Protect the Health of your Credit from Medical Collections

Did you know that your good credit score could drop by as much as 100 points, all because of medical collections that show up on your report? 
 
Whether an unpaid medical bill ends up on your credit report depends on if your doctor’s office or hospital reports a late payment or unpaid bill to the three major credit bureaus or turns it over to a collection agency.
 
The largest part of a credit score is payment history. It accounts for 35% of a credit score and shows if you’ve paid past credit accounts on time or missed payments. Not paying an account at all, such as a medical debt, counts as a negative mark on your credit history.
 
While the newest version of the FICO credit score, the FICO 9, and the VantageScore 3.0 weigh medical bills in collections less than other unpaid accounts, many lenders are not using these newer scoring models.  Therefore, a drop in your credit score can cause credit card companies and other lenders to deny your applications or can cause lenders to charge you higher interest rates.
 
Here are tips to protect your credit from medical debt:
 
1)  Call your insurance company and health care provider after receiving care to verify if you own a balance.  Don’t assume that everything will be handled by your insurance company.
 
2)  Request an itemized bill from your health care provider in order to verify the charges and possibly negotiate the payment terms.
 
3)  If a collection agency contacts you regarding a medical bill, ask if they will refrain from reporting the bill if you pay right away (assuming the debt is legitamet). If you don’t believe that you legitimately owe, then the Fair Debt Collection Practices Act gives you the right to dispute the debt with the collection agency and with the credit reporting agencies that the debt was reported to. 
 
If you have collections accounts I can save you up to 50% on the amount that was owed and stop all the harassing phone calls.  Call or email me today.

 

-Erik Kaplan

Coming Soon!

How a business credit card could impact your personal credit score

If used the right way, a business credit card can help improve both your business and your personal financial health – which ultimately can lead to more attractive opportunities to grow your business. 

Does a business credit card impact my personal credit score?  

As with personal credit cards, if you’re paying your bills on time you can expect to see nothing on your credit reports. However, if you or your employer are not paying credit cards (in your name) on time or missing payments expect to see negative marks posted on your credit report and watch as your personal credit score drops.  This is also true for your employees. Make sure you trust your employer/employees before signing for that credit card. 

How does personal credit affect business credit? 

Let me start off by saying there are significant differences between a business line of credit and getting a business loan. When talking about business loans, personal credit scores work the same way as with any other type of lending. Typically, anything less than a 660 and you will have a hard time finding an “A” bank lender with favorable terms.  A score of 720 or higher gives you a much better chance at approval with more favorable rates and terms. Using personal credit for a business loan or credit line is common if you run a small business or a start up. You can boost your personal credit score and your business credit score by making payments on time and keeping a low balance in relation to your available credit. Experian recommends keeping your balance at 20% to 30% of your credit limit. 

Do you need help with building up your business credit? 

One of the first things new businesses should do is start a business credit in the company’s name.  Like your personal credit, your business has its own business credit scores and reports.

We can help get your Dun and Bradstreet (D&B) business profile and a paydex score of 80! We also can help get you business credit cards and get negative items removed from your business credit. 
Give us a call or email me today!

THD Credit Consulting  ・ (800) 822-7120 ・kaperik@gmail.com

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How a Tax lien affects your credit

TaxLienWe all know that when you fail to pay your credit card bills or loans on time, your credit rating can suffer as a result. Did you know that not paying your income taxes can result in a tax lienand have the same affect on your credit score?

What is a tax lien

The federal government takes it very seriously if you fail to pay your taxes. And it can be serious for your credit reports and credit scores, too. A federal tax lien is the U.S. government’s legal claim against your property when you fail to pay a tax debt.

How does it affect your credit?

Once you fail or neglect to pay a tax liability on time, the IRS files a public document, a notice of federal tax lien, alerting creditors that the government has a legal right to your property – and it is one of the worst things that can appear on your credit report!

A tax lien, which may occur at the state, local or federal level, significantly impacts your credit score, affecting your ability to get loans, credit cards and even a cell phone.

How much or how little your credit score will be affected by a tax lien depends on a variety of factors, including other items listed on your credit report and your credit behavior. Even when a tax lien is paid and released, your credit scores will likely continue to be negatively impacted by the lien for many years as long as it’s on your credit files.

Is there any way to remove a lien from my credit file?

There are some instances in which you may be able to have a lien notice withdrawn from your credit file.  To discuss what steps you can take, give me a call (800) 822-7120 or email me at kaperik@gmail.com.

Looking for tax debt relief?

Guidance Tax Services is a tax relief advocate group that strives to protect you from the devastating effects of looming tax debt.  Give them a call at 800-381-8816 and ask for Rick Yeager and tell him I sent you! 

