Do you have a very low credit score? Is your credit score hovering around 450-500? If yes, then you should take active steps to increase it gradually. Otherwise, you won’t qualify for any loan in future. Some key tips such as keeping a low credit utilization ratio, managing credit cards responsibly can help you boost your credit score slowly. But are you aware that paying your bill prior to the statement date can help you improve your credit score too? Most likely not! There are several other unknown tips that may help you raise your credit score. Read on to get acquainted with 4 unknown expert tips to increase your credit score.

Tips to boost your credit score

Here are the few unknown tips that may help you boost your credit score:

1. Make periodic payments: Try to make multiple payments on your bills. You should make payments on your bills every week. This will help you lower the credit balance on the bill statement date. In short, it will enable you reduce your credit-utilization ratio and improve your credit score. So, if you make purchases with your credit card everyday, then you must pay the bill by the end of the week.

2. Go for “Pay for Delete” agreement: If your credit account has been assigned to a collection agency, then you can negotiate a pay for delete agreement with them. You can inform the collection agency that that you are ready to pay off the debt in full only on the condition that they would remove the negative item from the credit report. However, you should get the agreement in writing or the collection agency may refuse to delete the item from the credit report after the debt has been fully repaid.

3. Send a Goodwill letter your creditors: Do have only 1-2 negative items on your credit report? If yes, then it is possible to get them removed from your credit report through a Goodwill letter. If you are a responsible consumer who have made 2 late payments on a credit card recently due to some unavoidable circumstances, then you may request your creditors to remove the negative listings purely on goodwill. You can send a Goodwill letter to your lender and request them to delete the bad items from the credit report. Once these listings are wiped out from your credit report, your score will go up. However, if you are always late on your bill payments, then the lenders will not delete the items from your credit report.

4. Avoid short sale: In a short sale, lenders consent to settle the mortgage loan debt for less than the original loan amount. For example, your total loan balance is $350,000. You trade your home for $240,000. This means that the total deficit balance is $110,000. Henceforth, lender will report the deficit amount on your credit report.

The core of the matter is, short sale lowers your credit score by 75-100 points. So, if you are lagging behind your mortgage payments, then you should arrange an alternative payment plan with your lender instead of opting for short sale.

Finally, you should avoid opening several credit accounts simultaneously. If you keep on opening numerous credit accounts every other day, then your credit score may drop by as much as 10 points.

Are you wondering whether or not you’ll get a job with bad credit? Most employees do credit check before interviewing the potential employees. This is why it has become important for the job seekers to have an idea about bad credit and job search. Read along to know more about it.

Bad credit – Can it hamper your job search?

Go through the following lines to gather knowledge on credit and job search:

1. Your credit score is not viewed by employer:
It is true that the employers can view and analyze your credit report. But this does mean that they can also view your credit score. Credit bureaus may send a copy of your credit report to the employers but they will not reveal your credit score to the companies. Credit report offers a snapshot of your credit record to the employers where as credit score reflects your credit risk. This implies that the employers can have a detailed idea about your credit transactions but they will not be able to determine your credit risk accurately.

2. Employers can’t view your report without your permission:

According to the Fair Credit Reporting Act, the employers can’t glance through your credit report without your written permission. As soon as you give your consent, employers can order a copy of your report from the credit bureaus. They can also check your background from other companies where you may have worked in the past. However, these inquiries will not hurt your credit score.

3. Employers check whether you are financially responsible:

Employers prefer to employ those people who are financially responsible. They want their staff to have good money management skills. Your job prospect will not be hampered if you have missed one payment. This is because employers always look for long-term patterns. They will check whether or not you miss payments habitually. If they find out that you are always late on your payments or a judgment order has been issued against you, then they are less likely to recruit you. Employers just don’t like to get into situations where they have to garnish the paycheck of their staff.

