Credit reporting can be helpful in extreme cases, but it is often misrepresented by collection agencies trying to sell their services. When a collection agency reports a delinquent account to a credit bureau, it does not get the business any money today. What is does is provides a ‘wish’ for a payment some unknown time in the future if the debtor ever has to do a financial transaction that involves a creditor that checks their consumer credit report.
The issue is that credit reporting also can create a liability for businesses because of collection agencies reporting accounts that were not valid debts. This can open the business to legal action – something no businesses needs. It has been estimated that over 41% of the information contained in consumer credit reports is not accurate, and with identity theft on the rise, a business must tread lightly when considering credit reporting.
The Fair Credit Reporting Act regulates the activities of credit reporting agencies. A credit reporting agency under this law means any person or business which assembles or evaluates consumer credit information for the purpose of providing consumer credit reports to third parties.
According to consumer credit report laws, here are some items that cannot be mentioned in consumer credit reports:
A discharge or final order in Bankruptcy Court dated more than 10 years prior to the date of the consumer credit report.
Lawsuits and judgments entered more than 7 years prior to the date of the consumer credit report.
Paid tax liens which, from the date of payment, precede the report by more than 7 years.
Accounts placed for collection or charged to profit and loss by the creditor that are dated more than 7 years before the credit report.
Records of arrest, indictment, or conviction of crime that, from date of disposition, release, or parole, precede the report by more than 7 years.
Any other adverse information that precedes the report by more than 7 years.
Default information concerning U.S. Government insured or guaranteed student loans can be reported for 7 years after actions to collect the debt have been taken against certain guarantors.
At times, people do not know how to effectively manage their credit cards. This is why, their credit score is severely affected and they find it hard to acquire financial assistance from banks and other lenders. In order to make sure that your credit score is not affected, you need to effectively manage your cards. You need to be careful about making payments and using the card for any purchase.
When you make your credit card payments on time, your credit score improves and you can obtain higher amount of credit. On the other hand, if you fail to make the payments on time, your credit score is negatively affected and you may not get any further credit from financial institutions. Here are a few important tips which will help you in effectively managing your credit cards:
- Plan your purchases – Before purchasing or buying any product, determine if it is necessary to buy it. You must make a list of your priorities and stick to that so that you can arrange for the money needed to pay your credit card bills. At any point of time, make sure that you do not purchase something too expensive as it will make you cross your monthly budget or the credit limit on your card. An effective way of way of planning your purchases is to make a shopping list. At the beginning of the month, try to make a list of things you need to buy with the card and stick to that list as much as possible.
- Always check your statements – Check your statements on a monthly basis as the statements will help you understand your spending pattern. Based on your observation, you can try to avoid unnecessary purchases. Also, checking the statements will help you in knowing the minimum payment due for a particular month, so that you can make that payment on time and avoid extra charges or fees. You can easily check your statements online, and you can also use your smartphones to keep a track on your card usage. Mobile alerts can be very helpful in ensuring that you do not end up paying more than what you are supposed to, when you use your credit card for any transaction.
- Try to make full payment – Try to make full payments, whenever possible. When you pay your credit cards in full and within the due date, you do not have to pay any interest on the billed amount. Besides, paying the credit card balances in full will help in improving your credit score. Even if you are not able to pay your credit card balances in full, you should always make sure that you pay the minimum amount due, within the due date. Apart from saving a substantial amount of money on interest, you will also be able to improve your credit score and increase your chances of obtaining more credit in the future.
- Keep a track of supplementary cards – At times, you might forget the fact that you have provided supplementary cards to your family members and these cards are linked to your credit card account. The way these cards are used can have an impact on your credit card account. Hence, you should keep a track on them and also ensure that the transactions completed with them are paid for within the payment due date. Besides, you also need to keep a track of these cards so that you can ensure that the credit limit of your card is not exceeded. If it is exceeded, you will end up paying an over limit fee and other hefty charges.
- Look out for promotional offers – Why pay more when you can get the same product by paying less? Be a little smart when using your plastic money and make sure that you utilize the variety of offers and promotions provided by the card issuers from time to time. These promotions can provide you with access to discounts, deals and privileges across different segments such as dining, travel, shopping and so on. You can not only save money through these promotional offers but you can also enjoy a variety of other exclusive privileges which will enhance your experience of using a credit card. Make sure that you always visit a website where you can find information about such promotions so that you can take full advantage of them.
When a time comes that you or anyone of your loved ones or family is sick, having emergency funds can be of great help. You’ll never really know when an emergency will arrive and catch you and your finances off guard. The high costs of hospital bills and prescription drugs can be overwhelming these days and what if you ran out of money to cover them all? It’s a great thing that these days you have the option to obtain a medical loan. This can be secured or unsecured against any of your properties or assets.
