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New Year, New Credit Score: Tips to Improve Your Financial Health

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Understanding your current financial position is the first step towards New Year credit score improvement. Begin by obtaining a free copy of your credit report from major credit bureaus to check for any inaccuracies or outdated information. Review your debts and credit lines to identify areas where you can reduce balances or negotiate better terms. Regularly monitoring your credit score will also help you track your progress and understand the impact of your financial actions.

Set Realistic Credit Goals

Setting clear, achievable goals is crucial for improving your financial health. Decide what you want to accomplish with your credit score this year, whether it’s qualifying for a mortgage, reducing your interest rates, or simply reaching a higher credit score. Make a plan that includes small, manageable steps like setting up payment reminders to avoid late payments, which can negatively impact your credit rating. Remember, consistent efforts are key to seeing gradual New Year credit score improvement.

Reduce Debt Burdens

Minimizing your debt is one of the most effective strategies for boosting your financial score. Focus on paying down high-interest debt first, as this will save you money on interest and improve your credit utilization ratio—a major factor in credit scoring. Consider debt consolidation if you have multiple credit lines; this can lead to lower monthly payments and a quicker debt payoff. Implementing a budget can also prevent new debts from accumulating, keeping your financial goals within reach.

Build Credit Wisely

If your credit history is thin, take proactive steps to add positive information to your credit report. Consider tools like secured credit cards or small installment loans, which, if managed responsibly, can contribute positively to your credit history. Always pay on time, and keep your credit balances low to demonstrate to lenders that you can handle debt sensibly. Over time, these practices can lead to significant New Year credit score improvement.

Regularly Review and Adjust Your Strategy

Throughout the year, take time to review the effectiveness of your credit improvement strategy. Adjust your tactics as needed based on your progress and any changes in your financial situation. If you’re not seeing the expected results, consider consulting with a financial advisor for personalized advice tailored to your unique circumstances. Staying adaptable and informed will help you maintain steady progress toward your credit goals.

Moving Forward: Secure Your Financial Future

Maintaining a focused approach throughout the year is vital for achieving and sustaining an improved credit score. Regular reviews, consistent payments, and strategic debt management are the pillars of a strong financial foundation. Remember, improving your credit score is a journey that requires patience, discipline, and ongoing effort. By following these tips, you can ensure that your financial health is robust and ready for the opportunities that come with a New Year credit score improvement.

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This is The Credit Score You Need to Lease a Car

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Leasing a car can be an attractive option if you’re looking for lower monthly payments and the ability to switch vehicles every few years. However, your credit score plays a crucial role in determining whether you qualify for a lease and the terms you may receive. Understanding the credit score needed to lease a car is essential to ensure you are prepared before walking into the dealership. Let’s explore the ideal credit score range for leasing, how to improve your score, and what to expect if your credit isn’t perfect.

Ideal Credit Score Range for Car Leasing

When leasing a car, having a good credit score can make a significant difference in the leasing terms offered to you. Generally, a credit score of 700 or higher is considered ideal for leasing a vehicle. With this score, you can expect to qualify for the best interest rates, lower down payments, and favorable monthly payments. A higher score demonstrates to lenders that you are a low-risk borrower, increasing your chances of approval.

Minimum Credit Score for Leasing a Car

While a score of 700 or above is ideal, the minimum credit score to lease a car typically starts around 620. If your score falls within this range, you may still qualify for a lease, but the terms might not be as favorable. You could face higher interest rates, a larger security deposit, or a higher down payment. Lenders view lower scores as a greater risk, which may limit your options or increase costs.

What to Expect with a Lower Credit Score

If your credit score is below 620, leasing a car can become more challenging. In this scenario, you may need to provide additional documentation, such as proof of income or employment, to reassure the lender. You might also face stricter terms, such as a larger upfront payment or co-signer requirements. While not impossible, leasing with a low credit score may require additional effort and negotiations to secure a deal.

Tips to Improve Your Credit Score

Improving your credit score can open more doors when leasing a car. Start by regularly checking your credit report for any errors or discrepancies that could negatively impact your score. Make timely payments on all debts, including credit cards, loans, and utility bills, to build a positive payment history. Reducing your overall debt, especially high-interest credit card balances, can also boost your credit score over time. Taking these steps can enhance your financial profile and increase your chances of securing a favorable lease.

