Financial Newsletter -- August 2009

Debt collection activity in recent months has increased sharply across the country according to industry analysts. The debt collection landscape is changing so fast that many consumers are caught off-guard and finding it difficult to navigate.  You must know how to respond -- or not respond -- to a debt collector in order to protect yourself.  It is critical to know how best to pay off the debt, strategies for avoiding judgments and lawsuits, and how to protect your bank accounts.

Now more than ever before, consumers need to know their rights when dealing with debt collectors. Now more than ever consumers need someone on their side to help them navigate their way out of debt.

Minimum Payments are going up

Three of the largest credit card companies, MBNA, Citibank and Bank of America recently announced they are doubling minimum monthly payments on credit card balances from 2% to 4%. Others companies are expected to follow suit quickly.  

If you can handle the increased payment then it's probably a good thing since it will force you to pay down your debt faster. But what if you can't?  What if you are one of the millions of Americans struggling just to make the minimum payments?  This increase might be a devastating blow to your monthly cash-flow. 

The change is coming allegedly because the low minimum payments have enticed far too many people into over-spending.  It's a situation we are all too familiar with.  If you are struggling to make your minimum payments now, you will want to address your situation before the new payments take effect in order to leave yourself the best options.

Credit scores are based on a "secret" score card

Exactly how FICO comes up with your credit score is somewhat of a mystery.  We all know that payment history, amount of debt, type of debt, and age of debt are factors.  But did you know that each person is put into a "category" or "score card" first?   The scoring models compare you with other consumers with similar credit profiles rather than everyone with a credit score.  This helps them determine the risk and what your score will be.  Currently there are 12 different categories and you probably don't know which one you are in unless you have something like a recent bankruptcy.  

The good news is that you can "move up" or "hop" to better score cards to improve your FICO score but there are important factors to get there.  A good financial consultant should be able to analyze your situation and help you determine the best plan for getting out of debt and improving your scores.

Debt Management is here

We are pleased to announce that we are now offering a new debt management program to further broaden the spectrum of financial solutions that we have available.  Since all of our clients are unique, we believe their solution is too.  For complete details on this program, it's benefits, and how it compares to other debt relief options, please give us a call.

About First Rate

At First Rate, we are committed to providing financial solutions to meet the individual needs of our customers.  With years of financial experience, we can offer you loans, debt settlement, loan modifications, and most importantly personalized, expert financial advice.  Call today for a free consultation at 877-332-8730 or visit us on the web at www.firstratedebtsolutions.com.

~ Real Solutions for Real People ~