You can go around and run to your friends and borrow money but this takes time – time that you may not have. You can instead turn to lending companies or creditors for assistance. Medical loans can help you cover and settle physician fees and other expenses related to your medical needs. When you have easy access to a medical loan can also help you to buy treatment drugs that you or your family might need. Another good thing about having a medical loan is that while someone is injured or sick and is not earning income because of this, he or she can use the money from his or her medical loan to finance the monthly payments. In many cases it can also cover the expenses at home like groceries and utility bills until one is fit to get back to work and earn income again.
Usually, those people that have coverage for health insurance need not to worry about any medical costs that they incur. But not everyone have health insurance and what if your medical needs or condition is not covered by your existing policy? A loan for medical emergency then comes in handy. This can be particularly applicable in seldom cases where house confinement is required and people are advised to have their own equipment such as a wheelchair, oxygen tanks and others along with doctor visits and stay-in nurses at your house. The principal of your medical loan can help cover all these.
There are special cases like loss of income due to one’s injury or illness where lenders can defer the agreed repayment contract. With this provision, you can just focus on getting well as soon as possible rather than worry yourself with late charges.
Bad credit lenders are the best creditors of medical loans that everyone can run to in case of emergencies. One of the best parts about this is that they approve loans faster and easier even for those with bad credit. Many people are even shocked at their competitive rates.
The market is filled with these reliable lenders. Be sure that you do your homework first before going to one creditor for your much needed medical loan.
- Transferring money online to your child abroad. If you have a child and they are studying or travelling abroad, using a ewallet is very useful in helping them out when they need a little extra cash. Whether the cash is for school books and supplies, rent and accommodations, groceries, train or plane tickets, sending money online to them can get them out of a bind or back home for a visit in mere moments.
- Collecting money for a fund raiser. If you decide to do a fundraiser for a charitable cause, donors can use an online e-wallet for sending money online. Some payment solutions will even have nifty “Donate Now” buttons you can place on a website, or you can just tell friends and family to send money directly to your personal ewallet. After reaching your goal, you can withdraw the amount and write a check for the organization. Or if they happen to accept donations with the ewallet solution you used to raise money, you can just transfer the money you raised directly to them.
- Paying back a personal loan. If someone lent you money, and you need to pay them back, you can use a payment solution for sending money online. All you have to do is add a credit card to your electronic wallet or add money by bank account, and transfer the money to the person you need to pay back. They don’t even need to have an established electronic wallet account. Once you transfer money to them with their email address, they will be invited to complete registration (which takes only a minute) to claim their payment.
- Paying an invoice. If you bought a product or service from a merchant but still have yet to settle your bill, they can invoice you with a payment solution, making sending money online quick and easy with just one click of your mouse.
These are the most common ways to transfer money online. Writing and mailing checks are a thing of the past and a waste of paper. Online money transfer takes way less time, less effort, fewer stamps, and is friendlier to the environment. Even though using technology to pay bills, make donations, send money to your loved ones and pay personal loans can take a little getting used to, you will be pleasantly surprised at how easy and convenient it is, and how much time you will save in the long run.
How the economy influences the rate of interest
In the constantly fluctuating economy, if you want to make the most of your savings, then you need to put your money in the bank at the right time. You can only understand the optimum time for investment by studying the factors that influence the interest rates. There are numerous factors that pull the strings of bank interest rates. One of the major factors is, of course, the economy of the United States. When the bank is doing well and is in a position to pay high returns, the rate of interest will be high. Banks first focus on sustenance. Whatever excess they are left with is distributed in the form of interest rates. For the banks to do well, the economy has to be strong and so, invest your money when the economy of United States is on an upward swing.
Demand for loans
Banks make money through interests that they receive from loans and mortgages that they provide to people. So, when there are a large number of people demanding more loans, it implies that banks receive higher incomes and hence, the rate of interest will be high. Again, the economy of the country comes into play. When the economy is strong, people can spend more and be able to pay interests for the loans that they receive. Further, banks provide loans only after ensuring that the borrower is capable of paying it back. The incomes of people of the US are steady and their jobs are guaranteed when economy is doing good.
Inflation effects the rate of interest
Pressure of inflation on the nation severely affects the rate of interest. Inflation refers to the condition when the rates of all goods and commodities in the country escalate. So, potential borrowers put their plans for taking a loan on the back burner. They prefer for the economy to recover and inflation to dip so that their standard of living can increase and they can afford to take loans. Having to shell out huge amounts for basic commodities such as food and gas implies a fall in interest rates. Owing to inflation the rate of interest decreases for those who invest their money, the rate increases for those who take loans. Understanding the various factors that effect the rate of interest will help you choose the right time to invest and have some good security for your retirement.