Alternatives to Leasing with a Low Credit Score

If leasing is not an option due to your credit score, consider alternative solutions. Purchasing a used car with financing might be more accessible, as some lenders specialize in loans for individuals with lower credit scores. Another option is to save for a larger down payment, which can offset some risk for the lender. Lastly, consider working with a co-signer who has a stronger credit profile to increase your chances of approval.

Navigating the Leasing Process with Confidence

Knowing the credit score needed to lease a car can help you approach the leasing process with confidence. With an understanding of the ideal and minimum credit scores, and strategies to improve your score, you can better position yourself for a successful leasing experience. Preparing in advance and understanding your options will ensure you find the best possible lease terms, regardless of your current credit situation.

How to Improve Your Care Credit Approval Odds: Tips and Tricks

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How to Improve Your Care Credit Approval Odds Tips and Tricks

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Navigating the world of credit can be daunting, but improving your Care Credit approval odds doesn’t have to be. With the right strategies and a bit of knowledge, you can enhance your chances of getting approved. This article will guide you through essential tips and tricks to boost your Care Credit approval odds effectively.

1. Understanding Care Credit

Care Credit is a specialized credit card for healthcare expenses. It covers a range of medical services, from dental care to veterinary expenses. Knowing how it works is the first step in improving your care credit approval odds. This card offers promotional financing options, making it a popular choice for managing healthcare costs. Understanding its benefits and limitations can help you make an informed decision.

2. Check Your Credit Score

Your credit score plays a significant role in your Care Credit approval odds. Start by checking your current credit score from a reliable credit bureau. A higher score increases your chances of approval and may offer better terms. If your score is low, take steps to improve it before applying. Regularly monitoring your credit helps you stay on top of your financial health.

3. Pay Down Existing Debt

Reducing your existing debt can significantly improve your Care Credit approval odds. High levels of debt can negatively impact your credit score and your perceived ability to manage new credit. Focus on paying off credit card balances and other loans. Creating a budget to manage and reduce debt is a smart strategy. Lower debt levels signal responsible financial behavior to lenders.

4. Avoid Applying for Multiple Credit Accounts

Avoid Applying for Multiple Credit Accounts

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Multiple credit applications within a short period can hurt your credit score. Each application results in a hard inquiry, which can lower your score and raise red flags for lenders. Instead, space out your credit applications and focus on improving your overall financial profile. By minimizing new credit requests, you present yourself as a less risky borrower. Patience is key in the credit approval process.

5. Ensure Your Credit Report is Accurate

Errors on your credit report can negatively affect your Care Credit approval odds. Regularly review your credit report for any inaccuracies or outdated information. Dispute any errors you find with the credit bureau to ensure your report reflects your true financial standing. An accurate credit report enhances your credibility as a borrower. It’s a simple yet effective way to boost your approval chances.

6. Maintain a Stable Income

Lenders favor applicants with a stable and reliable income. Ensure you have a consistent income stream before applying for Care Credit. If possible, increase your income through additional employment or freelance work. Providing proof of stable income can significantly improve your approval odds. It demonstrates your ability to repay the borrowed amount.

7. Keep Your Credit Utilization Low

Credit utilization refers to the percentage of your available credit that you are using. Aim to keep your utilization below 30% to improve your credit score. High utilization suggests you might be over-relying on credit, which can be a red flag for lenders. Paying down balances and increasing credit limits can help lower your utilization rate. A low utilization rate indicates responsible credit management.

8. Use a Co-Signer

Use a Co-Signer

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If your credit score is not strong enough on its own, consider using a co-signer. A co-signer with a good credit history can enhance your approval odds. Ensure the co-signer understands their responsibility, as they will be liable for the debt if you default. This strategy can provide a safety net for both you and the lender. It’s a valuable option for those with limited credit history.

