On October 19th, 1987, the stock market experienced one of “…the largest one day stock market crash{es} in history”. The Dow went down by a value of $500 billion, or 22.6%. Additionally, the Nasdaq composite lost 11.3% and the S&P 500 Index to lose 20.5%. The crash was escalated by a bull market commencing in 1982, characterized by merger mania, hostile takeovers, and leverage buyouts. In order to raise capital to execute company buy-outs, companies issued junk bonds (very risky bonds with high return rates) and initial public offerings (IPOs.) In the 1980s, technologies for microcomputers were booming. These advancements glorified investors’ economic opportunities in many, many companies. Unfortunately, at the beginning of 1987, the Securities and Exchange Commission (SEC) began to investigate illegal trading activities and fraudulent IPOS. The great economic growth, surged by investors buying and selling, urged the Fed to raise interest rates for the short-term. Raising the interest rates caused brokerages to use portfolio insurance. Unfortunately, brokerages would now benefit from the market crashing. The market became unstable, people were attempting to sell like crazy, but there were no people wanting to buy shares due to the market’s instability. This was a downward spiral. Consequentially, the Fed lowered short-term interest rates, thus marking the recovery of the market, implemented by the buyback of companies’ own shares due to the shares’ under-evaluation.

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With the economy in the state it’s in and foreclosures at a record high, many consumers are falling victim to the housing slump. Over the last year renters are being evicted from their residences because the landlord has defaulted on the mortgage. People are being forced on the street and some aren’t even receiving their security deposit back. In these turbulent times educated consumers are beginning to capitalize on the situation rather than falling victim to it. The housing industry is now becoming a buyer’s market with so many homes being sold at huge discounts (so the banks can try to get some of their money back). Everyone that is currently renting is urged to consider home ownership. You can purchase homes for lower prices than ever before and don’t have to worry about ending up on the street because your rental property has been foreclosed on.

Owning your residence also has many bonuses. Your monthly payment is going towards owning something rather than just paying your landlord money each month and having nothing to show for it. A mortgage on your credit report will look favorably to creditors and may increase your credit score. Lenders like to see that you have a diversity of accounts on your credit report and can handle credit responsibly. Now is a better time than ever to consider purchasing your own residence. (more…)

Debt settlement is a great service that allows consumers to pay off their debts for less than the amount they owe. It’s a great alternative for anyone considering to file for bankruptcy. The basic process of debt settlement is you send out monthly payments to a debt settlement company. All your funds are placed in an escrow account until you save enough to make an appropriate settlement offer. Often times debt settlement companies can negotiate your debts as high as 40% of the balance.

The creditors main incentive for settling debts is they can obtain money that would have otherwise been lost if the debtor filed for bankruptcy. It’s even more cost effective for them to settle a debt with you then to sell your debt to a third party collection agency. Often times collection agencies will purchase your debt for under 10 cents on the dollar. Your creditors are not looking out for your best interest when negotiating with you. It’s all about numbers and the bottom line, the quicker you understand this the better off you will be. If you are not familiar with the complicated debt settlement process it’s a good idea to enlist the services of a professional.

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Credit Repair, Now is the Time

Credit repair is more important than ever. Creditors have tightened their guidelines, effectively barring millions of Americans from borrowing money. Mortgage lenders, auto finance companies, and credit card issuers have all raised the bar. Borrowers with lower credit scores can expect to be denied, or to pay significantly higher interest rates than borrowers with good credit. If you have credit issues you cannot afford to ignore the potential benefits of credit repair.

Credit Report Errors are Common

To understand the potential of credit repair it is essential to grasp the extent of the inaccuracies built into the credit reporting system. Over three-quarters of all credit reports have errors. The three major credit bureaus would love you to believe that correcting these errors requires nothing more than a click of the button on their websites. This is far from the truth.

The Cost of Credit Reporting Errors

Wouldn’t it be great if credit reports were accurate? After all, your credit score may be the most important number in your life, and will certainly determine the interest rate you pay on your loans. Your interest rate will determine your payment, and a higher payment means a tighter budget. In short, credit reporting errors put a dent in the quality of your life and cannot be ignored.

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