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Top 5 ways to Handle Credit Issues During COVID-19 in Arizona

This week, 5.245 million new jobless claims were filed in the United States, which means that 22 million people have lost their jobs in the past month. In a few weeks, the unemployment rate has skyrocketed to nearly 18% due to the economic fallout of the COVID-19 pandemic. Arizona is no exception.  With so many people out of work, the current circumstances will have a domino effect as individuals and businesses are struggling to stay current with payments. When the paychecks stop, credit issues start piling up. 5 Tips for Minimizing the Impact of Credit Issues More than ever, it is essential for consumers to be proactive in protecting their finances during the Coronavirus pandemic. These economic conditions will affect the financial situation of countless Americans, but you can be proactive in mitigating the overall impact these credit issues have on your family. Here are a few tips to help in your time of need: Avoid Late Payments if Possible: Even if cash flow is tight, do everything you can to at least make the minimum debt payments on your outstanding balances. You might not be in a position to make much progress on debt paydown, but it is important to stay current with the minimums as much as possible. Talk to Your Lenders: Many lenders and financial institutions have policies in place to support customers during the COVID-19 pandemic. It is best to be proactive in exploring your options before you miss a payment. Call your lender to discuss hardship options, such as a temporary reduction in interest rates or payment amounts. Some lenders are offering forbearance or...

Can Zombie Debt be killed once and for all in Arizona?

Many Americans struggle to pay their bills and are forced to endure debt collector harassment on legitimate debt that by law are considered legitimate.  However, what can be even worse, is that some creditors seek to enforce “Zombie Debt”, a term describing old debt that some creditors have refused to let die. CBS Austin reports on new protections Texans can count on in the fight against Zombie Debt and creditor harassment. Every State has a statute of limitations for debt collection. This means after a set number of years have passed a debt may be considered uneforceable. The legal loophole has been that if you make a payment on an old debt that is past the statute of limitations, that debt can rise from the grave allowing creditors to reopen collection efforts on unsuspecting debtors. Your payment restarts the statute of limitations. It was reported that debt collectors have been tricking people into creating Zombie Debt. Knowing that a single payment would restart the statute of limitations, creditors have used a variety of tactics to entice unsuspecting debtors into making payments. Some creditors entice unsuspecting consumers with promises of positive credit reportings on the payment on old debt.  As soon as the consumer make a payment, an otherwise dead debt, comes back to life…hence the term “Zombie Debt.” The report also notes the lengths that debt collectors will go to in order to convince people to make just one payment, some of which have been deemed illegal. The report notes instances of people being threatened with jail time for failing to pay a debt. Other harassing debt collection practices...
Why Arizona Consumers Should Avoid Cash Advances on Credit Cards

Why Arizona Consumers Should Avoid Cash Advances on Credit Cards

Cash advances on credit cards don’t work like normal purchases. These transactions come with different rules and interest rates, and they get expensive quickly. Relying on credit card cash advances to cover expenses is a bad habit. It can easily lead to heavy fees, very high balances, and lower credit scores. Why Credit Card Cash Advances Cost Arizonians too Much Money Unless you read the fine print on your user agreements, you may think that using your credit card to get cash is the same as swiping it to buy shoes. Chances are, it isn’t. Most credit card issuers charge higher interest rates for cash advances. Also, these interest rates kick in immediately, with no grace period granted. On average, interest rates on credit card cash advances are around 23.68%, even for cardholders with good credit. Also, borrowing cash on your credit card normally comes with a fee. Most Minnesotans are charged $10 or five percent of the cash amount borrowed. Unfortunately, borrowers pay the more expensive of the two. For example, if you only need $40, you’ll pay the $10 fee. However, you if need a $600 cash advance, you’ll owe the issuer $630. When you add possible ATM fees into the equation, credit card cash advances don’t make much sense financially. This is especially true for Minnesota consumers who routinely use them. Depending on your needs, you may consider taking out a small personal loan or borrowing money from a family member as better options. Ideally, though, you should limit your spending and fit your expenses to your income. Treating your savings as a necessary expense is...
Tips for Arizona Consumers who are Pulling their Credit Reports for the First Time