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THD Credit Consulting ・(800) 822-7120 ・kaperik@gmail.com

Do’s and Don’ts of Credit

Having a high credit score and good credit history can set you up for many perks. It shows potential lenders that you’re likely to repay loans in full and on time, which can help you lock in better rates on car loans, mortgages and other financial products. 

Here are a few do’s and don’ts for managing your credit. 

DON’T MISS PAYMENTS:

This is the biggest no-brainer, but it’s importance cannot possibly be stressed enough. Your payment history makes up 35 percent of your credit score.  Therefore, a single missed payment on a small credit card might not seem like to big of a deal, but that missed payment can sit on your credit report for at least seven years. Make more than one or two missed payments, and it will really start hurting your credit score. 

DON’T OPEN OR CLOSE A LOT OF TRADELINES:

Tradelines is a fancy word for credit accounts. If you open multiple accounts at once, it will ding your credit. If you close a lot of accounts at once, it too will ding your credit. Your credit score is calculated by your credit history and how long you’ve kept some of your credit open.

DON’T LOOK AT YOUR CREDIT OFTEN: 

Don’t let anyone look at your credit. By allowing creditors to “pull” your credit, you are potentially reducing your credit score. The assumption is that by letting creditors pull your credit, you are applying for more credit. If you’re curious about your credit and want to know it for yourself, you are allowed one free report each year.

DON’T CLOSE YOUR OLDEST CREDIT CARDS:

Part of the credit rating formula is longevity. Fifteen percent of your FICO score is the average age of all your trade line.

DO SET UP ALERTS:

Credit card websites allow you to set up alerts and notifications.  If you have difficulty keeping track of expenditures, you can set up email or text notifications to warn you when you’ve reached a certain limit and before payment is due. 

DO CALL LENDERS:

Ask lenders for your interest rates to be decreased. Having lower interest rates will help you to pay off your debt sooner, decreasing your credit utilization. 

DO CREATE A PLAN:

Work out a payment plan to pay down your debts and stick to it. Carrying a high balance on a credit card costs you lots of money in interest, and drags down your score. Always pay off debts with the highest interest rates first.

Every monetary decision you make can influence your credit rating. Remember, there are many things you can do in the day-to-day management of your finances that can improve your credit score. 

If you have questions about these Do’s and Don’ts give me a call or email me today.  

Until next month,

Erik Kaplan
THD Credit Consulting
(800) 822-7120

4 Things That Hurt Your Credit Score

4 Things That Hurt Your Credit Score

Your credit score is one of the most important factors of your financial life. While knowing your credit score is an important part of managing and maintaining your financial health, knowing just isn’t enough. It’s really important to know what are good financial habits and understand the actions that could hurt your score.

Here are 4 of them.

Maxing out your credit cards – While paying your bills on time positively influences your credit score – it’s not the only thing that matters. Even if you are never late on payments, carrying high balances on your credit cards on a regular basis will negatively affect your credit score.

Best practice is to keep your credit utilization ratios (the ratio of your credit card debt to credit limits) down by keeping your usage to about 10 to 20%.

Late or missing payments – Making a late payment on your credit card, mortgage or loans or medical bills can lead to negative consequences that could sink your credit score and damage your credit health. Whether you are just three days late or 30 days late, not paying your bills on time could affect you for months and potentially years to come.

The bottom line? One slip up and your credit score may take a dive, even if you have otherwise stellar credit.

Multiple Credit Report Inquiries –  When you are shopping for a new car and the dealership runs your credit multiple times, your credit score could take a hit. When you are shopping for loans, a lender will do a hard inquiry on your credit, meaning they pull your credit report to check your history and credit score to determine approval for your loan application. Hard inquiries show up on your credit report for two years. A lender may perceive a consumer who has had too many credit inquiries as desperate for credit or as a potential credit risk.

Be mindful of how many different lenders you apply for an auto loan with, because it can add up to a drop on your credit score.

Too many new opened accounts – Opening several new credit accounts in a short period of time represents a risk – especially for people who don’t have a long credit history.  Why?  It is believe that people who apply for credit multiple times within a short time period tend to over-extend themselves and are more likely to default at some point. Typically credit inquiries of this type have a small impact on one’s scores and while it isn’t the biggest factor, the appearance of “new credit” does influence your score.

When looking for a new credit card, spend time determining what the best credit card is by reading about the features of each card and then only apply for the one that has the features you want from a new card.

If you have any questions about your credit score, financial health or credit reports – give me a call or email me.

– Erik

THD Credit Consulting • (800) 822-7120

 

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