Ever see those commercials where the person wants to buy a house or a car so they keep checking their credit score like it’s going to get better every time they look? Well, that’s not how it works. It takes real effort to get out of debt. You have to make timely payments and pay more than the minimum in order to get your debt ratio down and your credit score up.
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Get out of debt!
What is interest?
Interest is the amount that is paid back in addition to the amount you borrowed when you take out a loan. Basically, interest is a fee for borrowing money. It’s how lenders make a profit from giving out loans.
How is interest calculated?
Interest is calculated based on your amount of debt and then divided by 12 months. For instance, if you have a credit card with an interest rate of 24% and a balance of $1000, you would multiply 1000 by 0.24 and then divide that number by 12, which gives you the amount of interest you’ll pay that month. In this case, $20. A lot of the time creditors will set your monthly payment to barely cover the interest, so in this case, you may have a $30-$35 payment, effectively keeping you in debt longer by not allowing you to quickly pay down the principle.
Interest on Loans and Credit Cards
When taking out a loan, always remember that it is money that is being borrowed and you’re paying interest to use it under the promise that you pay it back as soon as you can. For credit cards, any purchases made on your card before paying off previous amounts, are added to your balance and you’ll pay interest on the entire amount. This will change your minimum payment amount
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Originally posted on CNBC on June 22, 2018 by Megan Leonhardt | @Megan_Leonhardt
If they weren’t so nice, Minnesota residents could boast about having America’s highest average credit scores.
The state’s residents have an average credit score of 709, which falls into the “good” range of scores between 670 to 739, according to Experian. Vermont, New Hampshire, South Dakota and Massachusetts round out the top five states with the highest credit scores.
The pattern of states in the upper Midwest doing well by this measure and the South doing less well has remained “pretty consistent” over the past two decades, credit expert John Ulzheimer tells CNBC Make It.
“Credit scoring systems don’t consider geography when calculating a consumer’s credit score so the difference is going to be solely based on the composition of their credit reports,” he says. And Mississippi, with its score of 647, wins the award for the lowest average credit score seemingly every year for two main reasons, he says: a higher delinquency rate and a higher average credit card utilization ratio.
“Consumers with good credit scores tend to get cards with higher initial limits and larger limit increases. That allows them to have higher balances while also having higher scores,” Ulzheimer says. “Consumers with poor credit scores tend to have lower limits so even modest balances
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For many people, personal debt, especially when they get in over their heads is overwhelming and often times suffer in silence. Lynn, one of our clients, was gracious enough to participate in an interview to give some insight to her journey. Hopefully from Lynn’s story you can find some tips to help you get your debt under control.
Q: What triggered you to address your unpaid debt and credit status?
A: I started to receive letters in the mail from Collection Agencies and credit card companies like Capitol One stating that I owed money and I would be sued and garnished if I did not make efforts to pay the debt
Q: What kind of debt did you have? What was your credit score?
A: When I first started, my Credit Score was a 540. I was piling on credit card debt, medical bills and old collection accounts I had been ignoring.
Q: What made you seek help from a credit counseling service?
A: The fear of being garnished. I already did not think it was in my budget for me to pay back any of my debts and the thought of losing more money was enough.
Q: What Actions did you take personally to prepare you for entering into a Consolidation with your debts? How did you find an agency to help you, and
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Wait, your own number is calling? It’s happening here. It’s a scam.
By Charles Elmore
Palm Beach County residents are getting calls that seem to be from their own cell number. Received one of these? A reporter and his son did.
A recorded message that purports to be from AT&T says an account has been compromised and asks people to punch in the last four digits of their social security number.
It’s just confusing and disconcerting enough to throw some folks off balance. They may wonder if only a phone company could call them from their own number, so there might be something to it.
Don’t respond. Hang up. It’s a scam to gather information that could be used to plunder accounts or steal your identity.
“These calls are not from AT&T,” said company spokeswoman Kelly Starling. “If any company calls you and asks for your personal information, that is a red flag. One of our tips on our new Cyber Aware website is never give such information to someone who calls you. Call the company at the number found on your bill. You can read more helpful tips for all consumers at www.att.com/cyberaware.”
