Credit Report Collections

Why would anyone be interested in reading about credit report collections? Well, most the time it’s because they have been denied credit and have ordered the reports to see why. Low and behold there are collections on their credit report. These collections are being reported by collection agencies and they’re killing your credit scores.

When someone searches the internet for credit report collections, they are usually looking to see if there is a way to remove collections from their credit report. The good news is there are a few ways. The most popular way is by disputing them with one of the 3 main credit bureaus (Equifax, Trans Union and Experian) reporting them.

You can also contact the collection agency directly and try to work out a deal with them. You simply ask them to remove it in exchange for paying it in full. This is called pay for delete. Many collection agencies will tell you that they can’t remove it, but they definitely can. Credit reporting is 100% voluntary and anything that can be placed on it can be removed at any time.

If a collection agency doesn’t cooperate with you, simply don’t pay them because even if they upgrade the account to “paid collection” it is still on your credit report for 7 more years from the date you paid, unless you got them to remove it. Of course, you always want to get the agreement in writing as collection agencies don’t always have the most trustworthy people working for them.

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Credit and Collections: Calling Vs Emailing

Superman vs. Lex Luther, James Bond vs. Dr No, Harry vs. Voldemort – so many epic battles are good vs. evil. Not so in credit and collections. Calling vs. Emailing is not pitting good vs. evil but good vs. good or good vs. better or right now vs. later. People have preferences, maybe personal and/or company dictated, about calling or emailing customers for collections related business but both methods have their benefits. The trick is to find the balance that uses the right method at the right time in the right situation.

Calling is an effective way to reach your customers. It is easier to establish relationships when you are one-on-one over the phone. It’s also harder to ignore a problem situation when you are speaking directly with another human. A phone call is essential for all non-routine situations. People are more likely to open up over the phone and you can get more insight into a problem even if that insight comes from reading between the lines. Along that line, it’s easier to solve a problem when you are having a conversation over the phone than back-and-forth over email. Working together to solve problems is also a big component of building close relationships with customers and providing excellent customer service.

Emailing is also an effective way to communicate. Because you can attach invoices and other transactional documents you are assured that your customers know exactly what you are talking about. For established customers who usually pay on time, email is a breeze. Some AP departments don’t answer phones so you must email. It’s also essential for working internationally when office hours don’t overlap due to different time zones. From a time management perspective, emailing is quicker than a phone call.

There are some tactics for using both methods of communication effectively. To start, call all new customers first – in this way you can find out their preferences for future communications. A lot of people will tell you they prefer email – it’s less confrontational, takes less time to respond to than a phone call but it’s also easier to ignore. So you put them on your list of customers to email first. Then, if they don’t respond to your emails, be prepared to call. Same goes for folks who don’t respond to phone calls first. Make sure you have processes in place to follow up if you don’t hear back after 7 days or the 2nd call or email. When you follow up – it is a best practice to use more than one method of communication.

Never rely on just phone or email unless a client has proven to be consistently on-time and always replies in a timely manner to your communications. If you email a customer and get no response, always call to follow up. And if you call but have to leave a voicemail, also send an email. This helps eliminate problems caused by having the wrong email address or phone number as well – the more methods of communication you use the more likely you are to get through to a customer. By using both methods in tandem you get the best of both worlds and are able to effectively use both calling and emailing in the best possible way they were intended.

Keeping Burnout at Bay in the Credit and Collections Department

It takes a special breed of person to call clients and ask for money – and to do it over and over again. It’s a task that’s both adversarial in nature and involves repetitive efforts. While those credit and collection job characteristics are unavoidable, not everyone is fully aware of the impact on staff members. Of all the professionals that make up a media organization, these specialists are more prone to burnout than just about anyone.

The situation has been compounded in recent years by staff reductions and budget constraints – combined with the expectation that employees maintain the same, or often higher, levels of productivity. Those challenges make it crucial for managers to recognize when their staff is overwhelmed, and to have remedies to alleviate the stress.

Burnout often occurs among the hardest-working individuals in the department, as they are usually the ones going to the extra mile to get the job done. According to an article on written by Liz Bywater, president of the Bywater Consulting Group, some of the most apparent warning signals include reduced performance and productivity; increased irritability; quickness to argue with clients and coworkers; decreased creativity, as well as reduced energy and apathy.

