Repossessions of cars are surging in a way that’s hard to ignore.
More than 2.2 million vehicles have already been repossessed this year, a number expected to climb past 3 million by the end of 2025, in line with the Great Recession.
Do the numbers signal deeper trouble in the American economy?
“Right now we’re having this issue where there can be dangers for part of the economy,” said Tyler Schipper, an associate professor of economics at the University of St. Thomas. “These repossessions are highly likely to be concentrated among lower-income individuals.”
Among the factors squeezing borrowers with lower credit scores or limited credit history: high vehicle costs and loan rates.
In September, the average new car price reached over $50,000 for the first time. The average monthly payment hit $749 at a 6.8% interest rate and $529 for used cars at just over 11.54%.
“There’s a few different reasons we’re seeing this affordability erosion,” Schipper said. “One was that post-pandemic car prices went way up. Then later that triggers really high insurance rates, because if you’re going to insure a car that’s more expensive, that insurance is now more expensive. Now we’re kind of seeing a third wave of that which is inflation for car parts, and so if you’re trying to repair that vehicle and keep it on the road, those prices are up 11% to 12% this year as well.”
Shannon Martin, an insurance expert with Bankrate, says repossession can happen faster than many realize.
“The common timeline of repossession is between 60 and 120 days. But if you have a subprime loan or a buy-now-pay-here, it can be as soon as 30 days after your first missed payment,” Martin said.
If you’re at risk of repossession, Schipper says the best thing you can do is call your lender.
“They lose money if the car has to get repossessed because they have to pay the people that are repossessing the car,” he said. “That does leave some wiggle room in some cases then to figure out terms of payment with your lender.”
In previous downturns, spikes in car repossessions have coincided with job losses.
While unemployment remains relatively stable, that could change quickly if the economy weakens.
TransUnion, a major credit bureau in the U.S. that produces credit scores and reports, recently experienced a data breach impacting more than 4.4 million customers.
TransUnion reported the breach, which occurred on July 28, in a filing with Maine’s attorney general’s office on Thursday. The filing showed that customer data stored in “a third-party application” was compromised on that date. TransUnion discovered the breach two days later and reassured customers that the hackers did not access any credit information, including credit reports.
“Upon discovery, we quickly contained the issue, which did not involve our core credit database or include credit reports,” a TransUnion spokesperson told Bloomberg in an email.
TransUnion informed the 16,828 Maine residents who were impacted by the data breach through a written notice [PDF] earlier this week. It will give free credit monitoring services for up to two years to those affected.
In another filing, this time with Texas’s attorney general’s office, TransUnion disclosed that 377,357 Texas residents were affected by the breach, and that it had provided notice to those residents through U.S. Mail. The filing revealed that personal information like names, social security numbers, and dates of birth had been compromised through the incident.
The company did not answer detailed questions about the breach, including who the hackers were and if they demanded anything, in correspondence with Bloomberg.
TransUnion is one of the major credit reporting companies in the country, with a database of credit histories for more than 260 million Americans.
The breach is the latest to focus on companies with a large amount of consumer data. IT giant Cisco underwent a major data breach in late July, when a caller tricked a call center employee over the phone and stole data, including addresses and phone numbers, of Cisco customers.
Insurance company Allianz Life also experienced a breach last month, revealing the personal information of many of its 1.4 million customers. The incident led to a class-action lawsuit.
TransUnion, a major credit bureau in the U.S. that produces credit scores and reports, recently experienced a data breach impacting more than 4.4 million customers.
TransUnion reported the breach, which occurred on July 28, in a filing with Maine’s attorney general’s office on Thursday. The filing showed that customer data stored in “a third-party application” was compromised on that date. TransUnion discovered the breach two days later and reassured customers that the hackers did not access any credit information, including credit reports.
“Upon discovery, we quickly contained the issue, which did not involve our core credit database or include credit reports,” a TransUnion spokesperson told Bloomberg in an email.
New York has become the second U.S. state to protect their residents’ credit scores from being tarnished by unpaid medical bills.
New York Governor Kathy Hochul on Tuesday signed a bill barring credit reporting agencies such as Equifax, Experian and TransUnion from factoring in medical debt in consumers’ credit reports. Colorado also excludes medical debt from credit scores, except in certain circumstances.