The call appears to be from your own phone number through a technological trick called “spoofing.” This is how scammers appear to be calling from the IRS
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22 States That Will Take Your License For Student Loan Default
It’s not just wage garnishment that hangs over the heads of Americans with student loan defaults. As if garnishment was not bad enough, laws in at least 22 states go much further. You can have your driver’s license and or professional license suspended. There are at least 2 states that have legislators trying to over-turn the law. “It’s the most inappropriate consequence, because you are taking away their ability to eventually pay [their loans] back,” says Moffie Funk, the Montana state representative who sponsored the bill one bill to over-turn the Montana law.
Across the nation thousands of professional license and drivers licenses have been suspended, including teachers and nursing licenses. Montana has suspended 92 drivers’ licenses for defaulting on student loans. Bloomberg reported that Iowa has suspended nearly 1,000 drivers licenses. Collectors are using these laws to motivate borrowers to get loans in default on a payment plan and up-to-date. “It’s more of a deterrent than something that goes all the way to license suspension,” says Cheryl Poelman-Allen, of the Montana Guaranteed Student Loan Program. Threatening a license suspension is having some success in getting loans re-paid.
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If you are getting collection calls for any unpaid debt that you owe, the best way to handle them is to speak to the collector and find out everything you can find out about that debt. Make sure the debt is your debt. Make sure the amount is something you remember that you failed to pay. Verify the amount owed is approximately what you thought you owed. If your initial review doesn’t sound like it’s your debt, tell the collector you are disputing the debt. Debt collectors may send a letter to the mailing address that they have on file asking you to validate the debt. Please do not ignore these letters. Review them for accuracy and if the debt is not yours, dispute it by responding to the letter and advise the collector. If it is your debt, be ready for the collection calls to start or be proactive and call the collector yourself.
Remember, if it’s your debt, it’s best to take the call and face it head on. But here are a few rules the collector must follow when contacting you.
- The collector can only call you between 8am and 9pm.
- They are not allowed to call you at work if the policy at your work says you could get in trouble for
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Types of Loans
There are different variations of consumer personal loans, signature loans and lines of credit. Each loan product may have different features and pay off requirements. The loan rates maybe fixed or variable and loans terms may vary. The personal unsecured loan maybe a useful tool for Debt Consolidation, large purchase, home improvements, car repairs etc.
Personal Loans are funded by your local bank or financial institution, these loans do not require collateral. Your consumer credit history, income and your ability to repay the loan will be the primary factors to be approved for a personal loan.
Your Credit Score
Your Credit Score will be the number one factor that determines if your loan is approved and what your interest will be.
Debt To Income Ratio
You will be asked to give your income on the loan application. They may ask for your weekly, monthly or annual
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A budget is an important tool to help manage your debt. Not does budgeting help you get out of debt, it can also help you maintain a debt free life. Many people avoid budgeting their money because they assume it will put limitations on their spending. That’s not necessarily true. A budget is a way of practicing some much-needed self-discipline with your spending.
- Realize the importance of having a budget. The simplest way to think of a budget is as a plan that dictates how you spend your money. You make plans for other aspects of your life. Why shouldn’t you plan your spending? A budget can help you realize sooner when you don’t have enough money to cover your expenses. That gives you some time to come up with an cheaper alternative to making ends meet.
- Gather cancelled checks, bank statements, and receipts. Don’t try to make your budget completely from your memory. If you do it that way, you’re more likely to forget some numbers. Instead, use cancelled checks, bank statements, and receipts to help you figure out what you spend money on during the month.
- Calculate your regular, dependable income for the month. When it comes to the income portion of your budget, use all your reliable sources of income you receive during the month. If you
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Money Management Means Setting Goals
It’s sometimes said that saving money is a “lost art” – that, unlike our grandparents, we no longer have the desire or discipline to save for a “rainy day.” Thanks to easy credit and constant advertising, people today want things right away, whether or not they can afford it.
While it’s true that personal savings dropped to just 0.8% in 2008, the rate has since rebounded to 6.0%. What’s more, the highest rate of savings ever recorded (14.6%) was in 1975 – long after credit cards and other “easy” ways to borrow were introduced.
In reality, we simply have more choices than our grandparents did – more things to buy (computers, software and flat-screen TVs) and more ways to buy them. And because it is so easy to borrow, we need better ways to manage our money and stay out of debt.
Setting SMART Financial Goals
One of the best money management techniques is called SMART. It was designed to help you save for short-term, medium-term and long-term financial goals, without living like a monk. SMART is about setting goals that are Specific, Measurable, Attainable, Realistic and Time-Sensitive.
Specific. Everyone wants to enjoy a “comfortable retirement,” but comfortable is a vague goal that it could mean almost anything – from
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