There’s a certain irony to the whole situation: when employees are expected to do more with less, it can often have an opposite effect. Not as much work gets done, which clearly ends up costing the organization more money. If the burned-out employee reaches the point of actually leaving the organization, there is the added cost of turnover and an even further loss of productivity.

It’s important to let your staff know that if they are experiencing any of the symptoms associated with burnout, it is okay to speak with you about it. With unemployment running at all-time highs, employees may not be as willing to express any sort of dissatisfaction with their job for fear that they can be easily replaced by a long list of available candidates.

This shouldn’t, however, keep managers from creating an environment that encourages candor, so long as they are able to differentiate between which employees truly are burned-out and need assistance and which ones might just be looking to take advantage of the situation. There’s certainly a delicate balance in keeping two-way communications open while maintaining fairness in the department.

There are other ways to rekindle employees’ energy and focus, depending on a given company’s size and resources. Not every organization has the ability to implement ideas like Facebook’s new Hackamonth program, which enables engineers to join a new team for a month and then go back to their regular positions.

Nor can they necessarily steal a page from Google’s infamous 20% time initiative, which allows some employees to work one day a week on their own personal projects. These cutting-edge programs certainly do a lot to quell burnout and foster an engaged workforce, but they are obviously not an option for most smaller-sized firms.

Credit and collection managers can, however, implement programs on a smaller scale that can have just as positive an effect. One of the easiest to incorporate is a cross-training program, which benefits both the individual and the department as a whole. Something as simple as learning a new task can create a sense of satisfaction and revitalization.

If your collectors are each assigned certain accounts by age of delinquency or by product or region, for example, try switching accounts around after a certain number of attempts, or at different intervals.

Fostering a sense of teamwork and letting staff in on some of the decision-making aspects of their job and the department’s goals can also create a renewed sense of belonging and importance. After all, there are myriad studies indicating workers’ job satisfaction is often derived more from these intangibles than from the actual paycheck.

Ensuring that the members of your staff are maintaining work-life balance also will do wonders. Encourage daily breaks – from a lunch out with the department to a short pause that allows an employee to work on a personal project.

Taking a job-related class or attending a conference or seminar adds variety to an employee’s routine while benefiting the organization. Managers who cultivate an atmosphere where balance is a priority and open communications are endorsed can effectively keep employee burnout at bay.

Dean Churack is co-founder and executive vice president of Media Receivable Management, media collection professionals, in Miami and New York City. He can be reached at or (212) 785-4715.

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Small Business Credit and Collections

Credit and Collections is a key function performed or supervised by the owner in a small business. It provides more business than possible otherwise, but it also creates a significant level of financial risk. Familiarity with the credit terms of one’s industry and the typical bad debt experience in that industry is important to know. A bad debt experience of 1% of sales is considered a cost of doing business in some industries.

The credit, collection function should be organized with written policies and procedures concerning: credit application, checking credit, granting credit, following up credit granted and collections. Applications should be based on industry standard forms with at least three commercial references. Local credit agencies and possibly national agencies should be joined to provide the best possible basis for the credit granting decision. Credit limits should be established based on the time in business, the legal form of the business entity, their credit history, financial stability based on financial reports and the volume of business. Sole-Proprietors should be asked to sign a personal guarantee. You would start with a smaller number and based on the applicants payment history increase the limit as general economic conditions allow and their payment history justifies. Credit should be monitored regularly based on an aging of the account.

Follow-up should begin with confirming receipt of the invoice. Then at regular intervals +30, +60 and +90 the follow-up process should be routine and worded to reflect the seriousness of the time past due. At an appropriate point the account should be suspended until payment is received and the account is back to within terms. At the 90 day point a letter should go out notifying the customer that if payment is not received promptly the account will be forwarded to an attorney.

Bad checks can be filed on in the Justice of the Peace office in the State, County and Precinct where it was passed. Checks should be marked NSF or account closed. Stop payments have to be filed on in civil court. Each NSF check should be accompanied with proof that it was mailed as certified in an attempt to collect the debt before it can be filed on in court. Account closed checks can be filed without the proof of certified mail. An affidavit must be completed, signed and notarized. The original returned check, proof of certified mail and the affidavit must be submitted together.

