Everybody makes mistakes. Mistakes may be one of the few things that every human being on the planet has in common with every other human being on the planet. No matter how well educated we are or how street smart we are, we are all going to make mistakes in our lives. It's a given.

Mistakes in debt management are one of the most common of all the possibilities.

Getting in over your head financially speaking has become so commonplace that an entire industry has emerged to deal with the problem. It really isn't hard to see how and why this happens.

The credit card companies make getting into deep debt easy. Anybody who has a social security number can get a credit card. You fill out an application, of course, but the information on the credit card is not verified. Employment is not verified and other debts are not considered when a credit card is issued. Even dogs (the real kind that have four legs) have been issued credit cards.

The spending limit that is set on a credit card can be anywhere from a few hundred dollars to many thousands of dollars.

Then we are all bombarded with advertisements for goods and services that are very attractive. Our friends have stuff, and our neighbors have stuff, and we want the same stuff. With credit card in hand, we set out to get the stuff, and suddenly there is a mountain of debt.

There are about three options: debt consolidation loan, home equity loan, or bankruptcy. Most people will choose either a debt consolidation loan or a home equity loan in an attempt to clean up past debt management mistakes.

Either works, but unless lessons have been learned well enough that they will not be repeated, the industry can depend on repeat business.

Tags: foreclosure, credit rating, financial problems, manage debt, credit card debt, no credit crunch, managing mortgage

Overwhelming debt is now a part of the American way of life, apparently. (This phenomena is catching up fast in the rest of the world as well!) Too many people buy too much stuff that they can't afford and end up drowning in debt. The total amount of their monthly payments is more than the total amount of their monthly income.

Rather than seeking help right away, most people try to dig themselves out of the hole, but usually just end up making the hole deeper and deeper.

Finally, these people will come to the overdue realization that they need help, and they will start the process of finding a debt management service that can provide that relief for them.

It will very soon become apparent that there are more debt management service companies out there than they ever imagined. Each individual thinks that they are the only one who has ever been in this position. Boy, are they ever wrong!

Overwhelming debt in America has caused an explosion in the debt management industry. Choosing the right debt management company is more difficult than one ever could imagine.

First, most debt management companies provide consumer credit counseling free of charge. Not all of them do…but most. A credit counselor will discuss a debtor's finances with him in great detail.

The counselor will want to know about each and every debt that is owed, the date of the loan, the amount, and the balance on the loan. This will include every debt — mortgage, car payments, utility bills, phone services, cable TV service…and of course, credit card debt.

Once the consumer credit counselor has gathered all of the information, he or she will make recommendations about how best the creditor can get control of his debts and how the company that the counselor works for can help. This is where fees are discussed.

Tags: credit card debt, debt relief, consolidate your debt, no credit crunch, credit crunch, financial problems, being foreclosed on

There is so much information (and misinformation) out on the net about credit scores.

Some people are under the impression that a credit score and a credit report are one and the same thing. That is wrong. They are two entirely different things.

The credit SCORE is based upon the credit REPORT. Credit scoring is just a simplified method of identifying good credit risks from poor credit risks. You can bet that lenders will get a credit SCORE before they proceed with the loan process but before a loan process goes very far, the lender will get full credit reports and from all three of the credit reporting agencies.

The credit score is based only upon credit history. The things that determine a credit score are whether payments were made on time and in full as well as on other things that are contained in a full credit report like employment history and income level. Points are awarded for each of these things as well as many others.

You might say that the credit score is a snapshot of a credit report — a summation, if you will, that gives lenders a good idea of whether an applicant is a good or bad credit risk.

Some people believe that if they stay out of debt and pay in cash as they go, they will have a good credit score and a good credit report, but that is just wrong. They will have no credit history, no credit score, and no credit report. All of these things are based upon credit — payments of loans and debts. You must have been granted loans by banks, or you must have a credit card payment history, in order to have a credit score or a credit report.

The fastest (and least expensive way) of building credit history is to get a credit card, make charges, and then pay them off before any interest is added.

Tags: debt management, consolidate your debt, mortgage, credit repair, no credit crunch, debt consolidation, credit card debt