Do You Have Too Many Debts?

Credit rating has the same, if not greater, degree of significance as do other aspects related to credit cards. For each time you use your card, it is noted by the provider. This enables them to sent accurate statements but is also used to create a picture of your payments over a period of time and if you have exceeded your limit. This information is circulated to the credit bureaus and your credit rating is decided. The rating is adjusted when necessary on a regular basis. Other credit providers can access this information and so can you.

Why is a credit rating important? How do companies use the information in the credit rating? Those institutions that supply credit rely upon credit ratings to determine whether a person is deserving of credit. This is the first thing that any of these institutions will look at when you apply for a mortgage or credit card or car loan. People with good credit ratings will have no problems obtaining credit, but a bad credit rating may mean that your application is declined or you may be hit with higher interest rates, receive less than what you had applied for or very restrictive terms and conditions. A bad credit rating may prevent you from obtaining more credit cards or restrict you to a debit card. This basically means that you can only use the money you have in your account, or sometimes you will only be allowed to access 70 - 80 % of the amount.

You credit rating can even influence a potential employer. Some organizations will examine potential employees’ credit ratings to get an idea if you are a responsible person or not. And you thought it was just about getting a loan!

Obtaining and maintaining a good credit rating is not that hard - you just need to be firm with yourself and make sure that the bills are paid on time.

It is all too easy to get into the mindset of “credit card = free money”, when it is obviously just borrowed money. If you want to change this, you have to resist the temptation to use your credit card for “impulse” purchases. Use cash whenever you can and reduce the number of times you pull out the little plastic card. Ignore “last time” or “special” offers that encourage the use of the card. This clever little marketing tactic draws in naive people - “last time” is rarely actually the last time this sort of offer is made. Try to keep the amount you have used of your credit limit to below 70 - 80%. Bad credit ratings often result from repeated “over the limit” spending.

Make sure that you pay your bills on time. This leads to bad credit rating, further charges and increased interest payments and it will also ruin your plans of increasing credit scores. Keep track of the due dates for your accounts and check with the provider if a statement does not arrive one month. Keep a record of these dates in your diary and ensure that each account is paid on or before the date it is due. People who have a regular income may find the convenience of direct debit is useful - the bill gets paid automatically, taking the stress away from you.

Being in debt is stressful and frustrating. Sometimes people find themselves buried so deep they feel desperate and apply for more credit or take out yet another loan to pay off the debt they already have. This is not always a wise move. However, there are some ways to obtain financing that truly can help a person dig themselves out of debt. By obtaining a debt consolidation loan secured by a type of collateral, the debtor can turn multiple debts into one debt which may be easier to manage.

How to Go About It

The options are practically endless when considering debt consolidation. There are companies that specialize in debt consolidation in almost all areas. However, if you are unable to locate one, the internet has a wealth of information on the subject. By doing some simple searching on line you can find the answers to any question you may have regarding debt consolidation. The methods for obtaining such a loan are simple and the information is easy to attain.

What Does Debt Consolidation Mean?

Debt consolidation is simple. It is the taking of multiple debts and turning them into one. It means only one payment, which is generally much lower than the combined total of your multiple payments. It also means a great savings in interest paid per month. Your credit rating is a factor which determines whether you will qualify for a debt consolidation loan. If you the amount of debt you have is substantial, or if you have a low credit rating, you may want to look into a debt consolidation loan secured by collateral.

Overwhelmed by your debts? Consolidate and save! Start with a free consultation with Credit.com

Credit Scores and Debt

Being in debt affects your credit rating. If you find yourself in serious debt it may be that your credit scores are also quite low and lending institutions may not approve you for a loan. If that is the case, a secured loan will help you consolidate you debt despite your poor credit rating.

What Is Collateral?

A debt consolidation loan can be secured by various different valuable assets, such as your automobile, your home, furniture and other items of high value. What collateral a lender will accept depends greatly on how much debt you have and what your credit rating is. The lender will review your assets and tell you what they are willing to accept as security on your loan.

NCO Financial is a collection agency. They collect for retail, financial services, healthcare and other industries.

They have been in business since 1926. They do both first party and third party collections.

They are headquartered in Horsham, Pennsylvania. They currently have over 140 operation facilities spread out over 9 countries.

They claim to be customer oriented and committed to integrity, teamwork and quality.

NCO Financial has the authority to do credit reporting. Meaning they can make negative listings on your credit report. If this happens your credit score will be lowered.

You can have a listing from NCO Financial removed. There are two ways of accomplishing this.

1. Dispute the negative listing with the credit bureaus.

This is done yourself by sending a dispute letter to the credit bureaus or you can hire a credit repair firm to handle the dispute process on your behalf.

If you decide to dispute the listing yourself you must send a dispute letter to each credit bureau. The dispute letter says that you are disputing the listing because the information is wrong, you have never paid late, it is not your account, etcetera.

2. You can pay NCO Financial. I would recommend disputing the listing first and then if that is unsuccessful consider paying.

You do not have to pay the full balance with your settlement. I would suggest starting your offer at 50% of the balance of the outstanding debt.

Make sure to have NCO Financial agree in writing to remove the negative listing in exchange for your payment. If you do not do this the negative listing will stay on your credit report and will still hurt your credit score.

You should also be aware that NCO Financial may not be the only company reporting a negative listing on your credit report for this account. The creditor may also have reported this account as a negative listing too.

It is common for collection agencies to sell accounts that they are unsuccessful collecting on. Thus NCO may have sold your account to another collection agency that has created a negative listing on your credit report too.

If you have the same account reported more than once on your credit report then I would suggest consulting with a professional credit repair firm because making payment to one company will not remove all the negative listings from your credit report.

If the debt is accurate and you make the decision to settle the debt do not pay the full balance. Collection agencies buy outstanding debt for just pennies on the dollar. Thus if you pay the full balance you will be giving the collection agency a lot of money that you do not have to.

Be aware that NCO only has the authority to remove a negative listing that they have created. They will not be able to remove any other listings that have been created by other companies even if it is for the same debt.

I strongly recommend keeping all communication with NCO in writing. This way if the agreement you have made is breached you have written proof of the original settlement agreement.

In sum, dispute the listing first and if unsuccessful then make arrangements to settle your account. Get in writing that the listing will be removed from your credit report in exchange for payment.