5 Concrete Ways That Your Credit Score Impacts Your Life

 

There are so many exciting reasons to get out of debt: for example, it can help you free up your personal income, it can reduce stress, and it can help you plan for a more stable future. One benefit of debt freedom that many people don’t even consider until they have gotten out of debt is the impact on their credit score. Though this seemingly abstract number might not always seem like the biggest priority when you are struggling to put food on the table and make ends meet, the truth is that your credit score plays a huge role in many important aspects of your life. Here are 5 concrete reasons that you should care about your credit score:

 

1. Land the dream job. Although not everyone realizes it, employers are legally entitled to view your credit score as part of their pre-employment background check--and many do. Having a low credit score could make you look unstable (or, worse, untrustworthy) which is why having a good score is very important.
2. Buy the car. If you’re hoping to finance the purchase of a car, you are going to need a solid credit score. If not, you could be stuck driving a beater--or even taking the bus.
3. Own your own house. As you can probably imagine, if a low credit score is enough to stop you from buying a car, it can also stop you from buying a home. Even renting an apartment generally requires a credit check!
4. Start a business. One final category of financing that many people seek at some point or another during their lives: business funding. Without a good credit score, it is going to be very difficult to get that new idea off the ground.
5. Pay less interest. If you do manage to get approved for a car, house, or business loan, the amount of interest you pay will be contingent on your credit score.

 

Ready to get out of debt and begin rebuilding your credit score and your life? Visit Madison Monroe and Associates online today to learn how! www.madisonandmonroe.com or simply give us a call 877-346-2797 we are here to help.  

 

The Student Debt Crisis

According to an article published recently in MarketWatch, nearly 70% of bachelor’s degree recipients leave school with debt. The student debt grand total? $1.2 trillion dollars, the average indebted college student between the ages of 20 and 30 now makes a monthly payment of roughly $350; and the average debt that students graduate with continues to rise. In the recent graduating class of 2016, the average student owed over 37,000 dollars.

 

Negative impact

The prevalence of student debt is having enormous impact on thousands of individual lives and our society as a whole. As the aforementioned MarketWatch report points out: “student loan debt may be preventing Americans from making the kinds of big purchases that drive economic growth, like house and cars, and reaching other milestones, such as having the ability to save for retirement or move out of mom and dad’s basement.”  If these words sound painfully close to your own reality, then it may be time to take action and take control of your life.

 

What can be done?

Ask a hundred people what can be done on a political or society-wide level about this problem, and you’re likely to get a hundred different answers. However, on an individual level, the answers are a bit more clear, though still far from simple or easy. First of all, students should take every possible step to reduce the amount of debt that they take on over the course of their studies--this means applying to scholarships, considering beginning at a community college, and possibly living with parents or relatives until their degree is earned. For students who find themselves currently in debt, the key is to pay this debt as quickly as possible before interest piles up and drastically increases their amount owed. This must be accomplished through a combination of careful financial management, aggressive debt payment, and, if necessary, a debt reduction service such as Madison Monroe and Associates. Visit us online today for more information www.madisonandmonroe.com or simply give us a call (877) 346-2797 we are here to help.

How to Handle Phone Calls from Debt Collectors

Receiving unsolicited phone calls from debt collectors can be intimidating--but it’s not the end of the world. If you are being contacted by debt collectors, then we highly recommend following these simple tips in order to keep yourself in the best possible position both financially and legally.

 

• Don’t make promises.  Debt collectors are calling you to pressure you: any agreement that you make should be made after careful consideration, and after taking the time to consult with your lawyer and with other people you trust. Never make a spur of the moment promise, as this can complicate your situation.
• Avoid “good faith” payments. One of the oldest tricks in the debt collector book is guilting debtors into making small “good faith” payments. This extends the statute of limitations for your debt, thus robbing you of one of your biggest bargaining chips!
• Don’t hide. It can be tempting to simply ignore calls from debtors, but this is a big mistake: it can lead them to call your employer or your relatives. (More about this later!)
• Keep a call log. Note the time of each call you receive, as well as the exact nature of the debt you are being contacted about.
• Don’t get angry. If your case goes to court, transcripts may come to light, and any outburst on your part will only make you look bad and hurt your case.
• Tell your collector if you believe that the debt is not valid. If you do, they are legally obligated to prove the debt’s validity before contacting you again. If you are right, the odds are good that they will simply give up and focus on more productive cases.
• Tell the collector not to contact 3rd parties. They are obligated to listen to you, and this can save you a great deal of personal and/or professional embarrassment. If you’d like, you can even request that you not be contacted anymore--although this may make it more difficult to keep track of your debt.

 

If debt has taken over your life, you don’t need to suffer. Contact Madison Monroe and Associates today to retake control. (877) 346-2797 or visit our website www.madisonandmonroe.com

 

Reducing Credit Card Debt

Reducing and eventually paying off credit card debt is a challenging goal, but as anyone who has gone through the process will tell you, the freedom and peace of mind that come with regaining financial control are completely worth it. In this article, we will cover a few of the most important steps that you should take if you are serious about reducing credit card debt, as well as a brief overview of how services such as those offered here at Madison Monroe and Associates can help you achieve your goals.

