10 Steps to Repair Your Credit

Does credit card debt got you down? Does it seem like you will never be free of this weight? If you're struggling with debt, here 10 steps you can take to repair or rebuild your credit. If you’re short on time, energy, or you at your wits end, contact one of our Credit Counseling Agencies on ModernDebtRelief.com.

1. Create a Budget. Calculate your income and your expenses. I recommend tracking your expenses for 30 days before laying down the numbers for your budget. Then see how much you can cut from your expeneses e.g. lowering bills, cutting down on entertainment or leisure activities, etc. Apply the money you save to your debt. Modern Debt Relief offers free budgeting software to track your expenses. The program is in the tools section of the resources tab.
2. Get Your Credit Report By federal law, you can get a copy of your credit report from each credit agency (Equifax, Experian, and Trans Union) annually.You can get all three at once, or spread them out through the year. Go to the AnnualCreditReport.com website.
◦ Review your reports and look for mistakes.
◦ Take note of late or missed payments that have been reported and which of your credit lines are at or near the limit.
3. Contact your creditors. As soon as you foresee that you will have trouble making your payments, contact your creditors. Given the economic climate, creditors are willing to work with you to schedule payments that suite your needs or lower your interest rates. After all, they'd rather get $25 payments for the next year than risk getting nothing in bankruptcy court. This is where your budget will come in handy...explain that you have a written budget and only afford $X payment. If necessary, offer to send a copy of your budget. This will show your good faith to pay your debt.
4. Get any agreement in writing. Once you have negotiated a better payment or rate, get the terms in writing. Also, when you pay off your debt, be sure to get a settlement letter that states that you have settled in full. I recommend that you send a copy to the credit bureaus so they can update your credit report and avoid any confusion.
5. Stop Charging. Stop charging and pay as much as you can afford on all cards. Eventually, you will pay off your debt. This is what you’re here for after all. It will take discipline, but will be worth it.
6. Keep some credit accounts open. Don’t close all of your accounts too soon, and be sure to keep a few accounts open to build your credit history with. Be sure not to close more than one card every 3-4 months. Any more than that and you will be putting up red flags on your report of instability. I recommend keeping your oldest accounts open because the length of your account history positively affects your score.
7. Get a secured credit card, if you don't have a traditional credit card. This will be the only way for you to build your credit. A secured card is secured by your money. Your limit is the amount that you pay upfront when opening your account. If you deposit $500 with the bank, your credit limit will be $500. Beware of the high interest rates that secured credit cards are known for. I suggest you pay 90% of your balance every month, on time, to minimize fees.
8. Join a credit union. You have a better chance at getting a loan with the best interest rate from a credit union over a traditional bank.
9. Pay on Time. Negotiate payments with your creditors that you can actually pay. Nothing carries more weight on your score than your payment history. The point is to pay off your cards and get a better score, not pay high fees and ruin your credit.
10. Avoid bankruptcy it stays on your credit for 10 years. While it may take years of work to pay of your cards, you will be glad you did. Don’t take the easy way out.

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14 Red Flags of a Loan Modification Scam

I read the disturbing report from the Department of Real Estate on the scams that loan modification companies are pulling on homeowners in need. It is so hard to see through the smoke and avoid these people.
I have compiled a list of 14 red flags that warn of fraud when it comes to loan modification companies. As a member of Modern Debt Relief, you have the peace of mind of knowing that all listed providers have passed a background check and have the necessary licensing and credentials to provide the services you need. Share these red flags with those you love and care for and refer them to www.moderndebtrelief.com for reliable resources.

Red Flags of a Loan Modification Scam

1. Demand for payment up front
Be wary of loan modification companies who demand payment up front. This is the first sign that fraud may be in action. Only licensed real estate brokers can perform loan modification and charge you in advance before a Notice of Default is recorded. But this payment must be authorized by the Department of Real Estate (DRE) and held in a trust. Licensed lawyers who offer loan modifications as part of their practice as an attorney at law may also charge a retainer. However, be sure to get a written fee agreement before paying a retainer.

2. Unlicensed Agents or Company
The agent must have a Department of Real Estate (DRE) license or be a lawyer or firm that specializes in real estate.

3. Guarantees of Success
We see the extraordinary claims all over the media: “We will save your home” “We can lower your principal” “Money Back Guarantee”. None of these claims can be guaranteed, and are used to lure in unsuspecting and often desperate home owners in danger of losing their home. No company can guarantee the outcome of a successful loan modification.

