The Credit Card Trap

Credit cards can work for you, or against you.

If you're sick of credit cards or have been treated badly by a credit card company, you're likely to want to close that account. While that may seem like the best answer, it's really not. Because closing a line of credit lowers your credit score, which in turn can make it more difficult to get a loan or new credit card.

You could pay the balance and just stop using the card. That way the open line of credit works in your favor without any debt piling on. However, some credit card companies are adding annual fees and inactivity fees, which can ruin that plan.

What it comes down to is knowing your credit to debt ratio. How much outstanding debt do you have in relation to the amount of available credit? The more debt you have, the lower your credit scores, the more risky you appear to other lenders. In the wake of the credit crisis, lenders are paying more attention to credit scores than ever.

Feel like you don't understand what's going on? Need someone to help explain your credit report? United Credit Source helps with all of that. We're walk you through the credit repair process, talk you through understanding your credit report, and help you figure out the best strategy for your credit profile, depending on your goals.

Money & Your Marriage

Money problems are one of the largest reasons couples split up or divorce.

When you or your spouse is in a rough spot over money, communication is the key. It's really hard to admit you've made a mistake or that big changes need to be made. But if you wait too long, matters can spiral out of control.

Turn off the TV, step away from the computer, put down your phone, and sit down and talk with your significant over. Put everything out there. Be completely open and honest. Only together can you truly work to solve a problem.

A hugely helpful tool to solving money isues is to make up a budget. Yes, the B word. It doesn't have to be huge and scary. You can use an online budgeting tool to help you or just grab a piece of paper and write down how much you earn in a month. Then write down every expense you have, including bills, groceries, clothing, insurance, credit & debt,etc. Once you see how much money is coming in versus how much money is going out...well, adjustments will need to be made. But you can do it, and you can do it together.

Get your financial situation under control before it gets too large and out of control...

and before it hurts your marriage irrevocably.

Loan Modifications

Starting June 1, 2010, home owners applying for mortgage modifications will have to provide paperwork upfront to prove they qualify. They will need the following documentation:

1. Two pay stubs

2. An electronic form that allows a servicer to pull up a tax return online

3. A request for modification that includes a hardship affidavit.

The goal of this new process is to decrease time delays and increase the success rate of turning trial modifications into permanent modifications. Around 66,000 homeowners have accepted offers to change from trials to permanent modification programs.

This new program applies to borrowers who live in their homes and whose housing debt expenses are more than 31% of their income. Simplfying the process should make things easier overall.

Under modifications, intrest rates are reduced, then terms of the loan are extended. Homeowners usually have to complete the trial of three months of making payments on time, and then they can enter the permanent phase.

United Credit Source can help you clean up your credit report and help you better qualify for programs like this.

Do you know your rights?

The Fair Credit Reporting Actwas passed in the United States originally in 1970 to regulate collection, distribution, and use of consumer credit information. It is enforced by the US Federal Trade Commission.






Under this act, credit bureaus, such as Experian, Equifax and Transunion, have certain responsibilities:






1. They must provide a consumer with the information about him or her in their files and verify the accuracy of that info.




2. Negative info that has been disputed and removed may not be reinserted without notifying the consumer in writing within five days.




3. The Credit Bureaus may not keep negative info for an excessive period, such as more than seven years for late payments, collections or judgments. The only exceptions are bankruptcies (10 years) and tax liens (seven years from when they were paid).




Also under this act, information furnishers, such as credit card companies, collection agencies, auto financers or mortgage lenders, may only report to a consumer's credit as long as:




1. They provide complete and accurate information.




2. They must investigate disputed info and must respond within 30 days of notice of a dispute.




3. They must inform consumers of negative info that has been or is about to be placed on their credit report within 30 days.






It's important to be proactive in your own life and credit. Let United Credit Source educate you in the restoration process on how credit works as well as gaining a better understanding of your rights. We want to help you regain control of your finances, so that you can live the best quality life there is to offer.

More Bad news About Americans' Debt

Posted originally at Walletpop.com

Jan 5th 2010 by Martha C. White

For a while, it looked as if Americans were getting a better grip on their out-of-control credit card habits. Unfortunately, new data shows that we seem to be falling off the wagon once again.

According to this article in the Wall Street Journal, the rate of credit card charge-offs rose in November from 10% to 10.6% after declining for the past two months, and delinquencies continued a four-month rise, hitting 6.2% in November. Delinquencies are payments that are 30 days or more past due. Charge-offs are balances that the card company writes off as a loss and gives up on (generally, they sell the debt for pennies on the dollar to a third-party debt collector).

Moody's predicts that the charge-off rate will continue rising and eventually peak in the middle of this year. In other words, it's going to get worse before it gets better.

Even more worrisome is data that shows Americans are paying down less of their collective principal than they were just recently. The payment rate fell nearly a full percentage point in November to 16.42%.

