Credit Strategies

Why Fix Your Credit NOW?

Delinquencies are the highest in 14 years: Credit card defaults have reached their highest level in 14 years, with a significant jump in the total amount of defaulted credit card debt in the US.

Higher credit card defaults will lead to tighter lending standards, including more difficulty qualifying for loans and higher interest rates for those who do qualify. Lenders will respond by reducing overall credit availability and tightening underwriting requirements (i.e. raising the FICO credit score limit required) to protect themselves from losses, as noted by Goldman Sachs.

Effects on Borrowers

Credit score damage: Late payments and defaults are a major negative event that can significantly lower a borrower’s credit score.
Reduced access to credit: A lower credit score and higher debt-to-income ratio makes it harder to get approved for new credit cards, car loans, mortgages, and other forms of credit.

Higher interest rates: Borrowers who do qualify for loans will likely face much higher interest rates, making borrowing more expensive.

Difficulty with other services: A damaged credit history can also make it difficult to secure utilities, insurance, or cell phone plans.

If you default, you will be turned over to a Collections Agency

If a collections agency cannot collect a debt, they may pursue legal action, such as filing a lawsuit to get a court order for wage garnishment, or they may try to negotiate a payment plan or discount, using intimidation and scare tactics until the statute of limitations expires (each state is different), at which point they can no longer sue but can still continue to pursue the debtor.

NOTE: If you don’t show up in court, they win. If they win, they can garnish your wages and/or seize your assets!  We’ll arm you with what you need to WIN every time!