4. Unrealistic Testimonials
When you visit the company’s website or sit down with a rep, you may be given unrealistic testimonials. Any fantastic claims to have lowered the interest rate below 4% or reduced the principal balance on the loan by 40% are just too good to be true. Don’t fall for it. This is just another tactic to reel you in with false promises.

5. “Attorney-Backed” Companies
If you are not dealing directly with a law firm, stay away from companies claiming to be attorney-backed or attorney-affiliated. Many of these companies are looking to gain credibility by associating themselves with a lawyer. Avoid the probable headache and seek help elsewhere.

6. Request for Power of Attorney or Title
Do not grant the loan modification company power of attorney or transfer the title of your home into their name. They may abuse this power and sell your home without your consent for their profit. This sounds atrocious, but it happens.

7. Rent to Own
This involves transferring title to the company or third party with the arrangement to lease back the home from the company. This may sound good because you can stay in your home for a lower payment and rebuild your credit. Be wary. As in #5, the scammers may evict you and sell the home from underneath you.

8. Payments to Someone Other Than Your Lender
Be suspicious if your loan modification company sets up payments to anyone other than your home loan lender. This is not a viable practice.

9. Forensic Loan Reviews
Be wary of firms that claim to put pressure on your lender by filing suit or bankruptcy.

10. Signing Lot of Forms
If a company gives you lots of forms to sign and skim over the pages, telling you where to sign without encouraging you to read or explaining the document, be cautious. You must read and understand the documents before signing them to avoid scams.

11. No Time to Meet With You
If a company is too busy to sit down and meet with you, do not do business with them.

12. Instructions to Deal With Only Them
If your loan modification provider advises that you not contact your lender, non-profit counselor, or any other professional, raise the red flag. They are keeping you guarded from sound advice and counsel.

13. Promoting Delinquency to Improve Success
It is not good practice to advise clients to miss payments to improve the chance of a loan modification.

14. High Pressure
Do not cave in to high-pressure sales tactics. You do not have to “act now” or else. When dealing with your home, it is best to proceed with caution or deal with a qualified professional or agency. High urgency to act or to pay is a red flag for scam. You need time to investigate their credentials and licensing.

Avoid Debt Relief Scams

We see it everywhere. Companies are guaranteeing that they will lower your monthly payments or even eliminate your debt all together. It sounds good, especially to those struggling to pay their bills. But is it too good to be true? Yes. The Federal Trade Commission has sued more than a dozen debt relief companies for outright lying to consumers.

You must beware of scam artists. These opportunists are looking to make a quick buck off those in dire financial straits. They will waste the time and money of those who buy into their promises, and have no intention of delivering results. Hundreds of dollars will be lost before the client becomes suspicious, and by that time late fees and penalties have piled up, making their financial situation worse.

Be wary of phone calls from debt management agencies who promise to lower interest rates with your creditors. They may claim to save you thousands of dollars within weeks for an up-front fee. There is no way of knowing who the person on the other end of the phone is, or if they are legit. But their claims will be fantastic. They will offer exactly what you have been hoping for.

Do not proceed with anyone before visiting ModernDebtRelief.com. Modern Debt Relief does a background check on every service provider before adding them to their network. The companies are reputable and offer valuable services to Modern Debt Relief members at a discount rate.

Don’t Pay Referral Fees
Some agencies may charge you a “referral fee” to point you to a company that will help you. Do not pay them. There are resources online to help you locate a reputable agency.

Credit Counseling vs. Debt Settlement
Credit counselors assess your financial situation and work out a plan of action to manage debt. Sometimes they will not take you on as a client, but give you a plan to work out your situation alone. A debt settlement company promises to negotiate a one-time settlement with all of your creditors to lower your principal 50 - 70 %. A lower principal will lower your payments.

While debt settlement sounds more attractive as a “quick fix” it is virtually impossible to accomplish. Do not fall for this scheme. Anyone who promises to lower your principal on all of your debt is lying. Walk away. Legitimate credit counseling is a much better option, and may actually relief the burden of your debt.

The initial credit counseling assessment should be free. Do not pay up front for this. If it is decided that you qualify for their services, they will come up with a customized plan to pay off your debt within 3-5 years. You write the company a check and they distribute the payments to your creditors.

