by Matt L.

Created on: June 05, 2008   Last Updated: June 19, 2008

When times are tight and you need raise some quick cash, there are five critical areas that need to be avoided if you want to keep your credit rating from diving into the dumpster.

First, let's start with predatory lending. If you are in the market for a mortgage, a credit card, or a loan of any kind, this is definitely something you need to be aware of. Predatory lending is nothing more than theft by deception, where the lender is in the practice of intentionally misleading a customer to agree to unfair or unrealistic loan terms. Often these loans are a type of collateral loan, whereby you put up a house or automobile as collateral. That way, when you default on the loan, they have something they can sell off to make back their money and then some. Meanwhile, you, the consumer, is often left high and dry and in worse shape than when you started. The Center for Responsible Lending http://www.responsiblelending.org/ can help.

Next I would like to discuss pawnshops. Many people look at a pawnshop as an easy way to get some fast coin in their pockets, but many do not realize what they are getting themselves into. Did you know that the interest rate at a pawnshop could be as high as 100% of the loan value? Here is basically how it works; you bring in an item of value, the pawnshop pays you for the item (usually for much less than the item is actually worth), and then you have a predetermined amount of time in which to pay back the money (plus interest) that you agreed to. If you do pay it back, in full and within the terms of the agreement, you will get your prized possession returned to you, but if you default on the terms of the agreement, your valuables could be gone forever. Unless of course you manage to buy it back for twice what they gave you for it! If you are thinking of pawning some of your treasures, check out this report on Fox Business first http://glickreport.blogs.foxbusiness.com/2008/04/02/ need-extra-cash-hit-the-pawn-shop/.

Credit cards, in general, are not a bad thing, if you use them responsibly. One of the problems with credit cards is that people always seem to think; "the more, the merrier", which unfortunately, is just not the case. Many lenders entice you into spending more than you can afford to pay by giving you high credit limits or pre-approved offers. Just because they give you a $10,000.00 credit limit does not mean that you are able to afford $10,000. It simply means that the issuing credit card company perceives you as worthy of this

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