Credit & Debt

Ever have that overwhelming feeling that any minute now any second now your going to get some knock on the door and it will be the credit police to come take you away because you stopped paying your bills. Getting yourself into debt can be very frustrating and stressful. For many that are young and irresponsible do not realize how strongly having a good credit history can do for you and your future. If you stop paying your credit card bills you can expect that for 7 years you will have a negative mark on your credit report. For many that go into debt it comes from helping others like a partner or friend. They say they will pay you back but you never see anything in return so this leaves you with high debt. Be careful when lending money and if possible ALWAYS make sure you have them sign an agreement with you that they will pay you back and if they disagree with you then don't lend them anything at all.

Your Pre-approved

Let me explain some things to you about credit and debt. When you get your first credit card you are building credit. This gets reported in your credit report for other creditors to see. After awhile some creditors will check to see if you qualify for certain cards like furniture stores and other credit card companies. If you accept too many of those "pre-approved" letters you are just going to get yourself into debt. The more credit you have the more debt you gain. Before you sign that pre-approval letter that guarantees you up to $5000 credit let me just tell you one thing. The second you sign that letter your signing away more debt plus your also signing  to get a card that IF your lucky you will only receive half of the credit you were actually promised. So when you see "up to" before the amount just remember that you may get a limit as low as $300 and then you will see it as a big waste of your time. Plus you run a chance that you will max out a card very easily because it has very little credit limit.

Adding a Name to a Card

Be careful when adding someone name onto your card. If this person is someone you trust go for it but if this is a spouse and things go wrong in the relationship, you want to make sure you cancel that card quickly. If your ex-lover or mate is on revenge mode then you may just notice some cards getting maxed out and it will be difficult to fight in court later on.

The 7 year cycle

The 7 year cycle begins after your FIRST late payment. From there 7 years will begin counting before an old debt is removed from your credit report. Many times the debt is not removed and you will need to contact the credit bureaus to dispute it and that could take a couple months.

Getting out of debt

Before I give you my last piece of advice please know that you must always take full responsibility for your own mistake and that includes not paying your bills on time. If you are debt and feel there is no way out, then the most you can do is focus on building good credit. How do you go about doing this? For starters get a credit card that welcomes people in debt these are card "second rate cards". They will have higher interest (some up to 23%) but they will help you to build credit as long as you pay your bills on time. Some of these companies are Capitol One and others. Look into these companies and they will be able to help you build good credit...again.

Cynthia...a.k.a The Psychic One