These actions will not guarantee payment, but they will eliminate any surprises that could have been foreseen if due diligence was exercised.

Allan Lindquist is an Accountant with 30 years experience in various positions up to and including VP Accounting Manager and Treasurer/Controller with Profit and Non Profit Organizations. He brings unique insight, clear instructions, and over twenty-five years of experience to all of his Accounting articles. Owner of Lindquist & Associates, Allan’s clients enjoy these same benefits on a personal and regular basis. You can too. Contact Allan at today. For more information on Small Business Matters see his blog at: []

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The Hidden Costs of Computerizing Credit and Collection Departments

Most credit departments in America today have become computerized. The credit analysts and collection specialists have been replaced by customer service representatives. The receptionist has been replaced by an obnoxious sounding electronic voice. All these changes have come at a cost to you, the consumer.

When applying for credit, the consumer is now to reduced to a set of numbers that are entered into a computer. Based upon a specific formula, the request for credit is either accepted or denied. Each customer service representative in the credit department is issued a generic set of instructions, and granted an equal amount of authority regarding how to handle every request. In the collection department, the customer service representatives are also issued generic instructions about how to handle disputed claims.

In collection departments many times, extension and deferral requests are now handled by computers . Injecting technology into both of these departments results in financial and emotional costs to consumers. How many of us have designated thirty minutes of our lunch hour to contact one of our creditors to resolve a problem, and after navigating the electronic maze, have been told the estimated wait for this call would be fifteen to twenty minutes? We have various responses to this situation. Our first inclination is to hang up and get on with our lunch hour. This response is understandable, especially if we are sure that the creditor we are calling is the one who is at fault. Unfortunately it comes with the risk of damaging our credit rating and/or costing us significant late fees or finance charges. Another response is to wait on hold for fifteen to twenty minutes.

By the time we talk to a customer service representative, our frustration level is high, and we will likely will have to ask for a quick resolution because our time is running out. In most work places today, personal phone calls are not allowed on company phones. We are required to use our cell phones to make these calls. If it is necessary for us to spend sixty minutes a week contacting our creditors to straighten out their errors, we are using 240 anytime minutes of our cell phone plans. These calls account for over half of a 500 minute cell phone plan!!! In many cases we experience the ultimate in frustration when we spend thirty minutes of our lunch hour trying to deal with a problem, and we discover that the customer service representative we are talking to does not have the authority to handle our dispute. We end the conversation knowing that we will have to spend another lunch hour on the phone with that creditor.

Waiting on hold for long periods of time during a work day can cause people to compromise their jobs. Since people can ill afford late fees and finance charges, they feel as if they have no choice but to continue with the phone calls which cut into their work day. If contact with a collection department becomes too difficult, people who start the process in good faith, may convert to become people who do not care anymore. In many instances, being denied quick access to credit and collection departments results in customers incurring damaging information on their credit reports. One of the results of eliminating qualified people in credit departments in exchange for using generic computer driven credit guidelines to grant credit, is higher risk and more costly credit. Chances are that customer service representatives will not be able to solve problems such as a computer increasing an interest rate from 6% to 19.9% on a customer’s bill because the payment is recorded as a day late, even though the payment arrived on time and was misapplied by the creditor’s accounting department.

At best, it will probably take multiple calls to the institution to correct the problem. The number of credit cards issued to people that can ill afford to have them is another outcome of generic credit policies. Once again, the subsequent payment defaults on these cards are passed onto all cardholders. Due to the considerable sums of money generated by late fees, finance charges and increased interest rates instated after late payments, credit card companies can afford to carry substandard credit card holders.

Some of the results of eliminating collection specialists in collection departments are:

1) Generic instructions do not cover all collection problems.

2) Customer service representatives do not have enough authority to enable efficient solutions for some common problems.

3) Customer accounts become referred further into the collection process due to inadequately trained customer service representatives who cannot “think outside the box”.

4) Due to computerization, it is rare to be able to access the same customer service representative twice. Therefore the customer has to give the complete account history each time he or she makes a call in order to bring the new representative up to speed.