 

• Assess your situation. The first step you need to take is to find out exactly how much debt you have. A great deal of people who are in serious debt do not know their exact situation, oftentimes because by this point they are already dealing with several credit cards and perhaps several other forms of debt as well. As with many problems, however, the first step toward recovery is a bit of brutal honesty--so sit down with your computer and your bills and figure out how much you owe, and what the interest on each loan is.
• Negotiate a lower rate. Depending on factors such as your credit and the lending philosophy of your creditors, you may be able to negotiate a lower rate on your debt simply by calling your credit card company, explaining your situation, and asking for a reduced rate.
• Track costs. If you have found yourself in debt, it is almost certainly due to the fact that you are spending more than you are making. (Though sudden and unforeseen one time expenses such as medical bills do oftentimes play a role as well.) Take stock of your expenses and make an effort to reduce spending.
• Develop a strategy. The fastest path out of debt is to make the minimum payment on all credit cards except for the card with the highest debt, and to put the remainder of what you can pay into that card.
• Avoid using plastic. Store your credit cards away and don’t use them except in case of a sincere emergency!
• Track your progress and stay motivated! Don’t dwell on your debt, but seeing your progress every once in awhile can be a real confidence booster!
• Consider 3rd party help. A 3rd party debt reduction service such as Madison Monroe and Associates can help you by negotiating lower rates (oftentimes from a stronger position that an individual could) and consolidating your debt into a single, lower payment. We can also help you get on the path toward rebuilding your credit!

The Most Common Forms of Personal Debt (And What You Can Do About It!)

High monthly debt payments feel overwhelming regardless of why they were taken on--but the truth is that each type of debt does have a couple of unique characteristics that are worth examining. In this article, we will give a brief summary of a few of the most common forms of personal debt, and we talk about how such debt can be dealt with.

Credit Card debt. Credit card debt can be very insidious because it tends to creep up slowly on people. When somebody takes out a mortgage, for example, they usually understand: “I am going into a significant amount of debt that I will need to plan for, and this will allow me to purchase a home.” With credit cards, people oftentimes don’t imagine that they will end up in significant debt, instead they tend to think: “I will make this purchase,” or “I will pay for this meal,” but before long all those small debts start to add up.

 

Mortgages. No one purchases a home imagining that they will one day be overwhelmed by their mortgage payments: but changes in employment or in the economy can sometimes lead to this unfortunate situation.

 

Student loans. Student loans are tricky because they tend to have relatively high interest rates, and they cannot be discharged even in bankruptcy. These factors are both due to the lack of collateral: if you purchase a car and fail to make payments, your creditor can repossess and resell your car; if you attend university and then fail to make payments, your creditor cannot repossess and resell your education!

 

Medical debt. Especially for the uninsured and the underinsured, an unexpected accident or illness can result in serious debts that can be very difficult to pay. Huge medical bills can drain your bank account and lower your credit score, so it’s important to take action quickly!

 

IRS/back taxes. For those working in traditional jobs, a portion of your income is held back by your employer and paid directly to the government. For the self employed, however, the situation is a bit more complicated: you are obligated to pay taxes out of your pocket, which means if you were unable to plan ahead you may get stuck owing money that you do not currently have.

 

Payday loans. Payday loans can seem like a good solution to being short on cash, but all too often they result in a downward spiral of debt that accrues at very high interest rates. If you owe money on a payday loan, you need to act fast before interest continues to pile up.

 

Madison Monroe and Associates can help you solve your debt problems. Visit us online today to learn more. www.madisonandmonroe.com

Getting out of debt is still possible

According to a study published by the Pew Charitable Trust, roughly 80% of Americans now find themselves in debt. This debt can be piled on in a plethora of ways. For example, the majority of Americans own credit cards--and falling behind on payments can cause debt to pile up surprisingly fast. Mortgages represent another form of debt that, for the vast majority of working and middle class people, is going to be necessary in order to own a home. Student loans, medical bills, and back taxes can also pile up very quickly, and sometimes this can happen completely unexpectedly. (For example when an unexpected illness forces a hospital stay, or when that job you were planning on beginning upon graduation doesn’t pan out right away.) The point is if you have found yourself in debt, you are not alone!

 

The truth is a healthy level of debt can even be a good thing. Think back to the examples of mortgages and student loans: both of these types of debts can actually enable people to attain dreams such as owning a home or completing college that may have been out of reach without outside funding. So debt in itself can be a valuable tool. (This is precisely why credit is so important.) The problem, of course, is when debt reaches a point where you are struggling to make payments.

 

Once this happens, getting out of debt can seem impossible--and your financial life can become very discouraging. All of your disposable income (and then some) may begin going toward making payments that you still struggle to pay. Debt collectors may begin contacting you and your credit may become so damaged that many financial options that were previously available to you (i.e. getting a credit card, taking out a student loan, etc.) become infeasible. The situation can begin to feel hopeless.

 

We’re here to tell you that hope is not lost. At Madison Monroe and Associates, we have helped countless people reduce their debt by 40 to 60%--and we can do the same for you. Visit us online today to learn more. www.madisonandmonroe.com