May

6

Currently, most people in North America live in a world of instant gratification. Fast food and microwavable meals almost instantly satisfy appetites; a click of the remote, and television instantly answers the need for information and entertainment. Similarly, credit cards are the immediate response to shortfalls in the budget. Not only are major purchases, like houses and cars, purchased on time, now gas, groceries, utilities, and entertainment can be immediately attained with a little plastic card.

Credit cards are not solely to blame for many individuals suffering the frustrations of repairing bad credit. However, $3 here and $50 there can quickly add up to financial chaos. Coupled with an excessively high mortgage or rent payment, rising costs in fuel and other necessities, credit card debt can be the nail in the proverbial economic coffin.

According to the standard assessment of income versus expenses, the mortgage or rent payment should not excess more than 25% of the total monies coming into the household each month. No wonder duel incomes are necessary to meet living expenses. Simply keeping a roof overhead can cost more than half of one man/woman’s total paycheck.

The cost of living, in many cities is based upon the residents living in the higher income bracket. Therefore, the guy trying to make an honest living on minimum wage is often left out in the cold-literally. Even without considering the remainder of the monthly bills, no wonder so many people are now repairing bad credit.

In addition to excessively high mortgage or rent, everyone in North America can relate to the rising cost in fuel. A visit to the local gas station is a constant reminder, regarding the steady climb in energy expenses. In the last month, or two, alone, gas is $.50-$1.00/per gallon greater than prior amounts. For the individuals required to commute through city traffic, travel great distances to and from work, or simple taxiing the kids and running errands, the total cost of fueling a vehicle can push a tight budget beyond reasonable limits, and a many people find themselves repairing bad credit.

While everyone is concerned with the rising gas prices at the pump, many individuals, in colder climates, are also experiencing a rapid increase in the cost of heating the home. A cold winter month, plus the increase in natural gas prices per thermal unit, and the family finances are totally out of control. Even turning down the thermostat and donning sweaters is not enough. The expense is still far above the previous totals. Thus, many people are falling into the trap of needing to repair bad credit.

Now, what about groceries and other household and personal contributions to financial woes? Two major issues are related to the rising cost in food and supplies. First, the weather has much to do with the rapid increase in food and fresh produce.

For example, oranges took a big hit, when snow and frost hit traditionally warmer climates. As an expected result, the law of supply and demand is enforced. Farmers need the income to feed their families; consumers still want fresh produce, yet only a limited supply is available. So, the price goes up, farmers recoup a small portion of their financial loses, and shoppers, who can afford the cost, can still purchase fresh produce.

In addition to natural causes, the other element affecting the rise in consumer cost of food and supplies is, once again, fuel. Imagine the expense of trucking supplies from one location to another. Florida oranges found in Montana have been transported across thousand of miles by a vehicle requiring large amounts of gasoline.

In order to offset the increased overhead expenses, the seller natural passes on the increase to the buyer. Again, the family expense account takes a double whammy, and many people will find themselves eventually repairing bad credit.

Thus, the credit card is often the answer to the inability to stay within the confines of a rapidly deteriorating budget, and ultimately the proverbial nail in the coffin. Forget going out to eat or a visit to the local theater. Never mind a much-needed vacation or a trip to the amusement park. Simply maintaining the everyday costs of living, with a credit card, can result in eventually repairing bad credit.

In summary, the person repairing bad credit is not necessarily irresponsible with his/her finances. He/she may be simply struggling to maintain a place to live, food on the table, and the necessary transportation.

However, repairing bad credit does not have to be the only outcome of financial hardships. Government agencies are available to help the individuals with genuine need, and credit counselors can help determine how and were to reduce the fat in the budget. Do not let personal pride lead down the path of bad credit. Professionals are available to help people come out the other side of economic tough times in good credit standing.

Erol Orderland writes about various topics including credit card debt. Learn about Repairing Bad Credit, Home Equity Consolidation Loans or Repairing Credit.

