Archive for April, 2010
Checking company credit is essential for business owners or managers who are considering entering into a contract or taking on a new customer. It is important to trust that any new business will pay promptly and accurately, and a company credit check is the best way of investigating any businesses financial health. The details checked can range from full company or director reports, to images of documents such as mortgages, filing systems and accounts. These are all great tools for assessing a potential customer company, and will enable business managers to make an informed decision before entering into trade agreements or other financial commitments.
Checking company credit is now incredibly easy, as there are a large range of providers online to choose from. Most should have comprehensive and detailed websites, and should be easy to find through any major search engine such as Google. Most will have the facility to search for any company or director online, and will then be able to generate a report or other documentation that is needed. This information can then be emailed to the user, making the transaction very quick and simple. Online payment for the items requested is also a convenient tool, but should only be done through a secure site.
The pricing options for various items will range through different providers, but it is easy to compare pricings online and decide on the most appropriate charging system. Some companies will need to perform a company credit check very rarely. This may apply to smaller businesses, or those with a regularly returning client base. In this instance, any infrequent new customer companies will need to be checked, and many providers will be able to offer a pay-as-you-go option for this style of user. This is charged per item, and is a good idea for infrequent users who will not require the service on a regular basis.
For those who need to check company credit more frequently, perhaps a larger company, or one with a continually changing client base many providers will be able to offer reduced rates for heavier users. This may generally incorporate a subscription fee to cover a certain period of time, but will then provide large reduction of up to around 75% on items such as full company reports. For frequent users, this can work out much cheaper than the pay-as-you-go option, and is a great way to find cheaper rates online.
Many sites may also be able to offer special deals or discounts for new customers, which can be a good incentive for those who are new to the practice. It is also a good idea for those who would like to switch providers, and taking advantage of new customer offers may be a great way to save money over a period of time. Conducting company credit checks for new customers is essential to ensure that any business receives a reliable and steady income, and can ensure that there are no nasty surprises when chasing payments. This is particularly important in the current economic climate, and is good practice to protect any company.
Have you heard of credit monitoring? It is a service that credit reporting agencies offer to you. The service is quite straightforward. For a fee, they will monitor your credit for you to insure that nothing strange appears or that nothing out of the ordinary reduces your credit score. Is an investment in such a service worthwhile?
How Credit Monitoring Can Benefit You
First of all, credit monitoring does do something that has become necessary with the advent of different types of credit fraud. Any consumer, anywhere that uses credit needs to monitor their credit score and report. It is necessary because at any time a negative item is placed on your credit report it can be very detrimental to your future credit needs. Those who commit such fraud do not necessarily need your social security number or other personal details. It all depends on where they use your credit card information.
It is important to know what’s on that record and it is important to know how it got there. The longer it goes without being disputed, the more ‘real’ it looks in the eyes of the law. In this way, credit monitoring really can benefit you because you will be notified right away when negative activity is reported on your credit report.
How Credit Monitoring Can Rip You Off
It is true that such a service can be helpful, but credit monitoring is very expensive, up to $150 per year in some cases. This money can be used to help reduce credit card debt instead. If you are net savvy, then your credit report is a few keystrokes away. All of the major credit reporting agencies can be found online and can tell you’re what your credit report looks like.
Also, in the United States, as of this year, you are provided a free credit report each year from the credit reporting agencies so that you can monitor your credit history. This free product may not be enough, but it is a start. You should check your report often and know what is on it. Ideally, you should check your report every 3 months. If you are going to be making any large purchases e.g. a new house, a new car you should get your report a couple of months in advance so that you can clear up any negative items in time to get the best deal on your purchase.
Reputable credit counseling organizations employ counselors who are certified and trained in consumer credit, money and debt management, and budgeting. Those organizations that are nonprofit have a legal obligation to provide education and counseling.
But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make “voluntary” contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling. Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, and some state Attorneys General have sued several companies that called themselves credit counseling organizations. The FTC and the states said these companies deceived consumers about the cost, nature, and benefits of the services they offered; some companies even lied about their nonprofit status. Several of these companies are now going out of business. Similar companies also may be shutting their doors, even though they haven’t been sued by the FTC or the states. That could be of special concern if you have a debt management plan with one of these companies.
Must-Dos for Anyone With A DMP
Organizations that advertise credit counseling often arrange for consumers to pay debts through a debt management plan (DMP). In a DMP, you deposit money each month with a credit counseling organization. The organization uses these deposits to pay your credit card bills, student loans, medical bills, or other unsecured debts according to a payment schedule they’ve worked out with you and your creditors. Creditors may agree to lower interest rates or waive certain fees if you are repaying through a DMP.
The FTC has found that some organizations that offer DMPs have deceived and defrauded consumers, and recommends that consumers check their bills to make sure that the organization fulfills its promises. If you are paying through a DMP, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the organization handling your DMP. Once the creditors have accepted the DMP, it is important to:
- make regular, timely payments.
