Posts Tagged Personal Credit Reports
Truth About Paying Collection Accounts and Credit Score
There is one thing most bankrupt people have in common…collection accounts.
However, it’s been my experience that most bankrupt people want to do the right thing and pay off the account(s). Sometimes it just takes a little time. And when you do the right thing, you expect the collection agency to do the right thing, too-don’t you?
Well, unfortunately, that’s not always the case.
Paying it Off Doesn’t Improve Credit Score
Even after you pay it off in full, and your credit reports show that you’ve paid the collection in full and have a $0 balance, it won’t help your FICO credit scores.
Here’s why…
Any appearance of a collection account on your personal credit reports lowers your credit scores. Once it finds its way onto your credit report, it’s part of your credit history. Whether you pay it off or not is of little consequence.
Original Dollar Amount of Collection Account Doesn’t Matter
Whether, the collection account is $100 for a severely overdue library book or $5,000 for 50 overdue library books-the end result is the same-your credit scores can decrease by the same amount.
This is a critical point. Many people think that because the debt is small, it can’t possibly hurt their credit scores.
Wrong.
Everyone knows that late payments on your mortgage or car loan, which can be hundreds or thousands of dollars, will damage your credit. However, if you let even a small $70 amount go to a collection agency, and it appears on your credit reports, it can damage your credit just as much.
Bottom line: anything from a collection agency that appears on your credit reports is going to decrease your credit scores. So, become extremely vigilant in protecting your credit reports from this type of information appearing in the first place.
Check Personal Credit Reports for a Collection Account
It’s a good idea to check your personal credit reports on a regular basis. When was the last time you checked yours? Now would be a good time. Go to http://www.myfico.com/12 and pay close attention to any negative items in the Public Records section.
Another option would be to subscribe to a credit monitoring service that allows you to monitor all activity on your three credit reports.
To Fight or Not to Fight…
If you want to win the credit scoring war, you have to know which battles to fight. The little battles over small dollar amounts are the ones you want to avoid. You’re going to lose those…even if you’re right. In my opinion, it’s not worth the risk of lowering your FICO credit scores.
Here’s an example of how a collection account can damage your credit. It comes from one of my readers in Marietta, Georgia.
She lived in an apartment with two other girls. They had all signed the lease. When they moved out, the apartment complex assessed them $300 in fees to cover damages to the apartment. Two of them sent in $100 each, but the third didn’t bother.
When the apartment complex sent a letter to all three girls demanding the last $100, the girls ignored it.
You guessed it-it eventually showed up as a collection on all three of their credit reports. That collection, for only $100, lowered her Equifax score from a high of 720 to a low of 512!
This was years ago-and her score still hasn’t fully recovered.
Wouldn’t it have been worth it for them to swallow their pride and pay the last $100?
Other Items that Show Up in the Public Records Section
Other items that can show up in the Public Records section and are treated much like collection accounts by FICO scoring models are:
- Federal and state tax liens (released and not released)
- Judgments and satisfied judgments
- Bankruptcy
When any of these items show up on your credit reports, your FICO credit scores go down.
How much? There’s no specific number, but your scores can easily go down by 100 points…or more.
Sure, if you pay off the collection it will show a $0 balance on your credit report. The problem is-from a credit scoring standpoint your FICO credit scores will go south regardless if the public record item is paid or not.
So the moral of the story is-once a collection account appears on your personal credit reports, you can’t resolve it by paying it off. You’re better off paying what you owe before it gets sent to a collection agency and shows up on your credit reports.
Sylvia
Small Business Credit Reports and Scores
You know you have personal credit reports and credit scores, but were you aware that if you run a business, you also have a business credit report and score? If you run a small business, find out why it is important to access your own reports and those of your customers, vendors and suppliers and how that information can affect whether or not you get access to an increased credit line or more stringent credit terms for your company.
Your small business credit report and score can indicate to a potential customer, vendor or supplier your credit worthiness and can have factor in the what kind of credit terms you get or if you get any financing at all. They will see how many accounts you have opened, how many of those accounts are past due, the average amount you owe, and whether you have ever been past due on any of your accounts.
You can also get access to public records such as bankruptcies, judgments, liens, alternate company names and other DBAs all on a small business credit report.
All this information is then compiled and given a credit risk score by Equifax which can indicate how likely a company will fall behind over 90 days on their bills or result in a charge off over the next year. Wouldn’t this information be useful in deciding on who to do business with?
Equifax also provides a business failure score which can predict how likely a big business will fail and have to file bankruptcy over the next year.
There are no free business credit reports as their are with personal credit reports. You can chalk up the cost of this information as a cost of doing business which can save you thousands of dollars by going with a responsible vendor or supplier or new customer who will not default on their payments.
Buying small business credit reports and scores can help you make smart decisions about who you decide to do business with and can prevent you from working with an unreliable customer, vendor, or supplier who has a lousy payment history and keep your cash flow low.
