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Facts You Need to Know About How to Pay Credit

About everyone who has been an adult for any amount of time knows the importance of establishing and maintaining a good credit score. It is your credit score, as determined by the three credit reporting bureaus, that determines your creditworthiness.

Lenders of all sorts, and even landlords and insurance agents, are likely to pull your credit history practically before they shake your hand and say, “Nice to meet you.”

Do you know your credit score? Do you wonder how TransUnion, Experian, and Equifax calculate credit scores?

Credit scores are calculated by looking at your income, expenses, the amount of credit you already have, and how well you have paid your bills in the past. By looking at all of these different items, the credit agencies apply a mathematical formula, calculate your credit score, and report their findings and determinations to those who inquire about your creditworthiness.

Information that may have a negative impact when your credit score is calculated to include:

• A large amount of outstanding debt.
• A low income-to-debt ratio.
• A bankruptcy.
• Late payments
• No credit history
• A limited credit history
• Unpaid utility bills
• A lot of open credit accounts, even if they have low or no balances
• A lot of accounts being opened at the same time.
• Closing accounts that still have a balance.
• Closing a lot of accounts at the same time.

If you are attempting to calculate your own credit score, you may find it difficult to do so, as several variables are involved. Still, if you follow the simple strategies below, when your credit score is calculated, you are likely to have a pretty good score:

• Apply for only one type of credit at a time and wait for a few months before applying again.
• Pay your utility bills (electricity, cable, water, phone) on time each month.
• Live within your means.
• Make all credit card or other credit payments on time.
• Pay more than the minimum due on your credit cards.
• Use credit cards to buy necessities such as groceries, but only if you have the willpower to put the same amount of money away and pay for them in their entirety when the bill comes in.
• Maintain a savings account for emergencies.
• Save up for the purchase of expensive items rather than charging them all the time.
• Check your credit history periodically to make sure it is accurate.
• Correct errors on your report promptly.

Can A Credit Card Company Sue You - Yes Or No

In today’s troubled economy, people are finding themselves accumulating more credit card debt than ever before. Unfortunately, more of those same people cannot make payments towards their outstanding balances. 

This leads to the question: 

Can a credit card company sue you? To be blunt, yes, they can. While it doesn’t seem fair for them to sue you for a few thousand dollars when they have billions, the law gives them the right to sue you. You may not realize it, but you entered a legal contract when you signed up for your card. That means if you go long enough without paying, not only can credit card companies sue you, they will.

The card companies generate the most money from the people they can keep paying for years and years. The profits come from the interest they charge (as well as late fees and other charges), and the longer you make payments, the more interest they collect.

The question isn’t really can a credit card company sue you, but why wouldn’t they. After all, when you quit paying, they lose a portion of their income. If they let too many people get away with it, they get into financial trouble themselves. Regardless, the contract you signed has provisions for how payments are made, and breaking a contract is one of the most common reasons for being sued.

Therefore, it makes sense to do whatever you can to prevent being sued. If you know you won’t keep up on your payments or have already fallen way behind, contact the credit card company right away. Be honest with them and explain your situation. You may be surprised at how flexible they are and the arrangements they can make to help you.

It is always easier to deal directly with the card company, but if you are close to being sued, they have handed over your account to a collection agency. If you find you are now dealing with an agency, send a written proposal to pay what you owe.

Sometimes they will give you a much lower payoff amount. This is where they reduce the total you owe (sometimes by as much as 50%), but there is a catch: you will have a short time in which to pay this amount, and you usually have to pay the total in one two or three large payments. However, if there is any way you can do it, it’s a good way to reduce the total amount that comes out of your pocket.

Finally, not only can a credit card company sue you, but if the court finds in favor of the card company (which they most likely will in all but the most extenuating of circumstances), you will have the added expense of court costs. Also, knowing that having a judgment against you isn’t the end of the world, though it will be a serious mark against you for many years to come.

