is the seventh installment in our credit & debt series. Be sure to check back for updates…

Every consumer in America has the right to get a free credit report once a year. However, not very many people know this, and the ones that do are often confused about how the process works. As a result, a lot of unscrupulous scam companies have popped up aiming to take advantage of unwary customers. Here’s the truth about the scams out there, how you can avoid becoming a victim of one, and how you really CAN get your credit report for free.

There are plenty of websites out there offering a free credit report. But are these reports truly free? In most cases, the answer is no. If you read the small print on these sites, most of them ask you to sign up for a 30 day free trial of a credit monitoring service in exchange for the free report. You’ll have to give them your credit card number to access the report, and once the 30 days are up, you’ll start being billed for the monitoring service automatically. It’s often very hard to cancel, as these companies don’t make their contact information well-known. Plus, the vast majority of those who sign up for these services forget about them, and are surprised when their credit card statement comes the next month and there’s a charge for $39.95 on it.

The easiest way to avoid the free credit report scams is to avoid signing up with the services that offer them. Nearly all of them are scams, with the exception of the ONE legitimate site for getting free reports. This site is www.AnnualCreditReport.com, and it’s the official site for obtaining your government-guaranteed free annual report. You can use this site once a year to get your credit report from all 3 credit bureaus–Experian, Equifax, and Transunion.

To get the reports, you’ll have to provide some personal identifying information, such as your Social Security number. But don’t worry. The site’s security protocols are strong, so there’s no danger of anyone stealing your identity. You can get the reports directly online, as well, so there’s no waiting period to see them. The only drawback to the site is that the reports don’t come with credit scores. To get those, you’ll have to pay a small fee at the individual websites of the credit reporting agencies.

So, if you want a free credit report, be encouraged by the knowledge that they really do exist! You may only be able to get yours for free once a year, but that’s all most people need to keep an eye on things and make sure all is right in their credit file. By watching your credit, you’ll be able to spot potential problems as soon as they appear and take measures to correct them, which is essential to maintaining your good credit name. 

This is the sixth installment in our credit & debt series. Be sure to check back for updates…

Eliminating debt and becoming debt free isn’t has hard as you might think.  Debt is common, and people get into it for all kinds of reasons.  Just paying everyday expenses like food, water, and electricity can lead to debt, as the prices of these things are going up!  In fact, the price of EVERYTHING is going up, while paychecks are going down.  It can take all the money you have just to pay for your basic needs, never mind savings or doing anything fun. 

If an emergency comes up, or if your kids need braces (or yearbooks or prom dresses, etc.), it could be a major financial disaster for you!  You might turn to your credit cards and get yourself even further into debt.  But how do you get out of it?

One of the best and easiest ways to go about eliminating debt abd becoming debt free is to use the following method:

1.  Start paying the minimum payment each month on all but ONE of your debts.

2.  Choose the debt that has the smallest balance and start paying as much extra on that each month as you can, whether it’s $5, $10, $20 or more dollars.3.  You’ll pay off this debt quickly by paying extra.  Once it’s paid off, take the next smallest debt and pay the minimum amount of the payment on the previous debt, plus the extra you were adding to it.  So, for example, if you started with a Visa that had a $300 balance and a $15 minimum monthly payment and added an extra $20 a month to that, you’d be paying $35 a month on that Visa.  Once it was paid off, let’s say you begin paying on a MasterCard with a $450 balance.  The minimum payment on that is $25 a month.  Continue to pay the $25 a month, but add the $35 a month to it that you were paying on the Visa, so that you’re paying a total of $60 a month on the MasterCard.

4.  As you pay off each debt in turn, working your way up from the smallest to the largest, always add the extra payments you’re making on the previous bills to the minimum payments on the new ones.  For example, that $60 a month you ended up paying on the MasterCard will be added to the $35 a month minimum payment on your Discover card when you start paying that off, for a total of $95 a month going toward Discover.  That’s $95 a month you’ll add to the minimum monthly payment of the next bill in line, and so on. 

Using this method, you can even potentially pay off your house in about five years! This is one of the quickest and easiest ways of eliminating debt and becoming debt free out there, and it doesn’t even require a loan or credit counseling, or even a change in your lifestyle!  All it takes is organization, and you’ll be debt free for good!

This is the fifth installment in our credit & debt series. Be sure to check back for updates…