You’ve likely heard others say ‘three bureau credit report’ but have you ever wondered just what it is and why it is important?

Inside the US the 3 major credit bureau corporations are Equifax, Experian and TransUnion. Each one of these personal companies keeps a credit file on you containing private information (such as your name, address and details of your employment); details of your payment history on Mastercard accounts, mortgages, auto loans and other loan arrangements; details of any official records concerning your financial affairs (like notices of insolvency and court judgments) and details of any inquires made to the company by creditors concerning your money standing.

As well as the credit file maintained on you, each company also uses its own formula to calculate a credit score for you which is designed to give potential banks an indicator of your credit rating and so of the chance that they’d be taking if they were to grant you a loan or extend credit to you.

It is critical to grasp that these three corporations all operate independently of one another and therefore the information held by each, and the credit report figured out by each, may well differ. Generally, most major lenders, such as banks and Mastercard firms, furnish info to all 3 corporations but many smaller banks,eg local department stores which issue their own store cards, may well only provide information to one of the three firms.

You have entitlement to request a copy of your credit history from each of these companies once a year free of charge and more often if you want for a fee. However , to make life slightly simpler it’s also possible to get a three bureau credit report which lets you view the contents of all 3 credit reports in a single document.

So, why is this important?

The contents of your credit score files will define whether you are able to obtain credit in the future maybe to buy a house, a new automobile or help to back a child’s college education. What might be worse than signing up for a loan to purchase your new perfect home only to find you’re turned down due to your credit history?

Building and managing a good credit report should be a vital part of your overall money planning throughout life and this implies making certain that you’ve got the best possible credit history on file with each of the three credit bureau companies.

Your place to begin should therefore be to obtain a three bureau credit report and check the information currently recorded is correct . Firms do make mistakes and it is not unknown for folk with good finance standing to have a subprime credit score because of gaffes on their credit history files. You need to thus check the report fastidiously and take steps to fix any mistakes to make sure that your credit files are accurate, thereby avoiding the need for debt assistance.

Having established that your credit report is accurate, or taken steps to fix any errors, you should then work to reach the very best credit score and, most significantly, keep a watch on your credit report be asking for copies of your three bureau credit report at regular intervals.

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If your low credit score was due to debt then you will have an easier time rebuilding your credit after you file bankruptcy. This is only true if you were paying your bills on time  prior to filing bankruptcy.  If your considering filing bankruptcy you should try to file when your creditors least expect it and when you are not behind.

The biggest reason for filing during this time is if you stop paying your creditors and save up money for 2-3 months prior to filing the credit agencies will report you accounts severely overdue prior to you filing for bankruptcy.

However, if you file bankruptcy right away when you are not behind you are automatically protected and they can not collect on you. You goal should be to speed your case along as quickly as possible without delay. You can only do this if you know what you are doing and you know what demands are reasonable prior to asking your attorney to hurry up.

People are often concerned with obtaining a bankruptcy home loans right out of bankruptcy.

This is more than likely they could not get approved because of bad credit or their debt to income ratio was too high. One of the quickest ways to rebound is to not reaffirm your home loan and then to approach the lender and inform them you would like to refinance. You may have to wait two years after your bankruptcy.

However, during this waiting period you need to continue to pay on time. One way to insure you pay on time is to have automatic withdrawal done to your account. The account should be at a separate bank and should allow you to overdraw on the account in case something happen then the bank does not reject the charge. Most people don’t like automatic withdrawal.

[ReviewAZON asin="B000U0D3EU" display="inlinepost"]However, you need a place to live and doing it automatically forces you to pay it whether you have the money or not. Most attorneys will tell you not to reaffirm any of your debt. However, if you reaffirm your vehicles and they are not underwater you can begin to immediately establish credit.  6 months after your discharge you want to apply for a credit card.

Don’t apply for a secured credit card. You want to get approved for an unsecured credit card.  Once you get on a list of secured credit cards it may be difficult to get a credit card without putting money down.

Lastly, you want to pull your free credit report and start taking all those inaccuracies on your credit report while you’re paying your bills on time. You should see a significant improvement in your score one you fix the inaccuracies.

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Are you struggling just to pay your bills and have the everyday necessities of life?  If so, you may be considering either filing for bankruptcy or debt consolidation.  How do you decide which path is the best option for you to follow?

Here’s a look at how the two differ.  Once you have read the information, you will be better equipped to decide if you should contact either a debt consolidation service or someone familiar with Minnesota bankruptcy law.

The Pros and Cons of Debt Consolidation

When you hire a debt consolidation service, you hire a negotiator.  The service will negotiate with your creditors, striving to achieve a lower interest rate, lower monthly payment or a smaller payoff.  You should stop being harassed by your creditors because they will now be dealing directly with your debt consolidation company.