9. Build a Strong Credit History

A solid credit history will positively impact your Care Credit application. Use existing credit responsibly and make payments on time. Over time, a strong credit history will improve your score and approval odds. Avoid closing old credit accounts, as their history contributes to your credit profile. Consistent, positive credit behavior builds a trustworthy financial reputation.

10. Time Your Application Strategically

Timing can impact your Care Credit approval odds. Apply when your financial situation is stable, and your credit score is at its best. Avoid applying immediately after significant financial changes, such as job loss or large purchases. Strategic timing ensures you present the strongest possible application. It’s all about choosing the right moment to maximize your chances.

Boost Your Care Credit Approval Odds

Boost Your Care Credit Approval Odds

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Improving your Care Credit approval odds involves understanding the factors that influence your creditworthiness. By checking your credit score, managing debt, maintaining a stable income, and strategically timing your application, you can enhance your chances. Employing these tips and tricks ensures you are well-prepared for the Care Credit approval process. With careful planning and responsible financial behavior, you can achieve your healthcare financing goals.

What Is A Hard Inquiry & How Does It Affect Your Credit Score?

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Applying for credit is a common aspect of managing one’s personal finances. However, not many people are aware of the impact that credit inquiries can have on their credit scores.

In this blog post, we’ll discuss the concept of a hard inquiry, its effect on your credit score, and how to minimize its impact.

What Is A Hard Inquiry?

A hard inquiry, also known as a hard credit check or hard pull, occurs when a lender checks your credit report as part of their decision-making process when you apply for credit. In fact, hard inquiries take anywhere from 3 to 7 points off your credit score.

Common examples of situations that trigger a hard inquiry include applying for a credit card, mortgage, auto loan, or personal loan. Lenders use the information on your credit report to assess your creditworthiness and determine whether to approve your credit application. Hard inquiries typically remain on your credit report for two years.

How Hard Inquiries Affect Your Credit Score

Hard inquiries can have a negative impact on your credit score, albeit a relatively small one. According to FICO, hard inquiries account for about 10% of your total credit score. A single hard inquiry can cause your credit score to drop by a few points, but the effect is usually temporary and tends to lessen over time.

Multiple hard inquiries within a short period can be more damaging, as they may signal to lenders that you are experiencing financial difficulties or are seeking new credit irresponsibly.

Rate Shopping And Its Impact On Hard Inquiries

Rate shopping refers to the process of applying for credit with multiple lenders to find the best interest rate or loan terms. While it’s a smart financial move, rate shopping can potentially result in multiple hard inquiries on your credit report.

Fortunately, credit scoring models, like FICO and VantageScore, recognize that rate shopping is a common practice and have built-in provisions to protect consumers.

These models use a process called “deduplication“, which groups together multiple hard inquiries for the same type of credit within a specific time frame (usually 14 to 45 days) and treats them as a single inquiry.

This means that when you’re rate shopping, you should try to complete all applications within a short period to minimize the impact on your credit score.

The Difference Between Hard And Soft Inquiries

It’s essential to differentiate between hard and soft inquiries, as they have different effects on your credit score.

While hard inquiries result from applying for credit and can negatively impact your score, soft inquiries do not affect your credit score.

Soft inquiries occur when you or a third party, such as an employer or a company offering a pre-approved credit card, checks your credit report for reasons unrelated to a credit application.

How To Minimize The Impact Of Hard Inquiries

To protect your credit score from the negative effects of hard inquiries, consider the following tips:

  • Apply for credit only when necessary: Limit the number of hard inquiries by applying for credit only when you genuinely need it.
  • Rate shop within a short period: Complete all loan or credit applications within a 14 to 45-day window to take advantage of deduplication.
  • Maintain good credit habits: Focus on other aspects of your credit score, such as timely payments, low credit utilization, and maintaining a diverse mix of credit accounts.

Conclusion

Hard inquiries are an inevitable part of the credit application process, but understanding their impact on your credit score can help you make better financial decisions. While hard inquiries can temporarily lower your credit score, practicing good credit habits and minimizing the number of inquiries can mitigate their effects.

What Is The Minimum Credit Score Needed For Care Credit

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Tips to Start Building Credit

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Like many people, you may wonder how to start building credit for the first time. It can seem tricky, especially if you don’t know where to start. Credit is a financial status that denotes a person’s or company’s ability to pay their debts.