Work With a Clear Head
You may be suffocating with debt and this will cause you to panic and make rash, uncalculated choices. This is understandable, but may lead to disaster. Take a deep breath and do your homework. The advertisements you see on TV or hear on the phone or radio may sound great, but be skeptical. Join Modern Debt Relief for free and gain access to qualified professionals who can help you to not only relieve your debt, but to earn income! Membership also includes access to resources such as articles, blogs, videos, training, and forums. Did I mention this is FREE? Save your money and your sanity and sign up for an account here.

Must See Video On How Money and Credit Works

I had to share this video with you. This CPA goes over money and credit and will explain how and why we are in debt. This is very interesting.

Create a Budget and Stick To It

Having a budget makes all of the difference when taking control over your finances. We all claim to be "on a budget", but have we taken the time to actually sit down and create one? Furthermore, once we have a written budget, we often fail to stick to it. I want to encourage you to create a budget and track your expenses for 30 days. Like any good habit, it will take work and determination to see it through, but at the end of the 30 days, your finances will be in much better shape!

My husband and I sat down a few months ago and created our budget. We downloaded an excel template from Microsoft and went to work. Believe me, there were many other things we would have rather done with our time, but this was necessary to get us back on track. We had goals for our future, but no extra money to accomplish them. After our session, we had a clear view of how we could set aside money every month. Now we spend about five minutes a day thinking about our budget and plan. This is worth the hundreds of dollars we have saved since.

I will share with you how we set up our budget and how we stuck to it.

1. Create a ModernDebtRelief.com account. It's free and easy to join.

2. Download the budget sheet from the tools tab of ModernDebtRelief.com's member menu.

3. Open the budget sheet in Miscrosoft Office Excel.

4. Fill out the actual cost for your expenses first.

5. Look at the actual balance and decide how you will raise that amount. That is how much you will have left at the end of the month after all of your bills are paid.

6. Click the 'Action Items' tab on the bottom of the sheet.

7. Write down the steps you can take to lower your bills (e.g. consolidate your phone, cable, and internet bills for a lower monthly payment)

8. Click the 'Monthly Budget' tab on the bottom of the sheet.

9. Fill in the projected costs with the new amount of your expenses will be once you implement the action items.

The 'Total Savings' reflected in red will show how much you save with your projected changes.

10. Spend the next day or two implementing the one-time-only actions on your list (e.g. switching your cable plan) I recommend that you add your actions to your short term goal list on ModernDebtRelief.com and remove them when you have completed the action.

11. Don't remove the daily tasks that you have assigned yourself (e.g. cutting down your eating out budget)from your short term goals list. It is beneficial to see your goals daily to keep you on track.

12. Keep your goals with you and track your spending in the different categories. The way that we keep track of our spending is with our cell phones. Nearly everyone has one these days and it is an easy way to keep notes. Write Your goals in the notepad of your phone and edit it as the month goes along. You spend $10 eating out. Note it, and deduct it from your monthly limit.

Do this for 30 days and watch the savings pile up. Use it to pay off debt or achieve other goals. Afterall, that is what we are here for. Let me know how it works out.

Go Green and Save!

Besides the economic woes of the day, we always hear the buzz words "Going Green". It seems like all of the major companies are doing it. For many of us, putting one more thing on our to-do lists is just not practical. But there a some simple things that you can do that will save you money and help the environment. Add one onto your routine weekly and you will hardly notice the effort, but it will be well worth the savings. I am going to share with you some simple ways to "Go Green" and save money while you're at it!

Get to Know Your Local Farmer
I visited Tanaka Farms, an organic farm in my area, with my son last week. We took a tour on a wagon, ate fresh veggies and picked strawberries off the vine. We loved it. We saved money buying locally grown produce, it was safer to eat without the harsh chemicals and pesticides, and it tasted SO GOOD! Buying directly from the farm what was in season was much cheaper than buying organic at the grocery store.
Check out http://www.localharvest.org/csa/ to see if your area has Community Supported Agriculture (CSA). You buy directly from the farms and have a weekly share of the produce each week. This will save you even more.