Each month you will right only one check – to the debt consolidation service.

They will then make your payments for you.

This could be helpful when it comes to dealing with your unsecured debts, such as credit cards, etc. If, however, you have secured loans, such as a mortgage or car payment, you will need to deal with them yourself.

You will have to pay a monthly administrative charge to your debt consolidation company and, remember, debt consolidation is completely voluntary on all parts.  The creditors can change their minds at any time and go ahead and pursue other collection options.  Bear in mind, too, that even though you may eventually pay the bill off, your struggle will still be reflected in your credit report.

The Pros and Cons of Bankruptcy

Bankruptcy is a big step.  It can reflect on your credit report for up to 10 years. Despite the negative effects of bankruptcy, however, it does have some definite advantages, particularly if you can file Chapter 7, where you may eliminate much or all of your debt.  Harassment, suits or garnishments from creditors will stop immediately and permanently.

You will no longer be burdened by the repayment of these debts.  Best of all, you get a new financial beginning.

Getting out of debt is important, but you need the method that is right for you.  Consult a lawyer familiar with Minnesota bankruptcy requirements to dispel any bankruptcy myths and to learn more about your options.

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Interest Free Credit Cards:  A Smart Way To Consolidate Credit Card Debt.

One of the most popular moves that consumers use for credit card debt relief to take advantage of interest free credit cards and their balance transfer options.  0% balance transfer credit cards can save you $150 to $200 for every $1,000 owed (assuming your high interest credit card rate is around 15-20% APR.).  If you carry a large balance on one or more credit cards, a smart balance transfer can create significant savings.

How To Evaluate Interest Free Credit Cards

When evaluating multiple 0% interest credit card offers, you should apply for credit cards with the longest interest free period and the lowest overall balance transfer fees.

Understand that, in these tough economic times, you will have to have an excellent credit score to get the best 0 interest credit card deal.  On the other hand, interest free credit card offers are still available to people with average credit ratings with higher balance transfer fees and shorter interest free terms.  So, don’t give up trying to consolidate credit card debt.

Do Not Overlook The Impact Of Balance Transfer Fees

Until recently, the standard balance transfer fee on an interest free credit card offer was 3%.  That made a 0% APR credit card offer (with an interest free period of 12 months) have an effective balance transfer APR of 3%.  However, if the 0% APR credit card offer only lasts 6months, the effective balance transfer interest rate doubles to 6%.  Recently, several credit card companies have increased the balance transfer fee to 4%.

So, keep that in mind when you evaluate multiple 0 interest credit card offers.

Also, even though there are still a few credit card issuers that cap their balance transfer fees at $50 to $75, many credit card companies are removing those caps.

How About An 0% APR Interest Rate On Purchases?

Many interest free credit card offers also have a 0% APR on purchases.  This is a significant benefit so long as the interest free term is the same as for the 0 APR balance transfer offer.  If the 0 interest APR expires before the 0% balance transfer offer period, do not use the card for purchases.

Remember, credit card issuers apply payments to pay down the balances with the lowest interest. If the interest free period expires prematurely, the purchases would accumulate at the standard purchase APR rate (which could be as high as 19.99% APR).  So, you would not even begin to pay down this balance until all of your 0% APR balance transfer was paid in full.

Does The Interest Free Credit Card Offer Extend To Cash Advances?

If your interest free credit card offer extends to balance transfers as well as direct deposits into your checking account, you have the option of using the 0 interest credit card for other things, including, but not limited to, paying down other unsecured personal loans.

When In Doubt, Be Able To Bail Out

Have an exit strategy in place before you take advantage of an interest free credit card offer in case you are unable to eliminate the balance before the end of the 0 APR period.  Otherwise, you could get stuck paying high interest rates on any outstanding credit debt balances.  This will quickly undermine the interest saved during the interest free credit card period.

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History Of The FICO Scoring Method

FICO scores (or credit scores) were developed by the Fair Isaac Corporation to give lenders an effective way to measure the creditworthiness of an individual. Essentially, the credit score is made up of two elements: the borrower’s ability to repay the loan and the borrower’s willingness to repay the loan. The range of the FICO is from 300 to 850. A score of 700 is considered excellent. The average FICO score currently is 690 and falling.

FICO 08: The New Method Of Calculating Creditworthiness

Early this year, FICO introduced the FICO 08. So, far only TransUnion has begun using it; but, it is expected to become industry standard over the next eighteen months. It will change the way that creditors evaluate a borrower’s creditworthiness.