5) When customer service is outsourced, the people working in the phone banks have no background on the accounts, and are unfamiliar with the original representations made by the company.

6) When outsourcing occurs outside this country, many times communication is difficult due to the limited English vocabulary of the customer service representatives.
Before technology was introduced into corporate America, the sales, credit and collection departments worked in concert. In the corporate environment of today, too many times the sales, credit, and collection departments live out the cliche that the “right hand does not know what the left hand is doing”. The consumer is the one who pays for this chaos.

I had a career in the credit/debt field for 24 years. I have been on the side of banks, leasing companies, retail stores, credit card companies and various other businesses. I worked in debt collections, negotations, and loan workouts. These experiences have become the motivation for me to write articles about debt and finance for both the consumer and business reader.

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Improve Your Credit With Free Credit And Collections Management Tutorials

Have you ever wondered just how important your credit score is to your financial decision making process? When you consider that your score will determine whether you will get that new car or house that you have had your eye on for some time it’s no wonder many people share the same thoughts. The fact is , that even small credit problems can cause you to be turned down for a loan now and a few years later. It is important for you to know what your credit score is, and if it’s not very high then you need to learn how to improve it.

There are a lot of things that can negatively affect your credit: unpaid credit card bills, and even an unpaid traffic fine can give you a negative mark at the credit bureau. A short list of other things that could hold your credit back would be: having a loan go into default, having a loan being sent to collections, filing for bankruptcy, home foreclosure, and maxing out your credit cards.

Ignoring your credit card bills, or not paying your bills at all, is probably the worst thing you can do to your credit score and this is one reason you need credit and collections management tutorials. A late payment is much better than no payment at all. Lenders are looking for people who have a history of paying their financial obligations.

If you’re getting annoying phone calls from third party collectors then this is probably not the right time for applying for credit. When a debt is in the hands of a collection agency, it means that the original lender has given up collecting payment from you and decided to hire someone to do it for them. These days home foreclosure has become a big problem.

Many lenders are sympathetic to having problems of making your mortgage payments or having your home in foreclosure; however, this does not mean that you will have an easy time getting another mortgage loan. Instead of filing for bankruptcy, or going through a home foreclosure, you might try to see a consumer credit counsellor and get these management tutorials to help you.

If your credit is poor, don’t give up. Instead go see your lender and ask them to help you make a plan to improve your credit score. Many people who have a very poor credit rating have been helped to the point of obtaining loans and mortgage much faster than they ever thought possible just by making a credit repair plan with their lender.

Some people who have been turned down have found that their score was just below the limit and were able to make very small changes to obtain a loan by getting credit and collections management tutorials.

Learn to repair your credit by obtaining a free credit report from, a popular credit report and repair website that specializes in providing help with credit disputes and free instant credit reports.

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Building a Stronger Case for Next Day Funding Merchant Account Application

To get a merchant tab ought to be simple. In any case they would be making money on all transactions processed. Thus it is expected that they will be happy on having your business. But is that the case?

The payments industry is a rather competitive one, and processors evidently crave for your business. However they must do the diligence required of them ahead of approving the application of yours. Below we are going to discuss the way of ensuring that the trade credit application of yours is approved, and what you must do in case they are turned down.

Due to the payment industry and the associated jargons being rather complicated we would also be discussing what some regularly used terms that include Next day funding merchant account, payment processor, and payment gateway means.

Merchant Account

Next day funding merchant account is a unique variety of bank credit that is there for the use of holding money made from credit & debit card sales. Those who have been using their cards and have been wondering where the money has been disappearing must know that they have gone into trader credits. Once there they’re shifted to a regular business bank tabs.

Those who wish accepting payments made by credit cards online require either any of the trade account providers issuing merchant credits to the many businesses. Or, they could engage the services of any of the aggregators, which are companies that process transactions through their personal business credits for additional companies.

Ensuring that your Merchant Account Application gets Approved

Gather your fiscal Statements

Fiscal statements happen to be the finest tool you are able to get to the table for leveraging the finest terms of consent possible.

The majority of underwriters would like seeing fiscal stability expressed for knowing that a company will keep on operating successfully in the times ahead.

