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Monday, January 26 2015

A charge-off is an accounting term used for when a creditor writes off or charges-off a debt that they are unable to collect on. Creditors typically charge-off a debt if there is no payment on the account for more than 180 days.

 

A charge-off is an accounting procedure for tax purposes, used by the creditor, where an uncollected debt or charge-off is reported as a loss for the creditor. However, this does not mean the debt is forgiven.

 

Once a debt charges-off, the creditor usually will sell (typically for pennies on the dollar) or assign the debt to a collection agency to tempt the person into paying. Charge-offs will remain on your client's credit report for 7 years.

 

Paying an old charge-off will not remove it from the credit report. Instead it will update the status to “paid charge-off” which is slightly better but still bad. The impact of paying off an old charge-off, can be devastating to a credit score.

 

It is much easier to get paid charge-off’s removed than unpaid charge-offs. There is no incentive for the creditor to fight the dispute, since they already have their money. So if you dispute the charge-off, on behalf of your client, with the credit bureau, the credit bureaus will send a verification request to the creditor. Most often the creditor will ignore the verification request.

 

Unpaid charge offs can be much harder to dispute and remove. Always try to dispute the charge-off with credit bureaus at first - often you can get the charge-off removed in the first round of dispute letters.

 

However, it is possible for the creditor to ignore a verification request if the person still owed them money. Nevertheless, it is still worth a shot to dispute it and see what happens. 

 

Another way to remove an unpaid charge-off, on behalf of your client,  is to contact the original creditor and arrange a payment plan - in exchange for them removing the charge off once it is paid. The success rate of this strategy is hit or miss, but it won’t hurt to ask how it can be resolved or removed.

 

Depending on the creditor, this can be a great way to get an instant increase to a credit score and permanently remove a derogatory item.

 

Creditors and collection agencies are well aware of the ramifications negative items have when reporting on a credit report, they understand the benefit to a consumer if an item was deleted rather than being marked “Paid Derogatory." Due to the obvious benefits, collection agencies will take advantage of this opportunity to create additional revenue.

 

A collection agency will often offer a settlement for 20-40% of the original balance as a typical agreement; however, a “PFD” (Pay for Deletion) settlement will come at a much higher cost.

 

Collection agencies will typically demand between 60-100% of the debt to negotiate deletion of an account. This is a major benefit for the collection agency because they have not incurred any additional costs for this type of negotiation. Your client benefits, as well, due to the collection account being quickly deleted!

Posted by: Kevin Foster AT 10:15 am   |  Permalink   |  0 Comments  |  Email
Saturday, January 24 2015

Recently I received a call from a prospect that was wondering if he should pay off a 4 year old collection in order to get it removed from the credit report. He owed less than three hundred dollars and was wondering if he should pay that off? He was confused because his neighbor told me that the only way you could get it removed was by paying it!

My advice to him was that he should NOT Paying that collection. Why is that? You see if he were to pay off that four year old collection, he will wind up with a paid collection as a today, rather than unpaid collection from four years ago.

When you are thinking about paying off old collection you have to consider the date reported. The older the reporting date (regardless of payment status) the better. If he were to pay off that collection he would be changing the date reported to today. The result of that action will tank his credit score at least in the short term. He would actually reset the clock for that activity (Date Reported) which could then keep that collection on his credit report for another seven years from that point.

A four-year-old collection with a small amount like that you should just ignore that and let the collection just run its course. Now the good news is that did check the state statute of limitations in his state (although the Fair Credit Reporting Act is a national law). He told me that his State law was seven years, so three more years the collection will fall off.  Just remember that if you do have a collection account and it is less than a few hundred dollars, and three or four years old, don’t worry about it, focus on other things on your credit report.

Posted by: Kevin Foster AT 01:01 pm   |  Permalink   |  0 Comments  |  Email
Tuesday, January 20 2015

There is a massive amount of financing currently available for small businesses. Business credit is one financing type that works perfect for many businesses.

The business can build its own credit score and profile and use that to qualify for business credit cards in the business name which require no personal credit check or personal guarantee to qualify.

