On the cusp of a new year the "New You" bug begins to bite! Writing checklists, goals, and plans for the weeks, months, and even years to come is almost an all consuming task at this pivotal time of year. The urge to purge settles in and we want to clean house. Out with the old and in with the new! This sentiment applies to our homes, our jobs, our relationships, our fitness, and our finances. So how can we begin to clean up our credit and position ourselves for the best in the new year? Great question. Here are just a few tips to help get your new year started right.
Trending Topics
Having LuxuriousCREDIT is so much more than simply cancelling a few credit cards or settling an overdrawn account. Staying alert and aware of topics that are trending in the finance world is a great way to create and keep LuxuriousCREDIT. Visiting this blog was one great way to stay current with weekly posts and articles pertaining to YOUR credit and how to keep it Luxurious. You can also click here for another great resource created by the federal government to keep you up to date on trends in the finance world.
Clean Up your Credit
Let's face it, in our economy, creditors are not eager to write off debt. They know that, with the proper motivation, many customers may actually be able to come up with the resources and commit to paying off their debts under the right circumstances. Why not use this to your advantage in the new year?! If you care about your credit history and FICO score, don’t wait six months or more until the account has been charged off. A charge off is a note that is reported to credit bureaus indicating that the creditor has very little confidence that you will ever pay the debt. This will hurt your credit score even more and blemish your credit history.
Know What You Want
Before you contact your creditors, take the time to think about what you want from them. Use this as an opportunity to negotiate the things you want before agreeing to the final settlement amount. Instead of waiting, take the initiative sooner than later to contact your creditor and make arrangements to pay the debt. Even when requesting a debt settlement, you may still be able to pay in increments or installments, which is even more accommodating to you! Not only will you end up paying less than what you owe, but you may also have the benefit of paying a little at a time.
There Is Proof
Standard industry practice is for calls of this nature to be recorded, particularly when there is an attempt to collect a debt. Know that there is proof of what you have requested the creditor to agree to do. Make sure that creditors agree to stop any further collection efforts including emails, letters, and phone calls that can be flat out annoying! Find out exactly how the settlement will ultimately be reflected on your credit report and make sure it is.
Contacting your creditor and making a payment arrangement or debt settlement agreement is the first step. However, it is important to note that what you don’t know can hurt you. Your creditor is unlikely to detail the adverse effect that settling will have on your FICO score. While the creditor is happier to accept some payment than no payment at all, they are still likely to list the account as “settled” or paid less than the amount owed. This indicates to future lenders that you may be somewhat of a credit risk and is a red flag on your credit report. Ultimately this can cost you more in less affordable interest rates and difficulty being financed in the future.
Follow Up
Once you pay a debt settlement, check your report after 30, 60, 90 days to ensure that the settlement is reported according to the terms that were agreed upon. Creditors are required, by law, to report debt settlements. Unfortunately, in some instances, they fail to do so resulting in accounts that report as delinquent indefinitely.Debt settlement is one of many ways to manage and resolve debt that has become difficult or impossible to pay. However, you should never feel as though you don’t have options. LuxuriousCREDIT is accessible to everyone, with just a little help.