On the other hand, it is vital that a startup has a very strong balance sheet as this could be what makes them get an approval. They should make use of their fiscal statements or be set build a safety reserve. They would do well by providing the most updated balance sheet, profit & loss statement, and any note from the accountant.

Startups that are yet to complete one year have no reason to fret. In case they have smaller trading volumes, getting approved ought to be easy.

Take your Processing History into consideration

To have a rather strong processing record is one more extremely vital tool for leveraging your application. The greater the amount of currency you trade, and the lesser the chargebacks the vase you build is stronger. The reason behind this is simple and it is that in case you have processed credit cards earlier and have done well why is that going to change? It is not going to. Make it a point to supply no less than 3 months of processing statements provided it is available. 6 months would certainly be going the added distance. If it so happens that you trade great volumes or deal in a high risk item or service try digging up statements of a whole year.

The decisive exposure of Online Merchant Services

For taking payments online you require a connected trade account, a unique sort of bank account for allowing payments by cards over the internet, along with a payment gateway. Such merchant accounts can be acquired straight from attained banks or incorporated with an all-encompassing bureau service.

This sort of account is essentially a line of credit that a bank offers.

The attaining banks lay down stern criteria that do not accept all companies.

This kind of an account is just a part of the equation and you will still require a payment gateway.

A commercial account, whether wired or otherwise, is essentially a line of credit and not a bank account. The attaining bank handles the hazard of potential non-imbursement of the outstanding amount at the time the card bill is pending or when goods are not being delivered or revisited.

If you have a usual commercial account service at your bank it’s is possible for you to get an IMA rather fast. The bank is the one that will supply you with an exclusive trade ID No, which lets you be known when you call for money from any customer debit / credit card.

Virtual merchant accounts – its benefits

IMAs present an extensive variety of lithe payment options. What this implies is that you are ready to accept every major credit & debit card payment over the internet. Then again, you also are able to charge the buy to a personal PayPal account and additional forms of individual accounts over the internet.

IMAs let you accept imbursements in an extensive assortment of currencies.

A reliable IMA supplies your clients with a protected payment choice on the WWW. Even though a great percentage does shopping on the World Wide Web, there remains a great percentage of shoppers who are not all that comfortable in paying for such buys.

Making use an IMA of Online Merchant Services lets you monitor each one of your dealings. Monthly statements that providers of Online Merchant Services offer are a very useful tool all through the self-assessment stage.

How to get yourself such a business account?

The options available are two

On the basis of you being a new company having little trading record or an established one, whether the business plan of yours is comprehensive and ordered or whether ease and minimalism is more imperative than a price saving, a couple of ways of getting such a merchant account are there:

The first option – from an attaining bank

Make an application for one straight through the bank of yours or additional high street bank. If you prefer making an application for an IMA straight via a high street bank, you’ll require a payment gateway. This is what securely tackles the processing among the shopping cart, credit card business and eventually the online merchant account that is being given funds.

The 2nd option – from a imbursement service provide

You also have the choice of making an application for an IMA via a self-governing payment service provider, which include PayPal, Realex or SagePay Payments or as element of a complete imbursement solution on the World Wide Web.

Ecommerce Credit Card Processing is Very Popular among Small Businesses Now

The most recent mode of imbursement, which is credit cards, has been the cause of a revolution in the world of business. Nowadays traders and clients make certain that they’re being benefitted by credit card dispensation. This is a business tool that is becoming trendier among small business proprietors and traders since they are able to have its benefits and comforts.

Credit Card processing for small businesses

Ecommerce Credit Card Processing lets small businesses save much time they have to spend in going about their business activities. Money dealings are now safer and smoother compared to the earlier methods. It also offers a system for carrying out of business activities with minimum likelihood of making blunders in addition to lessening the quantity of manpower required. In addition, just as is the case with large-scale businesses, small ones are also able to utilize this tool for building up goodwill and boosting their repute and position.

Ecommerce Credit Card Processing entails transferring of the money to the account of the customer through electronic access. All clients get to reimburse for his/her shopping straight from their accounts. Accordingly, these passes are turning out to be a necessity in the scenario of today and small businesses are able to use this for maximizing their benefits, mainly their trustworthiness. Whenever companies provide this facility, the clients tend to develop a fondness for that corporation since they feel more secure in dealing with that corporation. The corporation is portrayed as more large scale and dependable concern. With safety being the key interest of a customer small businesses are likely to benefit. Making use of a wireless / cellular phone handling device will impress the clients since they are not going to anticipate any small corporation to offer this facility.

