So you want to know how to successfully negotiate credit card debt in just a few easy steps?
I talk to people all the time who are in over their head with credit card debts and have just spent too much money…
They just don’t know how easy and affordable it really could be to pay off all that debt you’ve racked up over the years.
The sad fact is that the problem will not just go away! You must address the situation somehow in order to move forward financially. If you truly are in over your head a bankruptcy may be your best option. But before you go that route follow the steps below and learn how easy it could be to truly become debt free.
Follow these nine steps and with some time and some work you can become debt free and fix your credit scores and remove negative items from your credit report.
Top Nine Tips to Getting Your Credit Fixed
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Get your ducks in a row.
Get educated on your State Laws on Debt Collections and visit your states Department of Consumer Affairs.
Also reference the Federal Trade Commission. The reason you should spend the time to do this is that collectors are less likely to harass you and you are more likely to get a settlement when you are educated and know what you’re talking about and how to deal with them.
Most aggressive and annoying debt collectors will RUN for the hills when you quote a valid FTC law. Many will never call you again.
Get a copy of your credit report!
Federal law says you are entitled to a free credit report annually take advantage of this and stay educated on how your credit report looks. NEVER consent to having your calls recorded… By law they must inform you that you are being recorded and they must have you consent. If you do not speak up and tell them they don’t have permission to record you then the consent is implied and any recording can be used against you.
Download a Debt Reduction calculator..
A good debt reduction calculator can help you see the different options available to pay down your debts.
There are some great free calculators in Excel form that you can Download for FREE. This is specifically set up to help you make a solid plan to payoff debt fast and pay the least amount in interest.
I personally have found many of the resources at http://Vertex42.com to be very helpful.
Call your creditors
…and let them know you would like to negotiate a settlement… Ask for a lower interest rate. If you’ve been making payments on time, you should have no trouble negotiating rates that are at least 2 percent below the national average. Even if you haven’t been making payments on time, it’s worth a phone call to see whether you can cut your interest rate slightly.
Although it could take some work on your part, it is very possible to dispute negative accounts and have them removed from your credit.
Here are directions along with a handy downloadable letter template you can send to the credit bureaus to dispute negative tradelines on your credit report.
Review and download letter here.
Request that fees be Waived
Fees such as those for making late payments, using “free checks” and accessing money through ATM’s, be waived. Some credit card companies won’t budge on these fees. Others are surprisingly willing to negotiate.
Set up a payment plan.
If you’ve been making your payments in a timely manner, most credit card companies won’t negotiate much on payment plans. However, if you’ve been unable to pay for several months, you may find them willing to work with you to set up an affordable plan. After all, they’d rather get their money slowly than not get it at all.
If you are to set up a payment plan we recommend starting with an offer of 60% to 65% of the outstanding debt with a 5 year amortization.
This is the fastest and cheapest way out of debt… Not everyone can afford a lump sum payment though.
Offer a lump-sum settlement
Make and initial offer of about 25 to 30 percent of the total balance.
If you are months behind on your credit card payments many companies will jump at the chance to collect 25% of the account in one lump sum and be done with it! This can be a huge discount on what you already owe.
Get all negotiated deals about your credit card debt in writing.
This part is VERY important! Get all agreements in writing before making payments or commitments. NO exceptions.
Debt collectors are ruthless and will do whatever it takes to get you to pay now! NEVER make an agreement to pay over the phone, and get all agreements in writing. You may also want to review and learn your states laws on debt collection and reference to them often when you are speaking to your creditors. They will be very wary of you if you are educated on what they can and can not say and do.
Get your Credit Repaired
…by a reputable affordable credit repair company.
If you don’t want to do it alone… As it is a ton of work, phone calls and time. Not to mention the frustration of dealing with creditors and collectors.
Be very wary of anyone that wants to charge hefty fees up front with no promises or guarantees. There are a ton of companies out there now preying on people that need help.
I’ve been in the business of helping people with financing since 2003 and hands down the best value in credit repair when it comes to making it affordable and getting results.
Here is a list from Investopedia for top ranked credit repair companies.
Once your credit is repaired the most important thing to remember is DON’T MAKE THE SAME MISTAKES TWICE!
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About Jason Wheeler - Real Estate & Lending
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