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Blog 7 ways to get out of debt

7 ways to get out of debt

One out of every 3 households carries credit card debt from month to month, according to the 2015 Consumer Financial Literacy Survey by the National Foundation for Credit Counseling, or NFCC.

Some of those consumers are managing a modest amount of debt fairly well — always paying above the minimum on every account and holding back on new credit spending until the balances are paid down.

For others, however, debt is an oppressive burden that has them ducking creditors’ phone calls and struggling to keep up with even the minimum payments each month. Some may even be on the verge of bankruptcy.

If you’re overwhelmed by debt, you need to make some quick and perhaps drastic moves to have any hope of getting free.

“It’s not just a matter of tweaking the way you’re using your credit cards. It’s a matter of reeling in debt that’s about to send you over the cliff,” says Bruce McClary, NFCC’s vice president of public relations and external affairs.

Read on, by clicking the link below,  for a step-by-step guide to getting out of debt and into debt-free living.

Get Out Of Debt

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Blog Get Your Free Credit Reports

Get Your Free Credit Reports

Get Free Copies of Your Credit Reports

Credit reporting is a system lenders use to decide whether or not to give you credit or a loan and how much interest they can charge you for it.

Your credit report is based on the bills payments you have missed or been late paying or paid timely, loans that you have paid off, plus your current amount of debt.

A credit report can contain information on where you work and live, how you pay your bills, and whether you’ve been sued or filed for bankruptcy. Consumer Reporting Agencies (CRAs) gather this information and sell it to creditors, employers, insurers, and others. The most common type of CRA is the credit bureau.

The three major national credit bureaus are:

  • Equifax, 1-800-685-1111
    Fraud Hotline: 1-888-766-0008
  • Experian, 1-888-397-3742
    Fraud Hotline: 1-888-397-3742
  • TransUnion, 1-800-916-8800
    Fraud Hotline: 1-800-680-7289

Request your free credit report online or by calling 1-877-322-8228.

Credit Scores

Based on the information in your credit report, lenders calculate your credit score so they can assess the risk you pose to them before they decide whether they will give you credit. The higher your score, the less risk you pose to creditors.

The information in your credit report is used to calculate your FICO (the acronym stands for Fair, Isaac and Company) score. Your score can range anywhere from 300-850. Aiming for a score in the 700s will put you in good standing. A high score, for example, makes it easier for you to obtain a loan, rent an apartment, or lower your insurance rate.

Your FICO score is available for a fee. Free credit reports do not contain your credit score, although you can purchase it when you request your free annual credit report.

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Blog Bad Credit 101

Bad Credit 101

Checking your credit report is very essential because your credit score is an important factor that most lending businesses and banks consider when you apply for a loan.

Whether the loan is for your mortgage or a new car, creditors and banks check your credit score to determine whether you are eligible and what interest rate is appropriate.

Also, sometimes when you apply for a job, employers may check your credit score. It can reverberate throughout your financial life, so it is crucial that you always have a stellar credit record.

If you have bad credit because you were hit badly in the past by the unstable economy, lost your job or simply do not have the proper finances to pay for your monthly expenses, taking measures to repair your credit is crucial, especially if you plan to take out a loan.

One thing you should remember is that rebuilding your credit is not something that can happen overnight. Although there are credit repair companies that promise to shake heaven and earth to fix your credit, improving your score is your responsibility and it requires your full attention and time.

Here are some tips that may help you improve your credit score.

Always Pay Your Bills on Time

Keep in mind that delinquent payments on monthly expenses like loan payments and credit card bills are typically reported on your credit report and would typical negatively impact your credit report. Missing your payment, even just a few days late, may have a hugely negative impact on your credit score.

If you have missed payments, you should make sure to stay current with your bills henceforth. Paying bills on time after having a bad payment history will likely help to increase your credit report.

Generally, if you keep paying your expenses on time, your poor credit performance will likely improve, since your current good payment patterns will reflect on your credit report.

Set Up a Monthly Payment Plan to Reduce Your Debts

If you are the forgetful type of borrower, one thing that will help you keep up with your payments is to set up an automatic pay schedule that will deduct your monthly payments automatically from your bank account.

