How Does Credit Monitoring Really Work? A credit monitoring service will continually monitor your credit files for any changes. When a significant change does occur, you’ll be alerted via email or text. By knowing what’s happening on your credit reports you’ll be able to help prevent identity theft. In fact, the FTC recommends close monitoring of your credit reports as one of the best methods to detect identity theft. Most credit monitoring services, like myFico, also give you free credit scores and credit reports, plus explanations of what factors are helping or hurting your creditworthiness.
There are a number of companies offering comprehensive credit report monitoring service, but myFICO is one of the very few to monitor your actual three-bureau FICO credit scores, which is used in about 90% of credit inquiries related to applying for a loan or new line of credit. Although more expensive than most of its competition, myFICO will send you updates anytime your credit scores change. This is a great feature, as it allows you to keep a constant pulse on your financial health.
myFICO also includes a wide variety of tools to monitor your credit reports, such as financial calculators. With three-bureau monitoring and ongoing score updates, myFICO offers a rarity with your actual FICO scores, which is a huge plus. I highly recommend myFICO as do many of my clients who have used their services.
Credit Sesame enables you to view your credit score and monitor important changes to your credit report.
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You probably know you have bad credit because you’ve previously applied for a credit card, loan, or other credit-based service and have been denied. However, the question remains: Can I Get A Credit Card Even With A Low Credit Score? Yes You can!
If you haven’t already, check your credit score to see where you stand exactly.
You may receive a credit score automatically in the mail after being denied credit if your credit score was the reason that you were denied. Otherwise, you can obtain your credit score directly from via myFICO.com. Alternatively, you can obtain free versions of your credit score from CreditSesame.com.
What to Watch Out For
Beware of fee harvester, or subprime credit cards, that charge high upfront fees which take up up most of your credit limit. Though Federal law limits the amount of fees to 25% of the credit limit, at least one subprime credit card issuer has gotten around the law by assessing a $90 fee before the credit card is ever issued. The First Premier Bank Gold MasterCard is an example of a credit card to stay away from.
The Bad Credit Card Isn’t Forever
Credit cards for people with bad credit don’t have the most attractive credit card terms. Annual fees, high interest rates, low credit limits, and sometimes poor customer service are among the features you’ll have to deal with, but just for a short time. Don’t expect this temporary credit card situation to be perfect. Your goal is to pay your bill on time and improve your credit so you can qualify for something better, which can be done in about 12 to 18 months if you’re responsible with your credit. Start improving your credit score today. Click on the link below:
Choosing a Credit Counselor:
Living paycheck to paycheck? Worried about debt collectors? Can’t seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may be considering the services of a credit counselor.
Most reputable credit counselors are non-profit and offer services at local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
But be aware that “non-profit” status doesn’t guarantee that services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which they made hide; others might urge their clients to make “voluntary” contributions that can cause more debt.
Choosing a Credit Counseling Organization
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in consumer credit, money and debt management, and budgeting. They discuss your entire financial situation with you, and help you develop a personalized plan to deal with your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn’t do that, consider it a red flag and go elsewhere for help.
Once you’ve got a list of counseling agencies you might do business with, check each one out with your state Attorney General and local consumer protection agency. They can tell you if consumers have filed complaints about any one of them. (If there are no complaints about them, don’t consider it a guarantee that they’re legitimate.) The United States Trustee Program also keeps a list of credit counseling agencies approved to provide pre-bankruptcy counseling. After you’ve done your background investigation, you will want to interview the final “candidates.”
Questions to Ask
Here are some questions to ask to help you find the best counselor for you.
What services do you offer? Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.
Do you offer information? Are educational materials available for free? Avoid organizations that charge for information.
In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
What are your fees? Are there set-up and/or monthly fees? Get a specific price quote in writing.
What if I can’t afford to pay your fees or make contributions? If an organization won’t help you because you can’t afford to pay, look elsewhere for help.
Will I have a formal written agreement or contract with you? Don’t sign anything without reading it first. Make sure all verbal promises are in writing.
Are you licensed to offer your services in my state?
What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, by whom? If not, how are they trained? Try to use an organization whose counselors are trained by a non-affiliated party.
What assurance do I have that information about me (including my address, phone number, and financial information) will be kept confidential and secure?
How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization? If the answer is yes, consider it a red flag and go elsewhere for help.
Fraudulent Debt Relief Companies
Numerous companies promise cash-strapped consumers that they will negotiate with credit card companies to lower their balances. Often these companies fail to perform.
