Debt settlement is sometimes the only way to turn.

This article is from personal experience of hitting a financial wall and coming to a sudden stop. I was 40 years old and my whole life stopped. I was financially devastated and did not know where to turn. I had been making a good income and my wife at the time was working full time and making very good money. But then I walked into work one day and my job had come to an end. I had no clue that this was going to happen. We had been living high on the hog and had not been putting away any funds for times like this, we had no nest egg or financial cushion to fall back onto. I was devastated, I felt like my world was crashing in around me and I had no clue of where to turn or what to do. 

My credit cards were close to being maxed out and I had other bills that were closing in on me. I had reached out to credit counseling agencies to try and help me get my bills in order. They worked except they took every red cent I had and put it all towards my debt, which is fine but it leaves you with nothing which hurts when you have unexpected car repairs or home repairs or a medical emergency. You cannot just pick up the phone and call your credit counselor  and say I am skipping this months payment to fix my car, the credit counseling agents do not want to hear this from you and they will not help when you have these situation's. So unfortunately I had to take out other credit cards to help when these issues came about.

I had also looked into a consolidation loans to wrap all my debt into one account and one payment with a much lower interest rate and a payment that I could afford. This would have been great but with no job and only my wife's income I could not qualify for loan, I was what is called “upside down”, my debt to income ratio was backwards or upside down, I owed more monthly than what I had coming in as income. A consolidation loan was out of the question, it would have been great but there was no bank or loan company out there that would give me the time of day.

Unfortunately a lot of these types of programs do not work for people and they did not work for me either. One thing that I did do that worked for me was to go and find a professional debt settlement representative that could talk to the collection agencies, credit card companies, and other people I was in debt to and come up with a debt settlement that we all agreed too. A lot of people frown on debt settlement because it does hurt your credit report and credit score, but when you are in a position like I was my credit score sucked anyways. I opted to take a hit on my credit and pay off my debt at an agreed upon settlement instead of filing bankruptcy. The process can take two to three years of work but I was able to get my bills paid off and in the process I had found a new job and I took that income and applied it to my overall debt.

The whole situation was a wake up call for me. I knew from this that I needed to start storing away some funds on a weekly basis to cover me for three to six months just in case one of us loses our job again or we get sick and cannot go to work and we have to live on one income again. Everybody needs to make sure that they have at least six months of income stored away in case of emergencies.

The Advantages and Disadvantages of Credit Karma

I have been using and recommending Credit Karma for years. There are a lot of advantages to using this service to get a good look at your credit. One of the real nice advantage is that Credit Karma is a free service. They have large paid advertisers base that cover the cost of this service. What that means to you is that you will never have to give Credit Karma a credit card number to use this service. Some of the other credit services offer free credit information but you have to supply them with a credit card, some of these services only give you thirty days of free service and then they charge you a fee. With Credit Karma you do not have to worry about ever getting charged for the service they provide.

Here are a few of the services that Credit Karma offers you:

Credit Karma gives you a report card of credit. This is an analysis of your open credit card utilization, average age of open credit lines, hard credit inquiries, total debt, and of course the big debt to income ration.  This report is awesome because it shows you a grade of A through F for each area. If you use this information correctly you can fix these areas that you are scoring a C or worse to help improve your overall credit score.

You also receive for free is a snapshot of your credit score from TransUnion which can be updated as much as you like. Credit Karma keeps track of your score over a period of time and lets you know how you are coming along hopefully fixing any credit issues. The snapshot is a view of how lenders are viewing your credit as compared to the national scores.

A great tool that Credit Karma offers is a credit simulator. This tool gives you fourteen different simulations that you can run to see how they will affect your personal credit. One example I tried was, how raising my credit limits affected my overall score. The fourteen options are broken down into three categories: credit limit, payments, and records.

Other feature that Credit Karma offers are news articles dealing with finances, financial tools, financial calculators and forums and feeds pertaining to finances.

The only disadvantage of Credit Karma is that they don't give you a true "FICO Score". They do offer a real close to true score which is very helpful. This is the only thing I found to be a little disadvantage, but I can live with it since they do offer so many other beneficial tools to help a person with there credit issues.

Check your credit report and credit score regularly.

If you are like most people you probably have never checked or have not checked recently your credit report or at least your credit score. It is highly recommended that you check your credit report on an annual basis. There are many reasons why you should check your credit at lease once a year. Here are a few of the reasons that you should take this opportunity to check your report.

It is Free. Today there are not many things that are truly free with some sort of strings attached. But a yearly credit report from all three credit reporting agencies TransUnion, Equifax and Experian is free. Your credit report plays a large role in your day to day life. AnnualCreditReport.com offers your credit report free of charge.

To Detect Identity Theft. Identity theft is a major problem for all of us today. If you have opened up a bank account or bought a car or house, filled out a application online then your identity has been corrupted one way or another. A lot of people think that they are free from identity theft because they pay for everything in cash or don't own a computer, that is a huge mistake. Identity theft is happening every day, you need to run your credit report annually just to check if your credit has been compromised without you knowing it. Scan over your report and check to see if any accounts that you have no clue what they are has been open in your name. You may be surprised of what you find, I myself have caught a couple huge accounts show up on my credit report, luckily enough I caught them early and was able to fix the issue with the credit reporting agencies before things got out of hand. But if you do not check your report regularly credit fraud can really put a damper on your credit report.

You Were Denied Insurance or a Job. If you have been denied any credit or insurance or even a job you can request a free copy of your credit report, this must be done within sixty days of being denied. The credit report will give you some insight to why you were denied. There could be something on your report that you have no idea what it is, this is a good sign of fraud. Or the report may open your eyes to some foolish spending habits that you may need to change. What ever the issue, if you have been denied then you need to take this opportunity to receive your free report and work on fixing what ever the issue is that caused you to be denied.

Public Records That Are Not Yours. One thing you need to look at closely on your credit report is judgement's, liens, bankruptcies, tax liens, and other civil judgments that do not belong to you. If you have hired any work done in the past for your home you may have a contractor lien on your credit report. The company that I work for, if we have a contract with a customer and they fail to pay us in ninety days we file a lien against their credit. These items you do not want to show up when someone like an employer pulls your credit.

These here are just a few reasons of why you need to pull your credit report annually, we will be looking at other reasons in the near future in order to help you get your finances in order.