Tips for Arizona Consumers who are Pulling their Credit Reports for the First Time

It’s important for Arizona consumers who want to build and maintain a good credit score to regularly pull and check their credit reports. This will allow you to catch suspicious activity that could indicate identity theft and find errors that might bring down your credit score. If you’ve never checked your credit reports, don’t worry. Now is a good time to start. It won’t cost you anything to request copies of your credit reports from each of the three major reporting bureaus. It’s also fairly simple to make these requests, but there are a few things you should know if you’re pulling your credit reports for the first time. How Arizonians can Simplify the Process for Pulling Credit Reports There is a federal statute known as the Fair and Accurate Credit Transactions Act. It grants you a free copy of your credit report from each of the major reporting bureaus every 12 months. If you have looked at your credit reports in a while, or if it’s your first time pulling them, it’s best to request all three at once. You can go to TransUnion.com, Experian.com, and Equifax.com and request a credit report from each bureau individually. There are online forms on each credit bureau’s website. Or, you can get their addresses and write letters requesting physical copies of your credit reports through the mail. Of course, the most convenient way to get copies of your credit reports from TransUnion, Experian, and Equifax is to go to www.annualcreditreport.com and fill out the easy online form offered here. Credit Report Pulling Prep-Work If you choose to fill out an online...
Arizona Consumers who are Worried about Credit Card Debt should ask themselves these 6 Questions

Arizona Consumers who are Worried about Credit Card Debt should ask themselves these 6 Questions

For Arizona residents who suspect that they might be in over their heads with credit card debt, there are some sure signs for which to look. The fact that you’re concerned, however, is a good sign. It means that you aren’t living in denial of a potential problem. Yet, before panicking, ask yourself these six questions. You can then determine whether or not your credit card debt is out of control. Early recognition of the problem may prevent financial trouble and credit score damage. Six Questions to Help Arizonians Identify a Credit Card Debt Crisis Any Arizona consumer who has ever experienced problems with credit card debt can tell you that problems can sneak up on you. It may seem that everything is going fine. But if your spending increases and your payments don’t, debt starts to accumulate. For Arizonians who have a nagging suspicion that they are not managing their credit cards as well as they should, here are the six important questions to ask. Your honest answers may help you salvage your credit score before it’s too late. If your credit score has dropped, now is the time to check your credit reports. Are your balances just going up and up every month? Ideally, you should be paying your credit card balances off every month. This is the only way to avoid interest charges and debt accumulation. If you’re not paying your monthly credit card bills in full, you should at least whittle down the balances. Growing balances, on the other hand, are a sign of overspending. Are any of your credit cards maxed out? Arizona consumers...
How Arizona Consumers can Guard their Credit Scores against Auto Loan Mistakes

How Arizona Consumers can Guard their Credit Scores against Auto Loan Mistakes

A lot of Arizona consumers have found that car ownership is unavoidable and expensive. It’s easy to finance a vehicle that you think you can afford only to be overwhelmed by your monthly payments. The truth is that too many Arizona car buyers don’t realize how much they’ll be paying in interest charges. They may also forget to set aside money in their budgets for cost of ownership expenses. These include fuel, auto insurance, maintenance work, and repairs. Often, Arizonians who already have bad credit miss a car payment or two. They may even default on their loan, and end up having their vehicle repossessed. This just makes their bad credit worse. Repossession also leaves them with fees that they can’t pay and a lack of transportation. However, with careful planning and realistic expectations, you can finance the car you need without blowing your budget or ruining your credit score. Should Arizonians with Low Credit Scores Finance their Vehicle Purchases? One surefire way to avoid going into debt over a car purchase in Arizona is to buy an inexpensive vehicle outright with cash. This will also allow you to avoid the high interest rates that come with bad credit auto loans. Yet, there are three reasons why buying a cheaper car with cash may not be the best idea. While it won’t hurt your credit score, paying for a vehicle with cash won’t do anything to help it either. You have to use credit in order to build good credit. So, yes, taking out an auto loan means taking on debt, but it will also give you a chance...