 

In the most basic sense, building your credit comes down to knowing how to make smart financial decisions to attain financial power. If you’re just starting out in life, it’s important to start building your credit as early as possible. 

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5 Things to Do Before Applying for a Mortgage

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Buying a home of your own is a huge milestone. Many people work towards buying a home for years, renting while they save up money for a downpayment. However, with home prices rising and a nationwide debt crisis, qualifying for the mortgage you need is only getting harder.

Before you go out looking for your dream home, you should try getting preapproved for a mortgage. This will help you determine whether you will be able to get a mortgage and what you will be able to afford.

There are steps you should take before applying for preapproval. Do the following 5 things before applying for a mortgage.

1. Check your credit score

Checking your credit score is the most significant step to take when you want to apply for a mortgage. Your credit score essentially provides an overview of your credit history. If you have struggled to pay back debt in the past or have outstanding debts, your credit score will be low. If you have never had credit before, you will not have a credit score. But if you have had credit, whether credit cards or loans, and paid it back without trouble, you will have a high credit score.

This is definitely a flawed way of looking at someone’s reliability. But it is the biggest factor that banks and other mortgage providers look at when determining whether to give you a mortgage. If your credit score is below 580, you are unlikely to get a mortgage from any provider and will have to work on improving it.

Checking your own credit score before applying is ideal, as hard credit checks carried out by financial institutions can lower your credit score. If your credit score is already low, you can avoid making it worse this way.

What do you do if your credit score is poor? The next step will help you begin to improve it.

2. Pay outstanding debts

Unfortunately, your credit score is not going to improve if you still have not paid the debts that caused it to drop in the first place. As such, you will need to pay for each debt that is on your credit record. If you don’t have the funds to do so, you will need to save up before beginning to rebuild your credit score.

There are options such as debt consolidation, which is when you take out a single new loan to pay off old loans. However, do your research before agreeing to a debt consolidation loan. If you do find a loan with a reasonable interest rate and you have no other way of paying your debts, it may give you a fresh start which helps you rebuild your credit score.

3. Don’t apply for credit for a full year

Once you have taken care of your outstanding debts, you will need to be very careful with your credit. In order to get your credit score to a better place, you should avoid applying for any credit for at least a year. This may be difficult if you are finding money tight, but it is necessary if you want to qualify for a mortgage.

Taking this time also gives you the opportunity to save more towards a downpayment. The bigger your downpayment is, the better rates and terms you will get on a mortgage.

4. Compare mortgage lenders

Once you have the credit score necessary to get a mortgage, you should compare the different lenders. These may include banks and private lenders, each of which provide various options. The most common mortgage is a thirty-year term, and that is what you will most likely be approved for.

Choose the 3 options with the best reviews and which will accept your credit score.

5. Apply for preapproval

Now it is time to apply to be preapproved for a mortgage. Applying to too many mortgage providers is not a good idea as it can have an impact on your credit score. However, you should get more quotes than just the one. Apply to your 3 top providers and wait for their quotes.

They will each offer you a specific amount with a specific annual percentage rate (APR). If one is lower than the others, use their offer to negotiate. Many banks and providers will lower their rates to get your business. It is important that you have a good idea of the current average rate for 30-year mortgages, so that you know what you are aiming for.

Getting preapproved for a mortgage is a big step towards owning your new home. The next step is looking within your price range and going to see different homes to choose the perfect one for you and your family.

Applying for a Mortgage

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There’s always talk about home-buying and mortgages, but with interest rates being at all-time lows over the past few years, I feel like the talk about those things have picked up. Not only that, interest rates are likely going up this year so people are trying to get in before it’s too late. In this post, I want to talk about mortgages, how they work, and what happens when applying for a mortgage.

What’s a mortgage?

A mortgage is a loan you get from the bank or another lender to buy a house. When you submit an offer to buy a house, you’ll apply for a mortgage, and it’s a very involved process. More on that later.

In a mortgage, you’ll have options for what your term is. Your typical options are 15-year, 20-year, and 30-year.