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May

1

Most people live in a 2-income household, just to make ends meet.  Whether paying rent or signed up for a 30-year mortgage, simply keeping a roof overhead can be a challenge.  Add the rising costs of food, clothing, utilities, and fuel, and the budget is pretty tight.
Now, include the additional expenses related to having children and pets, and the majority of people are one paycheck away for imminent disaster. Unfortunately, a growing population has first-hand knowledge of pay now, or really pay later.  Bad credit permeates life at the personal, professional, and economical levels.

Bad credit can adversely affect personal relationships. Today, the divorce rate in North America is at least 50%.  When the going gets tough, lots of people pack up and leave.  Bad credit is definitely tough. Money issues are the source of many domestic squabbles. Unless a couple has the same economic goals, and a mutual plan of achievement, relationships suffer.

For example, one partner may be a penny pincher and have no trouble cutting the budget to avoid bad credit.  Conversely, the other person has trouble keeping cash in the pocket, paying the bills first, and saying “no” to wants, even though the financial obligations have not been met.

The penny pincher is worried about losing good credit standing; the free spender has adopted the philosophy of “don’t worry; be happy!” Nevertheless, bad credit is only a paycheck away.

When bill collectors start calling, disconnect notices come in the mail, and the personal credit score is in the toilet, the disagreements begin; the stress level escalates; and, personal life matches the plummeting financial situation. Many people will actually separate or get divorced over bad credit problems.

Individuals with bad credit often suffer professionally, as well as personally.  For example, contractors, by necessity, need a line of credit at the local lumberyard or hardware store.

When the job is complete, and the customer pays, the bills for the materials are settled.  However, if the contractor has a bad credit standing with other local businesses, he/she will not have the necessary funds to buy the necessary supplies for a project.

Likewise, a business may have difficulty getting a loan for renovations or expansion. Instead of having the money to help the business grow and become more competitive, opportunities for increasing profits will slide by and go to a competitor, simply because bad credit negatively influences requests for the necessary funds.

Generally, businesspersons with bad credit will soon become unemployed.  To be a successful entrepreneur, knowing how to manage money and maximize potential is extremely important.   Without the ability to spend and save wisely, the profit margin will be slimmer, with little resources for improving economic stability.

Economic stability is essential for a happy and productive existence.  People caught in the cycle of bad credit are under constant stress and a cloud of discouragement. No, a person does not have to have a 6-figure income be free of financial stress, although the money would be nice.

However, knowing the bills can be paid every month, and building a nest egg for the future is a comforting. Conversely, bad credit, for many families, means they are one house payment away from foreclosure.   Utility deposits are usually higher, and retained longer, to offset the strong possibility an individual with questionable financial stability will fail to pay a bill. Also, unpaid loans (credit card bills) frequently have penalties or exceedingly high interest added, only making financial difficulties increasingly miserable.

Bad credit is much like dominoes.  Consider the contests to see who can build the most intricate maze or picture, using upright dominos.  After hours of intense concentration and hard work, the lead domino is tapped to fall into the adjacent game piece.  If the individual displayed the creation correctly, the dominos should fall in one continuous string, until all the little blocks are flattened and the basic design can still be detected.

So, how are the two similar? The first domino is like the first incident of bad credit. Unless an individual can keep the troubling economic situation from getting worse, one problem will lead to another, then another, and before one really knows what is happening, loans are impossible to obtain, forget buying on credit, writing checks may even be taboo for many purchases, lenders are threatening to foreclose, and the car is liable to be towed out of the driveway. Ouch!

In summary, risking bad credit is not worth the ultimate price an individual will have to pay.  If one does not pay now, the cost may be the loss of personal relationships, the inability to succeed professionally and financially, and the economic restrictions prohibiting the purchase and retention of the basic necessities of life. Simply put: pay now, or really pay later.
Erol Orderland writes about various topics including credit card debt. Learn about Credit Repair, Credit card debt or Loan Consolidations.