Check your current invoices to know how much you owe your lenders and credit cards so that you can determine a monthly budget to pay them through the automatic payment method. This way, you will not have to worry about missing your payments or incurring late fees on your bills.

Furthermore, you can allot a bigger budget for your loans and credit card debts that have charged you with high interest rates and then set a minimum payment budget for your other smaller accounts that you need to pay monthly.

Coming up with a payment plan that allows you to set aside some of your available budget to pay off your monthly debts can be helpful in cleaning up your credit reputation.

Keep Your Credit Card Balances Low

Aside from making timely payments, another way that typically helps improve your credit report is by keeping all of your balances low, especially when you use credit cards to make purchases.

Check all of your credit card bills and determine your credit utilization (which is basically the amount of your available credit limit) that you use in a month. Take note that your credit utilization is typically about 30 percent of your credit score.

Remember, the closer your balance is to your account’s credit limit, the less available credit you have, which typically negatively impacts your credit report.

A good technique to keep your credit card balances low is to follow the 10 percent rule, which means you pay down every balance that is beyond 10 percent of your credit limit.

Paying off revolving debt in a timely manner and not having a balance on your credit cards that nears your limit will also generally improve your credit report over time.

Check Your Report for Inaccuracies

As mentioned earlier, your credit score will resonate throughout your financial life, so it is crucial that you regularly check your credit report. Aside from checking your credit score, you also need to check your report for inaccuracies.

If you have not seen your credit report, you need to get a copy from any of the credit reporting agencies, like Trans Union, Equifax and Experian. Every borrower is entitled to have one free copy of his or her credit report each year. The three credit reporting bureaus get details from your lenders to build your credit report.

A vital reason to get a copy of your annual credit report is to make sure a lender or credit card company has inappropriately reported something. You might have been a good borrower, but a discrepancy on your report can ruin your credit score.

If you spot inaccuracies, you need to report them to the credit reporting bureaus immediately. Companies will then investigate the discrepancy within 30 days upon receipt of your notice of inaccuracy.

Your credit may be an obstacle to getting the financing support you need when seeking a home loan or an auto loan, as well as securing an ideal interest rate. However, if you take steps to repair your credit now and have the resolve to do so, you can revamp your financial outlook.

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Blog Action Line: Don’t get scammed

Action Line: Don’t get scammed

A reader: Spring break is just around the corner. I want to take my family on a much needed getaway. We want to go to the beach. We usually stay in a hotel but are thinking it would be great to have a house to ourselves. How do I go about renting a beach house?

Action Line: Who doesn’t like a good vacation? Don’t relax yet because scammers are always hard at work to get some of your hard-earned dollars. Vacation rentals usually offer many of the same amenities that you have in your own home. Your vacation may be just the opportunity for your entire family to rest and rejuvenate. Here are some tips to avoid travel scams and have the vacation you want:

The BBB suggests the following precautions when booking your trip:

  • Get recommendations from your family and friends.
  • Look online to see what other people are saying about pricing and services.
  • Be wary of vacation deals that promise “the moon” for a very low price, or require immediate purchase to lock in a “special” rate.
  • Never send money by overnight delivery or provide payment to a courier sent to your home. That’s a common ploy used by scam artists.
  • Avoid salespeople who try to strong-arm you into revealing your credit card number. If it’s good today, it’s good tomorrow.
  • Make sure you understand the rental policies from the payment method to how to pick up and return the keys.
  • Ask what the maximum occupancy is.
  • Get check in and check out information.
  • Are there any other policies for pets or smokers?
  • Ask for a cancellation policy just in case you need to cancel.
  • Are there cleaning deposits?
  • If you are looking online, find out the local address and telephone number of the vacation rental company you’re considering doing business with and then check with the Better Business Bureau ( to determine if it can be trusted.
  • When you do make a reservation, pay by credit card. This gives you more protection than paying with a check or cash. Again, don’t give your credit card information to any business until you have checked on their reputation.

Action Line is written by Blair Looney, president and CEO for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 4201 W. Shaw Ave., Suite 107, Fresno, CA 93722 or

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