Credit Repair + Debt Elimination = 800+ FICO® Score Credit Report

Your FICO® Score, Your Credit Rating, and the Effects of Borrowing From Friends and Family.

There are many factors that you need to consider before borrowing from friends and family.

First and foremost, you need to discuss, with whoever you are borrowing from, your financial situation so they can make a decision whether or not to lend you money based on whether they are comfortable that you can repay your debt.

There is no quicker way to lose friends or cause family strife than to get in a situation where you have borrowed money from them and cannot pay it back when they need it.  They are no different than you, they too have a credit rating and FICO® credit score to maintain.

It is recommended that you only borrow money from people who have excess funds that they have invested elsewhere, and where you can pay them interest for the use of those funds so that they aren’t losing out on the deal.

In situations like this you will be able to borrow money at a lower rate than you could get from any of the financial lending institutions and the person lending you the money could also get a better return than they would get by investing their money in those same institutions or at the bank.

So it is quite possible it could be beneficial to both parties in the deal.  But once again I need to stress the importance of total disclosure of your financial position as they need to know that to be convinced whether you are a safe investment or not.

Friends or family should not feel pressured to lend you money no matter how bad your financial position is, because it could put their credit rating in a similar situation.

It is always a better option to leave the risk with financial lending institutions, if you have any doubts whatsoever of paying back the money borrowed from those close to you.

Some people are only too willing to take advantage of the opportunity to earn a little more interest and if that’s the case then well and good - they have decided that you are a worthwhile investment.

Let them have a look at all your books and your budget and possibly even get them to help you work through your budget and to sort out a plan of repayment for their loan to you.

Bottom Line:  Your credit rating, FICO® credit score, and credit report are not always factors when borrowing from friends and family, but your honesty and integrity are.

Dr. Robert Miller, PHD
Investigations Analyst
www.TheCreditRobbers.com

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Credit Repair + Debt Elimination = 800+ FICO® Score Credit Report

FICO® Credit Score | Credit Report | Credit Rating | Missing Car Payments

Missing your car payments can create all sorts of credit problems in many different areas. As most of us rely on a car to get us to work, it is essential to make sure you have enough money set aside to make the payments and if your budget shows that this is placing too much of a strain on your finances then you might need to downgrade to a vehicle that is more affordable. Your FICO® score on your credit report also depends on it.

Finance companies are legally entitled to repossess your car without getting a court order if you miss your payments, and they can do so without warning. When this happens, the repossession will be noted on your credit records and will remain there for the next seven and a half years so this is one area of your spending where you will need to make the appropriate decisions in advance to keep your credit rating intact.

Once your car has been repossessed the finance company will generally advertise it for auction to help recover the outstanding amount of the loan.

Unfortunately for you, the problem of your debt doesn’t stop there. If the vehicle is sold for less than the amount you still, plus the costs involved in repossession and selling the vehicle, then you will be liable to repay that deficit to the finance company.

So you will have lost the use of your car which will impact on your ability to get to work and earn a living and you are still lumbered with the debt that will need to be repaid to the finance company. Your FICO® score on your credit report will also decline with this unpaid debt.

If you are struggling to make the payments, it is better to contact the finance company in advance of any action to see whether you can refinance the vehicle over a longer period where the repayments will be a little less and more manageable.

They might also give you the opportunity to pay off any outstanding debt by coming to a suitable arrangement. This could give you enough time to sell the vehicle paying off the loan and finding a vehicle that is more suitable for your current financial position.

Bottom Line - Do not neglect those car payments, your FICO® credit score, credit report, and your credit rating depend on it.

Dr. Robert Miller, PHD
Investigations Analyst
www.TheCreditRobbers.com

Contact Us: Send a FormMail Message

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