Florida Debt Collection Attorney: credit risk

Purchase, Buy, History, Bank, Credit, Report

Breaking down this important record — how to read it, how to fix it

It’s important to check your credit regularly when you are trying to build quality credit and avoid identity theft. There are three nationwide credit agencies: Experian, Equifax, and TransUnion that can provide a free credit report once every 12 months. It’s not always the easiest thing to decipher a credit report and know what to look for.
Here are some tips.

Credit report vs. credit score — what’s the difference?

Your credit report has more information and is more in-depth than just your credit score. (Your score is not included in the free report, but can be authorized by federal law for a free.)

The credit report is a detailed listing of all your debts and payments going back through your entire payment history. According to Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network, “For each credit account you have, the report shows creditors’ names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due and whether the account is in default.”

The five sections of your credit report include:

Identifying information. This is where you’ll find your name, address, date of birth, Social Security number and aliases. It may be a good idea to review this information, because you may end up getting charged for debts that do not belong to you.
Creditor information. This section is usually the longest and contains all of your information such as; how much you owe, who you owe, current or past due debts, whether it is opened or closed, and other status information. It’s imperative to make sure that this information is correct.
Collection accounts. This section lists any and all accounts that are in collection. Make sure this information and is accurate, and if you do have debts try to pay them off as soon as possible. Once the debts are paid, be sure to ask the credit bureaus explaining that the debt is paid off.
Public records. Information regarding bankruptcy judgments, liens, and overdue child support will be displayed here. Review for accuracy as bankruptcy and financial problems can remain for 7-10 years.
Inquiry section. This section is a list of businesses that have reviewed your credit information. If there are unfamiliar names checking out your credit, it would be best to contact them and find out why.

In the majority of cases the credit score ordered will be your FICO score which is named for the company that developed it in 1989. Each agency has its own way of calculating the credit score so your FICO score can vary depending on the credit bureau that provides the score. The exact formula for determining a FICO score is classified, but FICO does disclose some basics that can impact your score. For example:

Payment history. Any late payments – credit card, car loans, or mortgages will cause a negative impact to the FICO score. On-time paid bills will increase the score. 35% of a FICO score is applied here.

· Amounts owed. If there is a history of small balances and payments made on time, your score will improve. If there are high percentages of credit owed, it will likely harm your score. This category accounts for 30% of a FICO score.

· Length of credit history. This accounts for 15% of your score and it determines how long your credit accounts have existed and how long since you have utilized some of the accounts.

· Types of credit used. This is worth 10% of your FICO score and looks at a mixture of a number of loans, including mortgage, revolving, installment, and consumer finance. Having different types of credit is beneficial for your score.

New credit. The last 10% of your FICO score is determined by how many new credit accounts are opened up in what period of time. The shorter period of time with more accounts, the more it hurts your credit score overall.

The percentages for each category should be able to assist consumers in determining what areas are most impactful to their credit score.

What if there is an error on my credit score?

If there is a problem with your credit score, call the credit bureau that provided the report and state your case. The bureau is required to make fixes within 30 days or the line of credit must be halted until the problem is fixed. Be sure to plan accordingly and pay off any and all revolving debt!

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext. 245

http://www.marcadislaw.com

Credit Risk

Credit risk is the "chance" or probability that one will lose what they have loaned to another, or will lose some form of financial reward for loaning money, if the debtor fails to meet their obligation to repay the debt. IN our industry, credit risk tends to be as straight forward as a debtor not paying their past due bills.

Credit Risk Management's goal is to have a policy and practice in place that allows the extension of credit to customers or clients that will maximize revenue, and will minimize the probability the a customer will default on the debt. Its a balancing act between getting as much sales, weighed against the risk of customer default.

There are 4 major ways to manage credit risk:

1 Avoid the risk. Simply don't extend credit. Of course, that negates the first part of the goal, maximizing revenue.

2. Control the risk. Create a detailed plan to reduce risk, and cary it out, using your receivables department to monitor and manage the credit to your consumer.

3. Accept Risk. Some businesses say.."well its the cost of doing business" and simply accept a certain percentage of defaults. These businesses tend to be companies pushing into new markets, ones with high profit margins, or companies at risk themselves and pushing an "all or nothing" agenda.

4. Transfer the Risk. This strategy can be expensive but effective. Transferring risk can be done by using a factoring company to "sell" your receivables at a reduced face value for the benefit of immediate cash, or using an credit insurance company.

When the risk pendulum has swung to the wrong side, and its time to call in the debt collection attorneys, Marcadis Singer, PA stands ready to support you collecting from your debtors in Florida.