A case in point is a state of affairs where a client steps inside your store and cannot purchase all that he/she would have liked to due to the fact that he/ she do not have enough money to do so. If the client is provided with this credit card facility it is going to be of help to her in shopping better.

Things to consider while picking a merchant account

A merchant account is the key to the success of these passes processing for small businesses. However, quite a few precautions required being taken ahead of picking a merchant account for you. You must not ever select any bank’s merchant account with a bank without elucidating definite points concerning the time that would be taken for the funds to get transferred, the terms as well as conditions, and more. An appropriate evaluation of the charge offered by diverse banks must also have an impact on your decision. Hunting a bank that offers levelheaded charges for all small businesses is not a tricky thing. Moreover, cell phone pass dispensation gear is suggested to better sales, and boost the expansion and growth if it so happens that a business is being carried out done outside of the workplace environment.

Factors that Affects Credit Score

Lenders use the credit score to determine the risk of lending money to a borrower, how much they are willing to lend and at what interest rate. The three common types of lenders are credit card companies, auto dealership and mortgage bankers.

Credit score shows the history of financial stability and handling responsible credit management. The higher the score, the better loan opportunities you will have. Agencies like CIBI compile these credit scores based on the data in your credit file. A good credit score makes all the difference when you’re trying to buy your first home, purchase a new car – or whatever goal you have.

Factors that affect your credit score is crucial to avoid unnecessary dilemmas in the future. Here’s a few tips you must understand to improve your credit scores.

1. Payment history

This accounts for approximately 35% of your credit score. Late payments on your current and past credit accounts heavily weigh in calculating your score. Other negative factors include: foreclosures, missing payments, and bankruptcy. Establishing or re-establishing a good track record of paying on time have a positive impact on your score. Develop a plant to meet your payoff goal. Make loan payments on time. Get current and stay current.

2. Debt account

About 30% of your credit score is based on your debt account. Financial planner Sophia Bera, who wrote the book “What You Should Have Learned About Money, But Never Did,” says, “having lots of available credit but only using a small percentage of it is good for your score. Having a small account of available credit and charging up to the limit – even if you pay off the balance monthly – won’t help your score.”

Consider the amount you owe on specific types of accounts, such as installment loans and credit cards. When you’re close to “maxing out” several credit cards, you may have trouble making payments in the future. If you’ve been using your credit card on multiple shopping sprees and not paying your balance on time, this negatively impact your score. Having a large balance every month in several, if not most, of your credit cards can affect your score. Potential lenders will make the assumption that you are struggling to make ends meet, and using these credit cards as a crutch to get by. Unsolicited credit cards that arrive by mail, or pre-approved card application may be tempting, but these will not help your credit score in the future.

3. Length of credit history

About 15% of your credit score is determined by your credit history. Length of credit history refers to the age of your oldest account, age of your most recent account and the average age of the combined accounts. A long history is helpful, it means you have the financial capacity to sustain your account and your financial behavior. Credit history also reveals your payment patterns. If you have a habit of missing payments or applying for new credit cards, these may take a toll on your credit score. Lenders would rather see you maintain your longest-standing accounts than your history of closing and opening new accounts. It is an indication that you have been able to efficiently manage your credit. If you have no credit history, lenders might consider other factors such as employment history, residence history and bank accounts.

In the Philippines, companies who intend to identify the financial records of loan applicants avail the services of CIBI Information, Inc., also known as CIBI. CIBI is the Philippines’ first credit bureau spanning 33 years of experience.

“CIBI is in partnership with internationally acclaimed and recognized consumer credit score provider that has become the fixture of consumer lending in the US and the world. CIBI aims to provide a National Credit Score inclined to the worldwide standards for the financial growth of every Filipinos.”

Empowering yourself with financial knowledge means financial success. It’s never too late to understand about your finances especially if you have goals to achieve. Get a head start by learning these factors that agencies, like CIBI, are using to get your credit score. A high credit score is not impossible to achieve if you are fully equipped with information.