4. Employers may give you a chance to defend yourself:

If you don’t allow the employers to check your credit report, then they may reject your job application straightaway. However, if you permit them to go through your credit report, then they may give you a chance to defend yourself. You can explain the circumstances which lead you to incur bad credit. If you can explain your situation convincingly, then the employers may agree to recruit you.

Finally, some states such as Illionois have forbidden the employers to do credit checks of the job seekers. They have taken this decision for the benefit of the job seekers. In the present economic scenario where thousands of people are getting into debt problems or becoming the victims of foreclosure, credit checks are hardly relevant. This is why the state governments of Oregon, Washington, Hawaii, etc. have enacted laws to stop the employers from doing credit checks of the job seekers. However, the employers are allowed to check the credit report of the job seekers in few exceptional circumstances.

The community is coming up with a new section called “Social Answers” where you are can ask and answer questions for free. It is where you ask practical financial questions to get good answers and insights. The section has been designed in a question and answers format so as to build good answers to every question and avoid meaningless discussions. Glance through the article to know more about it.

Social answers – Ask questions and share answers

The new section Social Answers is for the people who want to ask questions and share answers and insights with people. Here people can ask and share questions irrespective of being a community member. So, if you have a query on a finance related topic, then all you need to do is post your question in a suitable category of Social Answers.

For example: If you have question on student loans, then you’ll have to post your query in the “Consolidate student loans” category. Similarly, if you have a debt related question, then write your question in the “Debt problems” category. Once your question is posted, other users will try to come up with a suitable answer.

An interesting feature of Social Answers is the voting rights. If you think that anybody has given a wrong answer to a particular question, then instead of charging that person, you can simply give a negative vote to the answer. You can do it by clicking the downward pointing arrow. If you like an answer, then vote it up by clicking the upward pointing arrow.

Votes play an important part in Social Answers. This is because answers are sorted on the basis of votes. The answer getting the highest number of votes will be the top ranked answer and vice versa.

There is no place for meaningless discussions, fights, abuses, etc. in Social Answers and this is why voting system is being introduced in the section. If you dislike an answer, feel free to give a negative vote. But you can’t comment on an answer or a question. If you are confident that you can give a better answer, feel free to post it. Make sure your answer is original and not another irrelevant question. Otherwise, your answer may be removed by the admin panel.

Finally, Social Answers is at a developing stage right now. The Community is working hard to make it bigger and better. So, keep visiting this blog for latest news and updates on Social Answers. For more information on Social Answers, click here.

It is better to file bankruptcy when you have failed to solve your debt problems in spite of your best efforts. Bankruptcy can hurt your credit score big time. It not only reduces your credit score by 200-250 points but also remains on your credit report for 7-10 years. This is why it is wise to know about the tips that may help you eradicate your debts without filing bankruptcy. Read through the article to gather knowledge on 6 smart and intelligent tips that may help you avoid bankruptcy and solve your debt problems at the same time.

Smart and intelligent tips to avoid bankruptcy

Here are the 6 interesting tips that may help you avoid filing bankruptcy and protect your credit.

1. Analyze your financial situation: Do you have an idea of the total money you spend in a month or a year? If not, then you should gather information on your income, expenses, savings, debts, investments, etc. This will help you make an accurate estimate of your financial situation.

2. Follow a proper budget: After a realistic analysis of your financial situation, you should create a budget and live frugally. Your main aim is to match your income with your monthly expenditures. Budgeting will help you meet your goal. A good budget will also show you the areas where you can potentially save money. You can use the savings to pay back your creditors on time and avoid entangled with debt problems.

3. Get short-term help: If you are stuck in a situation which can have a major impact on your finances, then you can try to get short-term help from your family and friends. This is not the time to feel ashamed. Rather, you need to act smartly and rationally in this kind of a situation. It is much better to get financial help from your friends instead of getting into a serious financial crisis. However, make sure you ask help from those friends who can afford to lend you money for a short-term.