- always read your monthly statements promptly
to make sure your creditors are getting paid according to your plan.
- contact the organization responsible for your
DMP if you will be unable to make a scheduled payment, or if you discover that creditors are not being paid.
You need to be aware that if payments to your DMP and creditors are not made on time, you could lose the progress you’ve made on paying down your debt, or the benefits of being in a DMP, including lower interest rates and fee waivers. Although creditors may have forgiven late payments that you made before you began the DMP, the creditors may be unwilling or unable to do so if payments are late after you have enrolled in a DMP. If you fall behind on your payments, you may not be able to have your accounts “re-aged” again (reported as current), even if you start a new DMP with a new counselor. That means your credit report will have “late” marks and you will rack up late fees, which, in turn, will lead to more debt that could take longer to pay off.
If the organization you were working with shuts down, you may be able to work a payment plan on your own directly with your creditors. But if you decide that you need additional credit advice and assistance, or if you are considering working with a credit counselor for the first time, asking questions like these can help you find the best counselor for you.
1.What services do you offer?
Look for an organization that offers a range of services, including budget counseling, savings and debt management classes, and counselors who are trained and certified in consumer credit, money and debt management, and budgeting. Counselors should discuss your entire financial situation with you, and help you develop a personalized plan to solve
your money problems now and avoid others in the future. An initial counseling session typically lasts an hour, with an offer of follow up sessions.
Avoid organizations that push a debt management plan as your only option before they spend a significant amount of time analyzing your financial situation. DMPs are not for everyone. You should sign up for a DMP only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money.
If you were on a DMP with an organization that closed down, ask any credit counselor that you are considering what they can do to help you retain the benefits of your DMP.
2.Are you licensed to offer your services in my state?
Many states require that an organization register or obtain a license before offering credit counseling, debt management plans, and similar services. Do not hire an organization that has not fulfilled the requirements for your state.
3.Do you offer free information?
Avoid organizations that charge for information about the nature of their services.
4.Will I have a formal written agreement or contract with you?
Don’t commit to participate in a DMP over the telephone. Get all verbal promises in writing.
Read all documents care-fully before you sign them. If you are told you need to act immediately, consider finding another organization.
5.What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained?
Try to use an organization whose counselors are trained by an outside organization that is not affiliated with creditors.
6.Have other consumers been satisfied with the service that they received?
Once you’ve identified credit counseling organizations that suit your needs, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. These organizations can tell you if consumers have filed complaints about them. The absence of complaints doesn’t guarantee legitimacy, but complaints from other consumers may alert you to problems.
7.What are your fees? Are there set-up and/or monthly fees?
Get a detailed price quote in writing, and specifically ask whether all the fees are covered in the quote. If you’re concerned that you cannot afford to pay your fees, ask if the organization waives or reduces fees when providing counseling to consumers in your circumstances. If an organization won’t help you because you can’t afford to pay, look elsewhere for help.
8.How are your employees paid? Are the employees or the organization paid more if I sign up for certain services, pay a fee, or make a contribution to your organization?
Employees who are counseling you to purchase certain services may receive a commission if you choose to sign up for those services. Many credit counseling organizations receive additional compensation from creditors if you enroll in a DMP. If the organization will not disclose what compensation it receives from creditors, or how employees are compensated, go elsewhere for help.
What do you do to keep personal information about your clients (for example, name, address, phone number, and financial information) confidential and secure?
Credit counseling organizations handle your most sensitive financial information. The organization should have safeguards in place to protect the privacy of this information and prevent misuse.
What happens to your DMP if the credit counseling company that managed your debts shuts down? A counseling agency that is going out of business may send you a notice telling you that your DMP is being transferred to another company. Or it may tell you that you need to take some action to keep your financial recovery on track. If a government agency has filed an action against your credit counseling company, you may get a notice from a third party.
If you discover that the organization handling your DMP is going out of business you need to:
- contact your bank to stop payment if you are making your DMP payments through automatic withdrawal.
- start paying your bills directly to your creditors.
- notify your creditors that the organization handling your DMP is going out of business. Consider working out a payment plan with your creditors yourself. Ask if they will give you a reduction on your interest rate without a DMP.
- order a copy of your credit report. Check for late payments — or missed DMP payments — that may result from the company going out of business. If you see “late” notations you don’t expect, call the creditor immediately and ask that the notation be removed. Understand that they have no obligation to do it.
If payments are late because the organization handling your DMP has failed to make scheduled payments, the consequences can be just as devastating as if you failed to make payments to the DMP. If you do not act quickly to make arrangements with your creditors, you could incur late charges that increase your debt, lose the lower interest rates associated with the DMP, and have “late” marks on your credit report.