These companies pocket their fees and leave consumers even further in debt, with wrecked credit ratings, and facing the possibility of bankruptcy. Additionally, many of these companies charge fees and expenses that are excessive and exceed the amount permitted by state and federal law. These are companies I would stay away from. Consider the companies recommended on this website.
For example, Kershaw, Cutter & Ratinoff investigates companies they receive complaints of fraudulent activities. Among the companies they have investigated are:
Freedom Debt Relief
American Debt Foundation, Inc.
American Financial Service
Consumer Debt Solutions
Credit Answers L.L.C.
Debt Remedy Solutions, L.L.C.
Debt Settlement America
Debt Settlement USA
DMB Financial L.L.C.
New Era Debt Solutions
New Horizons Debt Relief, Inc.
Preferred Financial Services, Inc.
U.S. Financial Management, Inc., also known as My Debt Negotiation
Do your homework
Facing mounting bills can be frightening, but getting debt relief is not a decision that should be based on hearing a radio commercial or getting a sales call. You want to find an organization that will design a debt relief plan specifically for you.
Shop around. Compare a couple of services and get a feel for how they operate. The credit counselor should spend at least 20 to 30 minutes with you in order to get a complete picture of your finances. If they don’t do that, you’re not really getting any counseling.
Ask a lot of questions and get those answers in writing. Find out about the fees. If the agency is vague or reluctant to talk about fees, go someplace else.
Don’t rely on names or the claim of a non-profit status. Check them out with the Better Business Bureau or your local consumer protection office. First try the resources recommended on this website. These are companies that my clients have had good results with over the past ten years. Let me know your experiences. Contact me if you have any questions. I’m here to help you! Sign up for my latest email alerts.
The majority, or 56 percent, of consumers have subprime credit scores, according to a report released by the Corporation for Enterprise Development (CFED), a nonprofit that advocates for policy changes to help low and moderate-income households. As a result, these consumers are often locked out of the lending markets. And if they are borrowing, chances are they’re missing out on the lowest rates being offered to consumers with stronger credit.
“There are millions of Americans who are being excluded from the financial mainstream,” says Jennifer Brooks, director of state and local policy at CFED and lead author of the report. “They’re relegated to using fringe, often high cost financial products that trap them in a cycle of debt.”
Credit experts say the report is a reminder that even as many Americans are returning to work and earning steady paychecks for the first time in a while, repairing credit takes time. Late payments and delinquent accounts that are sent to collections, such as defaulted credit cards or a foreclosure, can stay on your credit report for up to seven years. Bankruptcy filings can stay on there for up to 10 years.
“In the world of consumer credit scoring, if you mess up, it’s a seven to 10 year penalty,” says John Ulzheimer, president of consumer education at CreditSeseme credit management Web site. Go to CreditSesame now and get started fixing your bad credit rating.
Interest rates on credit cards are typically not fixed, so they’re especially vulnerable to changes in the federal funds rate.That means when the Fed’s raise interest rates and you are carrying credit card debt, you can probably expect your interest rate — and also your minimum payment — to rise. That will make it harder to reduce your debt.
But there are moves you can make to take the sting out of climbing credit card interest.
Reducing your credit card debt aggressively is a good idea no matter what rates do. Re-evaluate your budget to see if you can free up any cash to pay down your credit card balances, and think about whether you can increase your income, even temporarily.
As interest rates rise, make sure you’re making at least the minimum payments on time, on every card. This will help strengthen your credit score over time, which will make it easier to qualify for lower-interest loans.
Remember, any effects a rate hike may have on interest-rates in the long-term can be mitigated by a good credit score. Good credit generally entitles you to the best terms and conditions on new loans and can be handy in potentially negotiating new interest rates on certain old ones, like a credit card. You can see where your credit stands by viewing your credit score on Myfico.com.
Here is a another way on how to complain about errors on your credit report.
The Consumer Financial Protection Bureau is another way on how to complain about errors on your credit report. The CFPB is now accepting complaints if you have been ignored by Experian, Equifax or Transunion over errors on your credit report.
The Consumer Financial Protection Bureau can assist with the following complaints:
Incorrect information on your credit report
Improper use of your credit report
Being unable to get a copy of your credit score or file
Problems with credit monitoring or identify protection services
You first have to use the credit report agency’s official process for disputing an error on your report.
The Consumer Financial Protection Bureau is cracking down on already illegal practices used by debt collectors too.
Don’t hesitate to use this service if it becomes necessary.