There are also unsecured credit cards and lines that consumers with good credit can qualify. It’s common to see approvals range from $50,000-150,000 on these accounts, and they work for businesses with no financials, even startup businesses can qualify.

Over 80% of US businesses us Equipment financing to obtain equipment.  Business owners can get financing, even leasing to help with the purchase of equipment, even heavy equipment.And business owners can also use equipment they already own as so collateral and get cash back through an equipment sale-lease-back.

Vehicle wrap financing is a specialized niche type of financing that gets business owners funding to put a graphic wrap on their vehicle.

Commercial signage financing is another nice program that business owners can use to obtain signage for their business.Stocks and securities can be used as collateral for a business owner to obtain a line-of-credit up to 90% of the value of the stocks. Rates on these programs are the lowest of all type of business financing, even as low as 1.6%.

Business owners with a 401k can use that 401k as collateral and get financing for up to 200% of the 401k value. Plus, rates are typically less than 2% for 401k financing.

Merchant advances are another type of financing business owners can qualify for if they accept credit cards now. These are not loans, but actual cash advances against future credit card sales.

Revenue lending is a similar program that uses future cash flow as collateral for financing. Even business owners with bad personal credit can qualify, and get approved within 72 hours or less in most cases.

Business owners with account receivables can get financing within 24 hours at rates less than 2%, even with credit challenges. Account receivable financing is perfect for many industries including the medical and construction industries, and any other that has receivables with their customers.

Companies can also get purchase order financing to obtain letters-of-credit to fulfill purchase orders.Inventory financing can be obtained to purchase inventory, or borrower against inventory a business owner already has and get a working capital line-of-credit.

SBA offers two main programs that can really help business owners. Loans can be obtained up to 12 million dollars.  SBA 7a loans are great for working capital, while 504 loans are perfect for real estate purchases.

There are many private investors, crowd sourcing groups, and angel investors who also have money to lend. If a business owner has a make sense  project and needs funds, sometimes private money is the best way to go when lenders say no.

Business owners can also qualify for commercial real estate financing. Money can be obtained to purchase real estate, and cash-out refinances are also readily available.Business owners can even obtain auto vehicle leasing in their business name through many types of business leasing programs.

Real estate flippers can take advantage of a very special program known as a house reseller program. With this financing can be obtained for 100% of the purchase and rehab costs of properties.

There are a multitude of financing options a business owner has access to if they know what to look for. It’s also important to note that ALL of these programs, and many more, are available to clients through the Business Finance Suite.

We can help business clients obtain money and credit for their business by offering them the TRW Business Credit Finance Program. Let us know how we can help.

Posted by: Kevin Foster AT 01:15 pm   |  Permalink   |  0 Comments  |  Email
Tuesday, January 20 2015

There is a massive amount of financing currently available for small businesses. Business credit is one financing type that works perfect for many businesses.

The business can build its own credit score and profile and use that to qualify for business credit cards in the business name which require no personal credit check or personal guarantee to qualify.

There are also unsecured credit cards and lines that consumers with good credit can qualify. It’s common to see approvals range from $50,000-150,000 on these accounts, and they work for businesses with no financials, even startup businesses can qualify.

Over 80% of US businesses us Equipment financing to obtain equipment.  Business owners can get financing, even leasing to help with the purchase of equipment, even heavy equipment.And business owners can also use equipment they already own as so collateral and get cash back through an equipment sale-lease-back.

Vehicle wrap financing is a specialized niche type of financing that gets business owners funding to put a graphic wrap on their vehicle.

Commercial signage financing is another nice program that business owners can use to obtain signage for their business.Stocks and securities can be used as collateral for a business owner to obtain a line-of-credit up to 90% of the value of the stocks. Rates on these programs are the lowest of all type of business financing, even as low as 1.6%.

Business owners with a 401k can use that 401k as collateral and get financing for up to 200% of the 401k value. Plus, rates are typically less than 2% for 401k financing.

Merchant advances are another type of financing business owners can qualify for if they accept credit cards now. These are not loans, but actual cash advances against future credit card sales.