Can A Credit Card Company Sue You For Nonpayment

Personal debt is at some of the highest levels ever recorded, and it shows no signs of slowing down. The sluggish economy isn’t helping the situation, either. Much of this debt is beyond the control of consumers.

They have lost their jobs, are hit with medical emergencies, or need to provide the basis for their families. If this sounds familiar, you may wonder if a credit card company can sue you for nonpayment. In short, yes, they can.

You should know a few things about the potential of a credit card company suing you for nonpayment, though. The more information you have during hard times, the better.

First, they dislike suing their customers unless it becomes necessary. After all, it costs them money to go through the process, and there is always a chance they won’t win. That being said, it’s not all that common for a credit card company to sue a consumer, but it can happen. What is far more likely is that they will turn over your account to a collection agency. You have a much better chance of being sued by a collection agency than by a credit card company.

Second, you have to really mess up before they even think about suing you. You not only have to owe a lot, but you also have to miss several payments. Actually, missing payments may not even be the tipping point. What really gives you the best chances of a credit card company suing you for nonpayment is not communicating with them about why you’re not paying.

Therefore, the best way to prevent getting sued is to call the company as soon as possible and let them know what’s going on. Most card companies offer hardship programs. You may have your interest rate lowered, have late fees forgiven, or other things that work to your benefit. Most programs are usually good for six months to a year, but you may re-enroll once the initial time has expired. Remember, it’s in their best interest to work with you, but they can’t do anything if you don’t clue them in.

Third, being sued isn’t nearly as bad as many people assume. It’s not any fun, to be sure. But it’s not the end of the world either. Being sued means it will take you to court. It doesn’t mean you will lose. Plus, if your finances are in really rough shape, the judge may lower how much you owe by a significant amount. However, if a judgment is entered against you, the card company will have the power of the courts to collect what you owe.

Finally, a credit card company suing you for nonpayment is a real possibility if things get too far out of control. But there are things you can do to minimize the chances of it ever happening to you.

Can A Credit Card Company Sue You - Tips To Deal With This Problem

The chances are that you are one of a growing number of people finding themselves caught in the trap of debt. You are a good person who had every intention of honoring your debts, but then stuff happened that was beyond your control. 

For whatever reason, you are at a point where you need to know can a credit card company sue you. The answer is yes, but as you will see, there is more to it than that. With that in mind, here are a few things you must know.

1. The deck is stacked against you. Credit card companies know exactly how to get the most money from you as possible. They will suck you in with an attractive offer to get you in the habit of using their card. Over time, they know that something will happen that will cause you to miss a payment, be late, or pay less than the minimum balance. When that happens, things can quickly spiral out of control, and the credit card company laughs all the way to the bank. However, even if you do everything right, they will still make money from you.

2. Contact your creditors. So now you’ve been sucked in, don’t know how to get out, and are worried about getting sued. You need to know that your credit card company does not want to sue you and will only do so as a last resort. The biggest reason for getting sued is not talking to them. It will not be easy, but you need to call each of your creditors and explain your situation to them. Many creditors have hardship programs for people that are in a tough spot financially. You may have to ask for this specifically as some do not volunteer this information. If you qualify, you may get an excellent deal for 6 to 12 months, enough to get you back on your feet. The other advantage of contacting the credit card company is that it will show that you were at least trying to plan if you end up going to court.

3. Suing is not the same as collecting. The idea of getting sued isn’t a pleasant one, but it’s not always as bad as most people think. All it means is that somebody is trying to get money from you and that they are using the court system to make that happen. The good news is that it will give you a chance to explain your side of things and why you are having a hard time paying. The judge may reduce the amount of your debt or give you favorable conditions for repaying. However, the judge may also favor the credit card company, but that’s not always as bad as it sounds either. You need a certain amount of money for necessities, and the law recognizes that. That means that even if the credit card company wins, they may not get all that much money from you.

So, can a credit card company sue you? Yes, but there is still hope, and things may turn out better than you expect.

Facts You Need to Know About How to Pay Credit

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Facts You Need to Know About How to Pay Credit

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