FICO 08: The Important Changes To Credit Scoring

Credit utilization is now more important

This is a measure of how much a credit card holder accesses his or her credit as compared to his total amount of credit. The traditional ratio was 30% of the old FICO score. Under FICO 08, people with high credit card debt in relation to their available credit are riskier than before. Consumers with balances close to their credit limit are likely to see their scores drop lower with FICO 08. Also, consumers with too few open accounts or people who close accounts (lowering total credit available) may see lower scores.

The Piggyback Ride Is Over

Credit card piggybacking is a credit building tool where a person will pay a fee to get listed as an authorized user on the credit card of someone with good credit history. While the “authorized user” doesn’t actually get to use the card, he gets the benefit of the credit history which will be found on his credit report and thereby increase his credit score.

This practice has become so popular that an entire niche industry has been built to match piggy back users with cardholders who are willing to sign them up as an authorized user.

While FICO 08 penalizes piggybacking, people who add a legitimate authorized user (husband, wife or child) will not be affected.

Go And Sin No More

Those of us who have been adversely affected because we failed to return a movie on time can now relax. Third-party collections under $100 will no longer have a significant impact on a consumer’s score. FICO 08 bypasses collections or public records with amounts that originally were less than $100. If the original amount was over $100 but has been paid down to less than $100, it still counts. If it was even a small amount from a credit card company, it still counts.

Miscellaneous Weight Changes

FICO 08 changes the factors considered in the current FICO score, including the length of credit history and the number of open lines of credit.

The FICO 08 system will have dramatic effects on current scores. In fact, it is predicted that several people with identical scores today will have significantly different credit scores under FICO 08. So, it pays to pay attention. Find  out how FICO 08 will affect you before you need additional credit.

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Do I Need A Credit Card Debt Consolidation Loan?

One of the main ways to begin get out of debt is to consolidate credit card debt in to a lower interest debt consolidation loan.  In order to determine whether or credit card debt consolidation would be right for you, consider these factors:

• Do you have multiple cards with long term outstanding balances?
• Do you frequently make the minimum payment on your cards?
• Is your credit debt increasing over time?
• Are you at or close to the limit on one, or more of your credit card accounts?

If any of these factors apply to your situation, you should consider a credit card debt consolidation loan.

How Do I Consolidate Credit Card Debt?

Consolidating credit card debt involves combining all of your outstanding credit card balances into one, lower interest loan.  Regardless of the type of credit card consolidation loan you use, your goal should be to lower your interest rate and monthly payment on the consolidated credit card loan balance.

The key to making a debt consolidation strategy work for you is to exercise the discipline to use the savings from the lower interest rate and monthly payment to pay more on the loan principal each month.  It also means looking for ways to decrease your other monthly expenses even where you are paying less to service your unsecured personal loan.  It is imperative that you live on a cash basis while repaying your credit debt  and avoid spending more money than you have.

Debt Consolidation Options For Those With Good Credit Scores

The best options for debt consolidation are available to those with excellent credit scores.  It is, therefore, imperative that, at the first sign of financial difficulty that you take steps to consolidate debt.  You cannot afford to wait until you have bad credit.

Here are some of the main options for consolidating your credit card debt:

• Transfer credit card balances to a lower interest credit card. These interest rates can run as low as 7.50% if you have very good credit.

• Use balance transfer checks to consolidate credit card balances. Even now, credit card issuers still mail out balance transfer checks offering a low interest rate for the life of the balance (some as low as 3.9 to 4.9 APR).  You will have to pay a balance transfer fee in the amount of 3-4%.  Even with the balance transfer fee, it still represents an excellent opportunity to consolidate credit card debt.

• Open a home equity line of credit (HELOC). If you own your home, you can take advantage of your home’s equity as a source of low interest lending.  Although it is not wise to make a habit of taking equity from an appreciating asset to pay for consumptive spending, you may have no choice but to do so.

• Negotiate with your credit card company. It is possible to use the current economic climate as leverage to negotiate balance transfers into one of your lower interest rate credit cards.

These credit card strategies are only available to consumers with good credit scores.  Consumers with bad debts or poor credit scores will have to explore other means to achieve their debt consolidation goals.  Even if you have bad credit, it makes no sense to procrastinate and do nothing.  As your credit debt begins to spiral out of control your efforts to consolidate your credit cards becomes more difficult.

What About A Non-Profit Debt Consolidation/Credit Counseling Company?

A good nonprofit credit counseling company can put together a debt consolidation program and can negotiate credit card debt relief plans for you.

To find a nonprofit credit counseling service, contact the National Foundation For Credit Counseling to find a list of reputable credit counseling and debt consolidation organizations available to you.  A good non-profit credit counseling company will often be able to get people out of debt easier than going it alone.

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