Allison
Free Credit Report – Advantages of Viewing Personal Credit Reports
Consumers viewing personal credit reports at least once a year are taking advantage of the best means to maintain accurate information. This is the most important document in an individual’s financial portfolio that can either open doors of opportunity to receive the best interest rates, or receive disappointing high interest offers due to low credit scores. Taking advantage of receiving free credit reports from all three reporting agencies is the first step in ensuring that personal and credit information is correct in each file. Many individuals receive their scores and credit history and begin the tedious task of reviewing current and past personal and payment history.
Many times, adult children’s information will be inadvertently included on their parents’ history. Sifting through the many years of different residences, creditors, and payment history can be overwhelming, and consumers may turn to the professional services of agencies that offer to clean up personal files quickly.
Time can be saved with the help of an experienced financial assistant that specializes in resolving credit problems, reviewing each credit report and correcting all mistakes. Complaints documenting credit errors will be sent to each creditor in writing, stating the problem and the dates involved in each particular credit issue. The professionals will encourage consumers to request their credit files on a monthly basis until all the mistakes have been taken care of, and no longer show up on the reports. The most reputable agencies offer a free trial period for interested clients. When the decision is made to improve credit scores by notifying creditors of errors, the agency you will be working with will set up a reasonable customer payment plan to pay for their services.
To further pursue a particular service, check with the Better Business Bureau to receive any negative or positive transactions that customers may have reported. Due to the current state of the economy, interest rates are at an all time low. Now is the time to purchase a boat, car, or home and receive the best possible interest rate on the market. A squeaky clean report is the best assurance that great financing opportunities will be offered from multiple creditors. Make the job easy and hire a qualified credit service agency to remove blemishes on credit reports and raise credit scores quickly.
Summing up, being on top of your personal credit report and scores is positive, so make the due research and get a copy of your credit files today.
Marion
Unsecured Business Credit – More Credit Secrets
Welcome to www.UnsecuredBizCredit.Com Have you ever thought of the benefit of having the financing capability you need to either start a business or grow your existing business? Well now you can. Its time for you to play in the big leagues. Let http help you obtain up to $1000000 in unsecured business credit. The powerful information in this program will allow you to quickly and easily obtain up to $1000000 with no tax returns, no collateral, no financials, no business plan and no pay check stubs. Because these are business lines of credit, nothing shows up on your personal credit report. In 30 to 90 days you will now be able to obtain unsecured lines of business credit up to $1000000 with your good personal credit scores of 700+. If your credit scores are not 700+ you will be able to repair your personal credit reports within 30 to 90 days. You also be able to access a list of national banks that are still providing unsecured business lines of credit from $10000 to $100000 per bank. Save years of trial and error to obtain the maximum unsecured lines of business credit. Have banks send you pre-approved unsecured business lines of credit without a personal guarantee.
Melinda
Unsecured Business Credit – Credit Secrets for Better Scores
Welcome to www.UnsecuredBizCredit.Com Have you ever thought of the benefit of having the financing capability you need to either start a business or grow your existing business? Well now you can. Its time for you to play in the big leagues. Let http help you obtain up to $1000000 in unsecured business credit. The powerful information in this program will allow you to quickly and easily obtain up to $1000000 with no tax returns, no collateral, no financials, no business plan and no pay check stubs. Because these are business lines of credit, nothing shows up on your personal credit report. In 30 to 90 days you will now be able to obtain unsecured lines of business credit up to $1000000 with your good personal credit scores of 700+. If your credit scores are not 700+ you will be able to repair your personal credit reports within 30 to 90 days. You also be able to access a list of national banks that are still providing unsecured business lines of credit from $10000 to $100000 per bank. Save years of trial and error to obtain the maximum unsecured lines of business credit. Have banks send you pre-approved unsecured business lines of credit without a personal guarantee
Jeff
Unsecured Business Credit – Obtaining Cash Credit
Welcome to www.UnsecuredBizCredit.Com Have you ever thought of the benefit of having the financing capability you need to either start a business or grow your existing business? Well now you can. Its time for you to play in the big leagues. Let http help you obtain up to $1000000 in unsecured business credit. The powerful information in this program will allow you to quickly and easily obtain up to $1000000 with no tax returns, no collateral, no financials, no business plan and no pay check stubs. Because these are business lines of credit, nothing shows up on your personal credit report. In 30 to 90 days you will now be able to obtain unsecured lines of business credit up to $1000000 with your good personal credit scores of 700+. If your credit scores are not 700+ you will be able to repair your personal credit reports within 30 to 90 days. You also be able to access a list of national banks that are still providing unsecured business lines of credit from $10000 to $100000 per bank. Save years of trial and error to obtain the maximum unsecured lines of business credit. Have banks send you pre-approved unsecured business lines of credit without a personal guarantee.
Howard