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If you do not know where to begin consolidating your student loan you need a good financial strategy. Student loan consolidation can alleviate the stress on your budget. Student loan consolidation simply means that you are combining all of your student loans into one account with a monthly payment plan. Your past student loans are written off and a brand new student loan is created that allows you to pay only one company every month.

What then are the advantages of a Student Loan Consolidation?

• It creates less financial stress for you. It is hard to keep tabs of all of your bills in a given month. With the loan consolidation you only have to think of one. Sometimes you might be remiss in your payments in the past because you simply forget all about it. You do not need a credit card check to complete the student loan application. Payment schedules are also flexible and tailored according to your financial standing.
• You will pay less. Even if your consolidated rate is the average figure of your existing loans, the resulting rates are slightly less so the monthly payment is lower. By law, student loan consolidation rates cannot go over 8.25%. Present national interest rates are at the lowest so this is really a great time to acquire a student loan consolidation. Although electronic payment is not required, most loaners subtract 0.25% off your student loan rates if you pay electronically. You can also advice your bank to subtract these payments automatically every month so you will not forget paying for them.
• Build you a better credit history. There are instance when you have not paid on time so you gain a bad credit report in your credit history.
• No pesky creditor contacts.

The most important thing to do is to choose the best lender that you can find. Read the contract especially the fine print so that there would be no unpleasant surprises that can come your way. The government is presently offering competitive rates compared to the private sector.

Bankruptcy does lead to a crippling situation. Assets are more likely to get washed out and debts will still haunt you years after. Next, you will observe that after bankruptcy proceedings your credit standing drops to God knows how low. But hey enough with lingering on your dread, it’s time to pick yourself up from the slump your in. Think your bankruptcy as a major reboot, a fresh start to rebuild and to live wisely. There are ways to get oneself credit repaired after bankruptcy. It all takes a major unlearning of bad habits and a few learning of good ones.

Change Your Bad Habits

First thing that you have to unlearn are bad habits. Overspending is one big mistake that many people are fondly tempted to commit. I remember an alarming news in the past where credit cards companies are targeting college students. The consequence is mounting debts for a no-wage earning adolescents. Even earning professionals are not exempt from making poorly thought of decisions. Impulse buying can be so damaging. The remedy is to plan out your monthly expenses and sticking to it. Setting aside 10% of your income as savings can be a source of emergency funds or become a tool for you to buy assets in the future.

Next rule to learn is “study and examine all investment ventures”. Majority of foreclosures occurred because of bad investment decisions. Many had been enticed by sub-prime lending, which many people can sustain under a healthy economy. But when recession crept in and brought job loss and skyrocketing interest rates, that’s when the investment collapsed.  The most hurtful part comes when the property was acquired thru a loan. It ended with people losing their asset and gaining more liabilities with the bank. The lesson here is never enter into a volatile investment using borrowed money.

Third, ants teach us a valuable lesson of having contingency plan during tough times. Job loss wouldn’t have been too difficult if there was about 6 months worth of savings set aside to tide one’s way until you find another job. Ants teach us to save up for the rainy day. Maybe one should learn from that moving forward.

After learning from your mistakes, it’s time to get oneself moving to getting your credit worthiness back up. Bankruptcy does deliver such a huge blow to your credit score and it sticks on your credit report for years. However, this is not a dead end but just a temporary road block. You could get credits after a bankruptcy.  Here are the ways to reestablish your credit worthiness.

Being informed at the rudiments of credit scoring is a powerful tool. Knowing the considerations to generate your score puts you at the advantage as you would know what efforts are needed to get your score up.

“Payment History” forms 35% of your credit score. That means you have to start and continue to be a faithful payor to your creditors.

“Amounts Owed” is weighted to be 30% of your score. You should at least keep your outstanding balance to the least possible amount. The higher one’s outstanding due the lower the score.

“Length of your Credit History” forms 15% of your credit score. The shorter you are able to repay and close the loan the better it affects your credit standing.

“New Credits” are recently approved loans or credit lines. Having just a few would be best. 10 percent of the credit score is taken from this category.

“Types of Credit Used” is about the credit variation you are involved with. A mix of secured credit cards, student loans and extra loans like buy now pay later increase your score. This category forms 10 percent of your credit score.

What To Do After Bankruptcy

Now how do you work on these categories? First, get a secured credit card with a nominal interest rate. Since Bankruptcy will prohibit you possessing an unsecured credit card, a secured credit card will be your tool to work on all factors. Might be scary at first since most bankruptcy is due to credit card misuse but I tell you, this is your way to recovery as well. Just remember what you learned from your mistake. This time, use the 35/40-day no-interest period on your card and zero out your debts. Another trick is to bill something on the card and pay it off shortly. This will do good on your payment history and the amounts owed.

Next, get other credit sources. This will be for the types of credits used, payment history and amounts owed. You may want to consider having a short-term loan like a student loan or a bad credit loan that has a negotiable interest rate. By paying these loans religiously, you would definitely get good points for the above mentioned factors.

Fourth, never close any zero-balance accounts. They do not pose any risk for you but instead they work wonders for your credit report. It would indicate you having a wide number of credit used, a good payment and credit history.

Having a good business relationship with your lenders would work to your advantage. This would allow you chances of renegotiating your terms at a time when you are in a tight situation. This would also work both ways as the lenders are guaranteed of continued payment and you reduce the risk of having a bad remark on your credit report.

Lastly, keeping an eye to the entries that get sent to the credit bureau is a good thing to do. It would be best you are subscribed monthly to one credit bureau report and get a copy of the other two credit reports annually.  Or better yet you can subscribe to TrueCredit for under $20/month and get real time monitoring from all three major credit bureaus.

Credit history also goes by several names such as credit report and credit reputation. When you are trying to apply for a credit card or any type of loan most lenders will look for your credit history. Your credit history or credit record is maintained under the three major credit bureaus. They are Equifax, Experian and TransUnion. Credit history contains your Fair Isaac Corporation (FICO) score that can help lenders decide whether you are credit worthy or not.

Credit history is simply your financial past reflected on the records. Having a good credit history allows you to avail of a bank loan, get a job, have better insurance rates and reflects you as a good tenant if you are renting an apartment. Once your credit reputation is build up you should keep it in good shape. Having a bank account with a reliable bank reflects on your ability to make immediate payments on your bills in an attempt to establish a good credit history.

Credit history contains complete information on where you live, how you pay your bills and whether you have been sued, arrested or have filed for bankruptcy. Credit reporting companies sell your information to creditors, insurers, employers and other legitimate business that may need them. They used this information to evaluate your application for any loans and the like. Having a good credit history will make life easier for you since you will be able to get loans and lower interest rates. Lower interest rates helps you make smaller monthly payments.

Be careful of paying on time since this can damage your credit history. “Prevention is better than cure” when it comes to fixing your credit score. Once you have the credit report in your hands be sure to carefully inspect this. Keep in mind that these credit records are maintained by humans who can commit an error anytime. Filing for bankruptcy will also be reflected on your credit report and will stay there for 10 years. Increasing your credibility can mean an increase in your reliability as a potential borrower.

Some of the factors that will improve your credit score have to do with you holding a steady job for a long period of time and no frequent movements in your place of residence. Beware of scam artist who offer that they can erase your negative credit history since in truth they can never deliver since what can really help is being able to repay your bills on time will improve your credit report or credit history.

Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), requires the three major credit bureaus to give you a yearly credit report for free.