You’ll also have to make a down payment. Current trends show that a lower down payment is pretty common. Depending on the type of loan, you can put down 3+%. And how much you put down matters. If you put down less than 20%, you’ll have to pay Primary Mortgage Insurance (PMI).

Here are the pieces of your typical mortgage payment – principal, interest, taxes and insurance, and PMI (if applicable). Taxes and insurance are commonly put in an escrow account and paid when they’re due by the lender.

Mortgage application process

From application to closing, it’s about 45-60 days. During that period, you’ll go through underwriting. In underwriting, they’ll have you submit documentation to confirm your credit report, annual income, current assets and liabilities, employment information, prior tax returns, among other things.

After you’ve cleared underwriting and they’ve confirmed everything, you’ll head to closing. At closing, you’ll sign a lot of papers. You’ll likely need to bring your checkbook with you as well.

There are closing costs associated with your mortgage. Some of these can be added to your total mortgage and some of them need to be paid. Closing costs are normally 3%-6% of the total mortgage and can include real estate commissions, taxes, insurance premiums, title fees, and record filing fees.

And if you’re buying, you’ll also need to write a check for the down payment.

Who gets a mortgage?

There is a slough of factors you need to meet when applying for a mortgage. Credit score matters. Usually, you’ll need at least a 620 credit score (all else being equal) to get a mortgage. Though the better the credit score, the better interest rate you’ll get.

The debt to income ratio needs to be under 50%. The lower the debt to income ratio (all else being equal) the more you can afford. If you have a 45% debt to income ratio and can afford a $250,000 mortgage, you’d probably be able to afford a $300,000 if your debt to income ratio is 25% (this is just an example, I didn’t do the math on this).

Condition of the home. With an FHA mortgage, they are a little pickier on the condition of your home. Usually, it’s just the outside of the home they’re picky with. Chipped paint is a typical thing they take issue with, so just be aware of that.

Applying for a mortgage is necessary for most people so it’s important you understand how they work.

Related reading:

Understanding 15-Year vs. 30-Year Mortgages in the USA

What to do when you’re one month behind on your mortgage

Why Financial Literacy is Important

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

How to Prep your Finances Before you Quit your Job

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There are a lot of jobs open right now. Maybe you’re not particularly happy in your current role so you’re looking for other opportunities. Before you leave, you need to make sure you have your affairs in order. Here’s how to prep your finances before you quit your job.

Some things to make note of first.

Plan Ahead

If you want to quit, but don’t have anything lined up yet, get that process started ASAP. There may be a plethora of jobs available right now, but that doesn’t mean you’re going to get one right away.

Ideally, you’ll have an accepted job offer before you quit your current job, but that won’t apply to everyone.

You could be leaving a hostile work environment, you could have a bad work/life balance, or you’d like to explore different opportunities.

That’s why you must do your best to always be prepared because you never know what is going to happen. You can’t predict the future.

Before you quit your job, here’s what you have to do.

Have Money Saved

Make sure you have money saved. You truly don’t know how long it’s going to take to find another job. That’s why I say you should have one lined up before you quit your current job. That’s also why the common advice is to have 3-6 months of living expenses saved in case you lose your job.

It’s also important to see what’s out there. As I mentioned in the beginning, there are a lot of jobs available, but that doesn’t mean you’re going to find a better one. Do your research.

Prep Your Finances

If you want to be able to have less liquid money available, work on your expenses. Cut down where you can. If you’re servicing debt, get it paid off so you don’t have that liability sitting out there. If you don’t have any liabilities, you remove the chance that you’ll miss a payment (which is bad for your credit score). Your credit score is important in today’s economy, especially when looking for a job.

Back-Up Plan

Whether you are exploring a different field entirely or looking for a better role in your current industry, it’s a good idea to have something to fall back on. Even with a record number of job offerings, the job market is still unpredictable. Make sure you have a contingency job picked out that matches your skillset and expertise just in case the role you’re pursuing doesn’t work out.

