Your Free Credit Scores May Not Be Free

You have heard the ole saying that “there is no such thing as a free lunch”, well the same could be said for credit scores.  I am sure you have heard those annoying commercials 3 free scores and more.

You may get a number from these services, but usually you will first have to fill in a form and give them your personal information.  That means you’ll start receiving calls or emails from these companies trying to sell you on something else, like some type of monitoring service, or they automatically enroll you in their service where you get charged a monthly premium.  The free score may not be free after all, watch for the fine print to see what they are really offering.

Mortgage Refinance or Use an Equity Loan To Reduce Debt

Should you refinance or use the equity in your home to pay down debt?

o answer this question, you first need to determine how long it will take to break even and how long  you plan on staying in your home.

For example if you had a $200,000 30 year fixed rate mortgage with an interest rate of 7% your monthly payment would be $1331. If you refinanced at 5% your new monthly payment would be $1074 a savings of $257 per month. If your closing costs totaled $2500, it would take 10 months to break even ($257 * 10 = $2570). With this scenario , if you planned to stay in your months 10 months or more then refinancing would make sense.

Deciphering The Credit Score Formula – What Makes Up Your Credit Score?

1) Types of Credit in Use: About 10% of your score 

Credit score calculations consist of complex formulas that take into account both the types of account, their mix and the total number of credit accounts in your name.

Credit account types include: credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

2)  Pattern of Credit Use: About 10% of your score

The number of new accounts you have and the type of  the account  is part of your score.

Also how long has it been since you opened a new account and the type of account it was.

Debt Programs – Have They Worked For You?


There are pros and cons to enrolling in a debt reduction program.  That includes debt settlement, debt consolidation and credit counseling.

I want to know if you (or anyone you know) have ever signed up for any of these programs and if so did it help you get out of debt?

You can leave a comment to let us and everyone else know.

Can Debt Settlement Reduce Debt by 40% or More?

Debt settlement is a process where your outstanding debts are eliminated through negotiation with your creditors. You are required to pay only a portion of what you originally owed your lender.

So why will your creditors agree to settle your loan at a reduce amount? Because they are protecting their investment. If you were to file for bankruptcy, they stand a chance of not collecting a dime from you. By settling with you, they can at lease get some of what they are owed. When debt settlement companies get involved, the creditor has less to worry about. They know that you want to repay your debt even if it’s not the full amount. They also save on collection agency and collection attorney charges which may be as high as 40% of the funds recovered.