Revenue lending is a similar program that uses future cash flow as collateral for financing. Even business owners with bad personal credit can qualify, and get approved within 72 hours or less in most cases.

Business owners with account receivables can get financing within 24 hours at rates less than 2%, even with credit challenges. Account receivable financing is perfect for many industries including the medical and construction industries, and any other that has receivables with their customers.

Companies can also get purchase order financing to obtain letters-of-credit to fulfill purchase orders.Inventory financing can be obtained to purchase inventory, or borrower against inventory a business owner already has and get a working capital line-of-credit.

SBA offers two main programs that can really help business owners. Loans can be obtained up to 12 million dollars.  SBA 7a loans are great for working capital, while 504 loans are perfect for real estate purchases.

There are many private investors, crowd sourcing groups, and angel investors who also have money to lend. If a business owner has a make sense  project and needs funds, sometimes private money is the best way to go when lenders say no.

Business owners can also qualify for commercial real estate financing. Money can be obtained to purchase real estate, and cash-out refinances are also readily available.Business owners can even obtain auto vehicle leasing in their business name through many types of business leasing programs.

Real estate flippers can take advantage of a very special program known as a house reseller program. With this financing can be obtained for 100% of the purchase and rehab costs of properties.

There are a multitude of financing options a business owner has access to if they know what to look for. It’s also important to note that ALL of these programs, and many more, are available to clients through the Business Finance Suite.

We can help business clients obtain money and credit for their business by offering them the TRW Business Credit Finance Program. Let us know how we can help.

Posted by: Kevin Foster AT 12:24 am   |  Permalink   |  0 Comments  |  Email
Sunday, January 18 2015

The Fair Debt Collection Practices Act (FDCPA) is a law which protects consumer rights from unfair and unethical debt collection practices.  This law can be very helpful to consumers in stopping collection company harassment and abuse.

 

One benefit of this law is that a consumer can stop any collection company from contacting them by phone and or in writing.  All you need to do is prepare a “cease and desist” letter to get the creditor to stop contact.  (In our next email we will include a cease and desist letter you can use for this purpose.)

 

Some other restrictions from the FDCPA include:

  • A creditor cannot imply that many people are involved in the collection of a debt, if only a few employees really work for the company.
  • Cannot threaten to collect or sue for “collection costs” including attorney fees and non-pre-arranged interest.
  • Cannot threaten to sue or take any legal action against you unless the threat is followed through 
  • Cannot pretend they are legal counsel or an attorney when they are not
  • Cannot falsely claim that the debt, if left unpaid, will be moved to an attorney or other debt collector

These are a few of many restrictions the FDCPA puts upon debt collectors.  Knowing these rights will help you deal with these unethical debt practices in the future and stop creditor harassment.

 

Any of these violations can lead to a potential lawsuit, and can help you have the negative account agreeably removed from the credit report.

Posted by: Kevin Foster AT 03:29 pm   |  Permalink   |  0 Comments  |  Email
Sunday, January 18 2015

Wrap Financing is one of many financing options available for your clients through our business funding suite. This type of financing is for business owners who want to "wrap" their vehicle with graphics.

You have more than likely seen a wrapped vehicle before, and you might even be thinking about wrapping one of your vehicles now.

Wrapping a vehicle turns it into a mobile billboard. Everywhere you go your car is advertising your business.

Many business owners swear by this marketing technique and insist it brings them significant amounts of business.

But, most business owners don't know that they can obtain financing to wrap their vehicles or even the windows in their business.

Wrapping a vehicle sometimes costs upwards of $2,500 or more. But with financing available this makes it much more affordable for business owners.

This is a very exclusive niche program rarely offered. But it is one of many financing products available to your clients through the TRW Business Credit Funding Program.

We can help you as a business owner obtain money and credit for your business by offering you the TRW Business Credit Funding Program.  Let us know how we can help.

Posted by: Kevin Foster AT 12:28 pm   |  Permalink   |  0 Comments  |  Email
Sunday, January 18 2015

Wrap Financing is one of many financing options available for your clients through our business funding suite. This type of financing is for business owners who want to "wrap" their vehicle with graphics.

