Improving Your Credit Score: Are You in Financial Trouble?

If you have more bills than you do money to pay them, and you are being harassed by calls from collection agencies, it’s pretty obvious that you are in financial trouble. These types of problems don’t appear overnight, however, and it’s important to recognize the signs that you might be in financial trouble. This can help you avoid issues such as facing foreclosure or bankruptcy.

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Can Credit Counseling Help Prevent Foreclosure?

The process of foreclosure is a downward spiral. It starts with a loan that might be a little more than you can comfortably afford. Then something happens – Your income drops, your interest rate goes up, you lose a big client – Then all of a sudden the snowball starts rolling. Pretty soon you’re far behind on payments and you’re staring at the possibility of foreclosure.

The key in this situation is to break the cycle as quickly as possible. And breaking the cycle isn’t something you can do on your own, because you’re part of that cycle. Having an outsider who’s experienced in dealing with foreclosures, financial planning and credit is crucial.

Of course, there are different kinds of professionals you might try to work with. You might try to work with a short sale negotiator. You might try to work with a financial planner or CPA. Alternatively, you can work with a credit counselor.

How might a credit counselor help you get out of your foreclosure?

Begin by Helping You With Your Budgets

One of the most important things you need to negotiate your way out of a foreclosure is cash flow. If you’re going to try and renegotiate your payments, you need to be able to demonstrate that you have the cash flow to make the payments.

A good credit counselor can help you boost your monthly cash flow not by increasing your income, but by helping you set better budgets. Good budgets could help you reduce your monthly expenses by as much as 20%. That’s a significant amount of money that can go toward resolving your financial troubles.

Negotiate With Creditors

Creditors know that if you choose to default, file for foreclosure and/or file for bankruptcy, they’re going to get nothing. They also know that if you’re facing foreclosure, there’s a good chance you’ll just default on the rest of your debt.

After all, why wouldn’t you? The foreclosure is going to destroy your credit rating in the short term. Defaulting on your revolving credit and loans isn’t going to do any more damage.

That’s why creditors are often willing to negotiate. However, creditors tend to be quite inflexible towards individuals. They don’t want people calling them up asking for discounts on their principle balance all the time. When they do negotiate, they’ll try to get as good a deal for their company as possible – Which comes at your expense.

With a credit counselor negotiating on your behalf however, you’ll generally get as good a deal as you could ask for with that creditor. They know that credit counselors know that if they don’t offer a good deal, they’ll have to sell the loan to collections for pennies on the dollar. So when creditors talk to credit counselors, the end result is usually you save more money.

Sometimes They’ll Even Negotiate With Your Mortgage Company

Sometimes your credit counselor will even negotiate with your mortgage company for you. It’s not something that happens as a rule of thumb, but it can and does happen.

Negotiating a mortgage that’s near foreclosure is tricky business. Unlike credit card lenders, mortgage companies are often slow to respond. Deals need to go through layers of approval and stacks of paperwork before they can happen.

Nevertheless, having a credit counselor on your side can help speed things along as well as help you get a better deal. If your foreclosure is dangerously close to happening, a credit counseling company can step in, intervene and help buy some time for you to try and sort things out.

For Profit vs. Non-Profit Credit Counselors

There are two types of credit counselors: For profit and non-profit. For profit counselors will naturally try and take as much of a cut of the money they save as possible. They may ask for money upfront, or they may simply bundle up your loans and add a hefty fee.

Non-profit companies on the other hand understand your troubles and are primarily there to help. They have committed individuals who stand with you and fight for you. They still take a small fee, but only enough to keep the company running.

When in doubt, work wit a non-profit credit counselor. They’re much more likely to have your best interests at heart.

5 Financial Tips While Starting Your Career

Starting a career comes with a certain thrill and nervousness most people are not prepared to handle. A new career brings with it a professional and life-enhancing flexibility or other benefits. It could also strain your finances if you are not well prepared. Outlined below are tips to help you safely navigate the turbulent and tricky waters of a new career.

Pencil out a budget

Starting a new career is like visiting an unknown place, you don’t know how much gas your car will consume, but if you’re prepared for the worst, nothing surprises you. The only way you can achieve this is by mapping out a budget. Mapping out a budget will help you quickly adapt to sudden changes and will help you monitor your spending, whether you are spending more than you make.

Your budget should first comprise of essentials like rent, utilities, transportation, and groceries. This is to enable you to ascertain how much is left for other spending and saving.

Although, you’ll be tempted to eat out, take expensive taxis or buy expensive clothes. It doesn’t matter how fat your paycheck is, you’ll always need the extra money sometime so stick to your budget and always spend less than you make.

Plan for school

If like most careers, your career requires more study, add schooling to your timetable. Educating yourself more will increase your chances of survival in your chosen field and reduce competition. Planning for school could be full time or part time depending on the abundance of time you have. Also helpful are sites like that hosts a platform where you can get teaching jobs or fellowships.

Keep on saving

The importance of saving cannot be overemphasized. For a career starter, retirement contributions you make early will help in maximizing the time your money has to grow. A new career could tempt you to spend lavishly so that you can belong to the ‘club’. Don’t do it. Out of every dollar earned, save something for the rainy day. Open an IRA and keep saving while going through your career.

Steer clear of debt

“Debt is a dream killer.” This is the first rule, stay off debt. Debt can stop you from doing a lot of things, it could stop you from taking that dream job simply because the salary cannot cover your monthly spending. Debt could even shut the door completely on a favorable job offer. While on the contrary, a debt-free life will shower you with energy and motivation to pursue a wide array of career opportunities.

Although staying off the debt completely can prove to be a difficult task for a career starter, owing to the numerous students’ debts incurred in college and grad school, a debt-free life is achievable. All you have to do is read the article from the beginning until you get it right.

Start investing

I know what you’re thinking, that it’s too soon to start investing. No, it’s never too soon. The key to a good investment is starting early. Which means more time for your money to grow. A good investment option is buying stocks or mutual funds. All these will go a long way in securing your future, but you must start now while you still can.