Make Money in the Meantime

Learn how to make money…quickly. If the job hunt is taking longer than you expected, find a way to supplement the income you lost. There are several ways to hustle your way into a wage nowadays. Uber, Lyft, Instacart, UpWork, Fiverr, and more. There are plenty of companies that’ll hire you as a contractor. If you’re making money, that could enable you to be very picky on the job you take.

Health Insurance

Last thing. Don’t forget about healthcare costs. If you get benefits from your current job, figure out how/if you’re going to get health insurance while you are out of work. Short-term plans might meet a need if you’re just looking for disaster coverage, but if you’re someone that requires ongoing medical care, there’s probably something else that’ll meet your needs better.

Prep your finances BEFORE you make a move.

Related reading:

Can an Employer Charge you Fees to Turn Over your 401(k) After you Quit your Job?

Why Financial Literacy is Important

Everything you Need to Know to Set Up Your Emergency Fund

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Here Is What To Do If You Have Debt In Arrears

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This article is a response to a reader’s question about paying off debt on an irregular income. They write:

Can you advise me how to manage to settle my absa loan & credit card because they are in arrears

At my work I earn with commission , sometimes I didn’t earn.

Here is my answer:

Being in debt is a challenge. It takes away money you could use for more productive things. It’s even more difficult when you’ve missed payments and your debt is now in collections. If that’s you, here are some tips to help you settle your debt that’s in arrears.

Pay down debt

Utilize some debt repayment strategies.

Debt snowball – pay your smallest balance first while making minimum payments to your other debts. When you pay off your smallest balance, move on to the next smallest balance. As you get rid of debts, you’ll be able to make larger payments to the following debt.

Debt avalanche – pay your highest interest rate first. Similar strategy as the “snowball”. Once your highest interest rate debt is eliminated, pay as much as you can towards the debt with the next highest interest rate.

Use retirement funds to pay off your debt. You’ll likely, depending on your age, pay a 10% tax penalty, however (if you’re under 59 1/2). Do you have any cash accumulated in a whole life insurance policy? Use that cash value to pay off your debts

Negotiate

How much, in terms of dollars, can you pay to your creditors as a settlement? Figure out what that number is before you start contacting creditors.

It may take a couple of phone calls, so don’t get discouraged. If you don’t like what you’re hearing from the representative you’re talking to, try and get a hold of a different one. Remember the dollar amount you can pay and don’t go over that amount. If you can pay 50% of what you owe, start with an offer to pay 30%. The creditor will counteroffer and hopefully, the agreed amount is 50% or lower.

Make sure you’re clearly communicating the financial hardship you’re experiencing that put you behind on your debts. Getting sympathy from a representative could help you! Get any settlement or repayment plan in writing as soon as possible.

Make sure you’re speaking to your creditors, not collections agencies. Collections agencies will take a settlement amount and sell whatever is left to another agency. Before you’ll know it, they’ll be after you again. Speak to the creditor you initially owed. Also, be prepared to pay taxes on the forgiven amount.

Bankruptcy

Nobody likes to think about it and it would be a very difficult decision, but it might be one to strongly consider if you want to settle your debt.

If you don’t have luck with negotiations, you might have to consider bankruptcy. There are generally two options – Chapter 7 and Chapter 13. Chapter 7 clears all of your debts. Chapter 13 is more of a reorganization.

Check credit reports

Clarify with the credit reporting agencies how things were settled. Clean up the report and it could help your score a little. Late payments and charge-offs stay on your credit report for 7 years. Debts in collections stay on your credit report for 180 days.

Debt settlement is about commitment. There are penalties if you miss ONE payment of your agreed-upon settlement, so don’t miss!

One more thing. Know your rights. There are several things collectors can’t do:

  • They can’t threaten you
  • They can’t shame you
  • They can’t force you to repay your debt
  • They can’t falsify their identity to trick you
  • They can’t harass you

It’s a tough road, but getting out of debt is paramount for your psyche and your financial success. Utilize strategies to pay down debt. Speak with your creditors about negotiating. If negotiation doesn’t work, consider bankruptcy. Once you settle your debt, review your credit report and dispute errors.

Related reading:

What you need to know about bankruptcy

Diving deep into debt

How to improve your finances on a low income

What to do about debt collectors

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com