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Apr

25

Bad credit. Two little words. One BIG problem. Today, with companies downsizing and the increasingly high cost of living, most Americans are one paycheck away from financial disaster. An unexpected hospital bill, or the car breaks down, and many people are scrambling to figure out how to pay the mortgage or put food on the table.

Then, begins the economic shuffle. One month the rent is paid, the next only a partial payment to keep from being evicted. The next month, the rent is caught up, but the car payment slides. The downhill spiral begins. Like an airplane, economic recovery is possible; unfortunately many people crash and burn, not knowing how to survive money troubles.

For a fortunate few, a financial crisis does not lead to bad credit. Should the car break down, unexpected medical bills threaten the budget, or innumerable other reasons for financial stress, most companies are willing to work with the consumer.

Payment plans can be arranged, until the bills are caught up. Companies generally hate resorting to bill collections, repossessions or disconnections. The process is actually an added expenditure for them. Therefore, if the customer calls and explains the situation, most businesses are more than willing to come up with a feasible plan for easing financial woes.

Similar to a pilot unable to pull up and stabilize a flight in a downward spin, if an individual fails to make payment arrangements with creditors, the end of economic freedom is near. An individual labeled by bad credit will first experience the frustration of having the utilities disconnected.

After a letter of notice, a service provider can even turn off the source of heat, as long as the city is not suffering a life-threatening freeze. In addition, reestablishing service is very costly. The consumer will likely be required to pay the previous bill in full, pay any applicable fees related to the disruption of service, and he/she will generally have to pay a generous deposit, to ensure payment in the future.

Essentially, the consumer will be out even more money, eliciting even further financial stress. Chances are, a cosigner will be necessary to guarantee payment, and the individual will have to find a good friend or family member to loan the funds necessary to satisfy the bad credit debt.

Oftentimes, if an individual is suffering an economic crisis severe enough to require cessation of services, he/she also experiences repossession proceedings. If bills go unpaid for items bought on credit, like an automobile, the lender can come collect the purchase, and try reselling the item to recover the amount owed and the subsequent costs incurred. One of the first items to be repossessed is often the family vehicle.

Without transportation, an individual has even further difficulties establishing resources to get back into financial good standing. Also, a person may be required to sell off personal property to cover the cost of a bad credit debt.

Economically speaking, the crash is bad and the financial plane is burning out of control. Not only has the car been taken away and the utilities been shut off, the stores have black balled an individual with bad credit. Yes, the person may still purchase items, but on a cash only basis. If credit cards have been used in the past, the plastic money has been cut up into little pieces. Checks are now simply a piece of paper.

With bad credit, a business cannot be sure the amount will be honored, when the check is deposited. Even out-of-town creditors will request a money order, to ensure payment. Unfortunately, getting a money order can be difficult, especially with no car. Plus, a person will have to pay for the privilege of obtaining the money order.

So the financial aircraft is burning out of control. Not having money is actually costing additional dollars, and there seems to be no light at the end of the tunnel. As a way out, many people opt to file for bankruptcy, due to bad credit.

However, bankruptcy should only be a LAST resort. The decision to file means at least seven years of bad credit. Meaning, getting loans for a vehicle, a house, or any other necessity is practically impossible, even if financial hardship is in the distant past. Also, if the economic woes continue, the one way out cannot be used a second time. Two bankruptcies at one time are not possible.

Seven years of financial hardship is a long time; so, filing bankruptcy, to alleviate bad credit, should be the final recourse. If services have been discontinued, or items been repossessed, further financials dealings will be on a cash only basis.

Therefore, before financial flying goes into an unrecoverable tailspin, contact creditors in an emergency. During times of hardships most companies are willing to work with the consumer, and help him/her pull out of financial despair, and avoid the crash of bad debt.

About The Author

Erol Orderland writes about various topics including credit card debt. Learn about Bad Credit Repair, Credit card debt, Federal Loan Consolidation or Bad Credit Repair.

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