This is bad news for delinquent cardholders individually; it's also bad for the economy as a whole. While experts have recently mentioned some encouraging signs like lower unemployment claim filings and small growth in the manufacturing sector, this recovery still has a long way to go.

High rates of unpaid credit card debt affect both consumer spending ability and consumer confidence. Both of these, in turn, directly affect the unemployment rate, since companies won't hire people to make goods or staff stores if they perceive that spending is under siege.

If this sounds like a vicious cycle, it is. While we here at Walletpop hear on a regular basis from readers who have sworn off credit card balances and stick to buying only what they can pay for at the time, there are obviously many Americans still stuck in a downward spiral of debt. Until enough people can get out from under those crushing bills, this debt is going to drag on the nation's economic recovery.

The Ins and Outs of Debt Collection

Do you know your rights?

The Fair Debt Collection Practices Act of 1977 regulates debt collection companies and how they can contact you about unpaid debts and your rights in the process.

Debt collectors cannot contact consumers at inconvenient times, such as before 8am or after 9pm, unless you give them permission.

If debt collectors contact you about a bill you don't think is yours, you can send them a letter asking for written verification that debt is yours. You have 30 days from the time you are contacted to write them.

If you ignore a debt, it you could ultimately find yourself in litigation to enforce collection should the debt be sizable . In Texas, although there is no wage garnishment, your credit scores can lower and you can be denied new credit. That's the whole point of the credit rating system is to give lenders a risk assessment and let them know how you've handled previous credit.

Some states have laws that license and govern debt collection practices. You can check your state attorney general's office to find out the laws in your state.

The Fair Debt Collection Practices Act prohibits harassing, abusive or profane telephone calls. Under this federal law, no one is allowed to threaten to take your home or have you arrested for not paying a bill. They cannot leave voice mail messages on your home phone with details about your debt or call your job and/or relatives and friends about unpaid bills.

You have every right to negotiate a settlement on a debt you owe. You can do this yourself, but be smart about it, getting everything in writing first. It's a good idea to go through a professional, trustworthy, debt settlement company, such as Elite Debt Management, to protect your interests. Your credit report can still report negatively, and there can be federal tax issues to deal with, so find out all you can before doing this on your own.

Filing for bankruptcy does cease all further collection calls and letters, but it's a major step that will negatively impact your credit report for seven to ten years or longer.

Knowing your rights enables you to handle your debts in the best possible manner. United Credit Source has a Credit Specialist Team on hand to answer your questions and give you advice. We want to help you obtain a better financial lifestyle.

United Credit Source

FINANCIAL PRIMER FOR 2010

Let's face the hard facts. 2009 has not been a banner year. In many respects, it has been the year that should not have been. One of the better aspects of 2009 is the wake-up call we all received: It can happen to any of us at any time. None of are immune unless we are prepared. Now that we're awake, let's pay attention. Some of the lessons gleaned from 2009 can provide our outlook into 2010 and beyond. Our maxim should be the same as the Boy Scout motto: "BE PREPARED." Will it be easy? I very much doubt it. But it could be the only thing to save us when the next hammer falls. How do we prepare, you ask? Let's look at some time tested methods that really work. Here they are:

Examine your goals -
What do you want to accomplish and in what timeframe? Financial issues are, at root, decisions about what is important to us and what is not. How we choose to spend our money should reflect matters which are important to our well being and our future, not whim, or fancy, or things to boost our ego. It's always better to be safe than sorry.

Take control - Set up a spending plan or budget -
Develop a plan. Housing, utilities, food and clothing, transportation, medical expense, and monthly bills, should take the priority positions. Discretionary spending should be at the bottom on the list. It is extremely important to make sure our bills get paid on time.

Increase Savings -
Spend less than you earn and put money aside for the rainy day that will eventually come. Wow, what a concept. I can still my mom and dad's voices reverberating around the inside of my head on this one. This is a great place to put your discretionary spending allowance until you have three (3) to six (6) months living expenses set aside as your reserve.

Pay down debt -
With the credit card rules and the banking industry rush to make as many changes to interest rates it is imperative to reduce debt is all areas of your life. Credit card issuers are raising rates, instituting fees, and reducing credit limits. You cannot afford to max out your credit. It will have a serious impact on your credit score and could leave you without the credit line you thought you had. Credit cards can provide an element of security in bad times, but debt itself is inherently destructive. You will never know true freedom without calling a halt to deficit spending. The more debt you have the less options and leverage you have in case of emergencies.

Develop an emergency plan -
Jobs, and income, can end at any time. Plan for how you will eliminate expenses that allow you to continue to make payment on the basic necessities of life while acquiring your next income opportunity.

Be honest with yourself and family -
If you have been impacted by the recession, admit it and quite trying to live like it passed you by, because you will continue to add debt and considerable stress to your lives. Financial matters are the mumber one (1) cause of family strife.

Focus on the long term -
Don't be short sighted. People can get caught up in the hype and react instead of responding to changing conditions. If you have a long term plan, it should serve you well in good times as well difficult times when they come.

United Credit Source