Home-Made Beauty Products
Oh how I love a trip to the spa! Unfortunately it does not agree with my budget. Your skin, hair, and nails do not have to suffer. Pamper yourself at home! Look up home made beauty products and break out the eggs, yogurt, and olive oil. It is fun and nearly free. I'll post a few simple recipes that I found below:

Hair:
1. Hot Oil Treatment: 1 cup organic olive oil (use more or less depending on hair length)
This is the simplest and most effective remedies to dry hair and you can do it often. Before shampooing, massage the olive oil into your hair and wrap it in a towel for 20-30 minutes.

2. Hair Moisture Mix
1 1/2 cups of plain organic yogurt
1 tbsp lemon juice
1 organic egg yolk
1/4 tsp organic olive oil
Mix the ingredients in a glass bowl until it reached a creamy consistency. Apply generously to your hair, starting at the scalp. Massage into your hair and scalp. Discard any left over mask (or use it to massage your hands). Leave the mixture on for around twenty minutes.


Soft Hand and Feet:
1. Socks + Lotion = Soft Feet
Favorite Natural Lotion or Coconut Oil
Saran Wrap or towel
Pair of old warm sock
After a warm shower, slather your hands with your favorite natural lotion or coconut oil. Wrap your hands with either saran wrap or a very thin tea towel. Pull on a sock on each hand and relax for 5-10 minutes.

Recycle
I have a special trash bin for this. So I have no excuse not to recycle. I gather up my plastic bottles, cartons, and cardboard and stick them in the bin with the grey lid. It is as easy as it could be and I feel good separating out my recyclables.

No More Bottled Water!
This is just terrible for the environment, and in many cases, we are drinking bottled tap water and paying 100x more for it. Buy a water filter like Brita, or drink from the fridge. You will save money and help the world.

Bag It Up the Green Way
When grocery shopping, consider bagging your own groceries in cloth, reusable bags. I keep my "green" shopping bags in my trunk. I admit, I forgot to bring them into the store or back out to my car many times. But when I do use them on my shopping trip instead of the plastic bags, I feel so accomplished. You may end up spending less if you know your space is limited. Just maybe. :)

Turn Up the Savings
Raising your thermostat a few degrees this summer can make a significant impact on your wallet. In the winter lower your thermostat three degrees. You'll hardly notice the difference until your bill comes! Whenever possible, use a fan.

A Clean Commute
With the cost of gas these day I recommend that you arrange a carpool, use public transportation or bike to work. Better yet, Telecommute if possible. You'll be surprised at how much you can get done with no distractions. I telecommute 4 days out of the week and LOVE IT.
If you must drive, improve your gas mileage by keeping your tires inflated and driving the speed limit.

That's should be plenty to get started with... let me know how it goes, and share your tips for going green and saving money.

Don't Want to Sell? 11 Ways To Scare Away Buyers

My husband and I bought our first and only home in 2005, about a year away from the peak of the market in our area. We had a blast looking for homes, but opted to buy a brand new home in the end. The market was red hot back then, and we were still turned off by some things we saw. Today there is no room for error when attracting potential buyers. So unless you don't want to sell, avoid these common mistakes:

1. A Dirty House: Dirt and clutter is BAD.

2. Foul Odors: Nothing will turn off potentials more than an odd stench.

3. Old Fixtures: It doesn't cost much to go to Home Depot and replace those old knobs or new ceiling fans. But old fixtures could cost you a sell.

4. Wallpaper: Just remove it all.

5. Popcorn Ceilings: Nothing shouts "old house" like those popcorn acoustic ceilings.

6. Personal-Item-Overload: You want the buyer to picture themselves living in your home. Take down your pictures and collections. This also goes along with #1: de-cluttering.

7. Nosy Sellers: Nothing makes a buyer more uncomfortable looking at house than having the seller be there. Make it comfortable for them and stay out of sight or preferrably out of the house.

8. Hyping Up Your Home: Nothing kills a sell like misrepresenting your home's features. Be honest when listing your house.

9. No Curb Appeal: The outside of your home makes the first impression. A dead or overgrown lawn will hinder sales.

10. Clutter: This is mentioned twice above and I will list it alone. Get rid of CLUTTER. Think like a minimalist.

11. Pets: Agents and potential buyers won't appreciate trying to fight off a 100 pound akita trying to lick their face. Keep the pets away.

In summary, the key to selling your home is remove yourself. Your personal items, and you have to move out of the way and let the buyer in! How else will they feel comfortable taking a peek into your closets, and making criticisms? Give them their space and don't make them feel like they are violating yours.