4. Negotiate with your creditors: If you have a small number of creditors, then you can make a realistic deal with your creditors. You can request your creditors to reduce a portion of the debt amount or give you more time to repay the debt. It will be even better if you can convince your creditors to lower the outstanding balances and extend the time period simultaneously.

5. Sell your assets: This may be hard for you but it is wise to sell your assets to repay your debts. The reason is, you’ll need to sell your non-exempt properties when you’ll file Chapter 7 bankruptcy. So, if you can avoid filing bankruptcy by just selling your assets, then you should go for it. It will also help you save your credit score.

6. Quit bad financial habits: Do you visit casinos on every week-end? Do you love playing roulette in your favorite casino? If yes, then you should quit this addiction as early as possible. You should stay away from the casinos even if you are tempted to go there in the hope of making quick money. Gambling can make you bankrupt in a single day. So, exercise self-control and restrict all your impulses to hit the nearest casino.

Finally, if you have got a job recently and are planning to apply for a credit card, then it is better to not implement the idea. You can take out a debit card instead of a credit card. This is because there is less chance of incurring debts when you use a debit card. You can only spend up to the amount available on account. So, there is no possibility of overspending or becoming bankrupt

If you are drowning in debt and are desperately trying to reduce it, then it is quite possible to commit some mistakes without fully understanding the possible implications of them in future. You can get into further financial problems by committing some awful debt reduction mistakes. These mistakes can sabotage your best efforts to reduce your debt burden. This is why it is important to avoid committing some mistakes when you are in the midst of erasing your debts. Have a look at the article to gather knowledge about 5 debt reduction mistakes that you should avoid by all means.

Debt reduction mistakes you must avoid

Go through the following lines to know about 5 debt reduction mistakes that may aggravate your financial situation:

1. Creating unrealistic debt repayment plan: Creating an unrealistic and impractical debt repayment plan will be a big mistake. You can’t clear debts in one instant just like you can’t lose 10kgs of weight in 1 day. It will take a few months to change your lifestyle to reduce your debt level. Make sure you make a debt payment plan that will help you fulfill your debt obligations with ease.

2. Managing all the debts simultaneously: You should not try to handle all your debts at the same time. When the debt amount is quite huge and there are multiple accounts to deal with, it will be quite problematic for you to manage them simultaneously. So, it is advisable to focus on 1 debt each time. Your sole focus will be to eradicate one debt at a particular time. This will help you achieve steady progress.

3. Canceling credit cards: It is better to not cancel the credit cards in a hurry. Canceling credit cards with balances will not solve your problem. Rather it will aggravate it. The reason is, it makes a negative impression on the credit card company. You will not be the customer of the credit card company after closing the accounts with them. Thereafter, the credit card company will have less interest to work with you. So, you should not close your credit accounts until you have paid off the outstanding balances.

4. Taking out second mortgage: A lot of consumers consolidate debts through second mortgage. But studies have shown that most of these consumers end up getting into credit card debt and mortgage debt problems in future. Some of them have even lost their homes to foreclosure. This is why, it is better to think rationally before consolidating debts through second mortgage. You should check whether you can afford to pay off the credit card debt without using second mortgage. Ask yourself whether you can make mortgage payments timely. This is because your home is at stake. If you can’t make the required payments on second mortgage, then it is better to not pay off your credit cards through it.

5. Making large purchases: You should not make huge purchases with your credit cards when you are trying to eliminate your debts. If your television is damaged completely, then purchasing a brand new tv with credit cards will be a big mistake. Wait till you eradicate your debts completely. Once all the debts are repaid, you can gift yourself a television as your reward.

Apart from the above mentioned points, you should never reveal your account details to anyone over phone. It may happen that you get a call from a collection agency regarding a debt of yours. They may offer you a fantastic settlement offer and ask your savings account details. You should not give them your access details so as to grab the offer. The reason is, the moment you give them your account details, the collection agency will start debiting amount from your account without even informing you. You can tell them that you will make the required payments through online banking. But you should start making payments only after receiving a written settlement agreement from them.