You have more than likely seen a wrapped vehicle before, and you might even be thinking about wrapping one of your vehicles now.

Wrapping a vehicle turns it into a mobile billboard. Everywhere you go your car is advertising your business.

Many business owners swear by this marketing technique and insist it brings them significant amounts of business.

But, most business owners don't know that they can obtain financing to wrap their vehicles or even the windows in their business.

Wrapping a vehicle sometimes costs upwards of $2,500 or more. But with financing available this makes it much more affordable for business owners.

This is a very exclusive niche program rarely offered. But it is one of many financing products available to your clients through the TRW Business Credit Funding Program.

We can help you as a business owner obtain money and credit for your business by offering you the TRW Business Credit Funding Program.  Let us know how we can help.

Posted by: Kevin Foster AT 10:17 am   |  Permalink   |  0 Comments  |  Email
Wednesday, January 14 2015

Collection companies have done a great job over the years of convincing consumers that paying off collections will raise their credit scores.  Many people are actually surprised to learn that paying off collections will actually lower the credit scores.

 

Collections are usually reported on the credit as a “9” status or collection account. This means the account has already been "written off" and assigned to collections by the creditor.  Once an account is reported this way on the credit report, the damage to the credit score is irreversible, unless that item is removed completely from the report.

 

If the account is paid off, the collection company reports that the account now has a $0 balance, but they do not usually delete the item off the report.  The account has already become a collection, and the risk of the consumer defaulting on another account is already very high, due to that collection.

 

So your credit score will not go any higher if it is paid off, because paying off a collection after the fact, doesn't lower the risk of defaulting in the future.

 

However, the DATE OF LAST ACTIVITY is updated to the date the account was paid off. So if that account was sent to collections 3 years ago, the date of last activity is 3 years old and the impact to the credit score is not as much.  But if you pay off that collection today, they just update the date of last activity to today's date, sometimes causing the scores to go DOWN as a result.

 

Crazy isn't it? You are trying to do the right thing and pay off collections, but their scores can be lower as a result.

 

We can on your behalf to work with collection companies to have the negative item removed completely from your credit report, if you pay it off.  This will help your credit while satisfying the collection company. 

Posted by: Kevin Foster AT 09:33 pm   |  Permalink   |  0 Comments  |  Email
Thursday, January 08 2015

Most people are familiar with how personal credit works. You start with no credit profile, get small credit cards to initially build your credit score, then as your credit grows you can use it to qualify for loans, auto vehicle financing, even mortgages.

With business credit you can do the exact same thing.  A business itself can also start with nothing, put small credit accounts on the report called “vendor” accounts to establish a score, then that credit can be used to qualify for loans, auto vehicle financing, even mortgages.

Having business credit provides any business owner some major advantages. For one, with both personal and business credit built the business owner has double the borrowing power as the owner now has two profiles they can use to obtain credit.

When business credit is built the right way, it can be built with no personal credit check or guarantee. This makes it perfect for credit challenged individuals, and those who want to eliminated their personal liability on their business debts.

All too many business owners get into serious trouble, lose their personal assets, even file personal bankruptcies, all to get rid of business debt. With business credit this doesn’t need to happen as the business owner them self isn’t liable for the business debts, only the business is.

That means in case of default, the lender couldn’t pursue the personal assets of the business owner.  SBA states that business credit approvals are typically 10-100 times higher than consumer credit approvals. So another benefit of business credit is the business can obtain A LOT more money in approvals.

And, business credit can be built quickly, much faster than consumer credit. It takes 6 months for an initial consumer credit score to even be established.  With business credit it is very practical for a business to qualify for credit within 90 days or less, then build that credit to a point where the business is getting $10,000 credit card approvals within 6 months or less. Business credit is one of the strongest assets any business can have.

We can help business owners to obtain money and credit for their business by offering them the TRW Biz Credit Builder and Funding Program. Visit us at http://www.bizcreditbuilder.com for details.

Posted by: Kevin Foster AT 10:31 am   |  Permalink   |  0 Comments  |  Email
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