“I’m signing a bill that bans hospitals, health care providers and ambulances from reporting medical debt to your credit agencies,” Hochul, a Democrat, said at the bill-signing ceremony in New York City. “People can focus on getting healthier and not focus on whether or not someone’s going to catch you and trap you and make you spiral even more, so that’s what we’re talking about.”
Bad credit makes it harder to secure a loan, buy a house or car, or be approved for a credit card. Individuals with low credit scores also typically pay more for home or auto insurance.
“Many New Yorkers are drowning in medical debt that can be difficult to pay off, especially for those who may be struggling with a serious health challenge,” Chuck Bell, advocacy program director for Consumer Reports, said in an email praising the bill. “This new law will ensure New Yorkers won’t see their credit ruined because of medical bills that bust their budgets.”
Nearly 25% of Americans say they have past-due medical or dental bills they cannot afford to pay, according to an investigation by KFF Health News with NPR.
“Medical debt forces millions of Americans to cut back on food and other essentials, drain retirement savings, and make other difficult sacrifices,” KFF said in its analysis.
While medical debt impacts even high-income earners as well as the insured, it has a disproportionate impact on communities of color and lower-income people, according to the KFF-NPR investigaton. Nationwide, 28% of Black and 22% of Hispanic Americans carry medical debt, compared with 17% of White people, U.S. Census Bureau data shows.
“Medical debt is such a vicious cycle. It truly hits low-income earners, but it forces them to stay low-income earners because they can never get out from under it,” Hochul said.
Hochul’s actions come amid efforts by the Biden administration to address the problem. In September, officials said they planned to develop federal rules in 2024 that, if adopted, would block credit reporting agencies from drawing on medical debt.
In lieu of federal protection, lawmakers in at least a dozen states have introduced legislation aimed at curtailing the financial harm caused by medical debt. Some of those bills would keep medical debt from tanking credit scores and create relief programs, while other proposals would protect personal property from collection for unpaid health care bills.
The credit reporting industry is also taking action as the issue draws increasing scrutiny from lawmakers. Equifax, Experian, and TransUnion agreed last year to drop most medical debt from credit reports. This year, the companies have stopped including medical debt of less than $500.
A blow for health care providers?
While consumer advocates say more needs to done, critics claim that removing smaller medical bills from a person’s credit report makes it harder for health care providers to collect payment.
“Historically, the risk that an unpaid medical bill under $500 could be reported on a consumer’s credit report incentivized the patient to pay the bill,” argued a California doctor in a class-action lawsuit he filed in August against the three credit bureaus.
“Medical providers now have a more costly path to collect payment on unpaid medical bills, if they can feasibly collect at all,” the complaint added.
Some Republican lawmakers fear New York’s new legislation could also have unintended consequences.
Republican Assemblymember Josh Jensen, who voted against the bill, said that while there is a need to ensure people aren’t financially haunted by emergency medical debt, the legislation is too expansive and shouldn’t apply to non-emergency care.
“There’s a concern that people could incur an amount of debt with no intention to pay it back, rather than the intended reasoning of the legislation to ensure people who need that critical care can get it without worrying the debt will follow them around forever,” he said.
New York’s law takes effect immediately. “No one should ever have to make a horrible choice between their physical health and their financial health,” Hochul said.
The regulations, if enacted, would potentially help tens of millions of people who have medical debt on their credit reports, eliminating information that can depress consumers’ scores and make it harder for many to get a job, rent an apartment, or secure a car loan.
New rules would also represent one of the most significant federal actions to tackle medical debt, a problem that burdens about 100 million people and forces legions to take on extra work, give up their homes, and ration food and other essentials, a KFF Health News-NPR investigation found.
“No one in this country should have to go into debt to get the quality health care they need,” said Vice President Kamala Harris, who announced the new moves along with Rohit Chopra, head of the Consumer Financial Protection Bureau, or CFPB. The agency will be charged with developing the new rules.
“These measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future,” Harris said.
Enacting new regulations can be a lengthy process. Administration officials said Thursday that the new rules would be developed next year.
Such an aggressive step to restrict credit reporting and debt collection by hospitals and other medical providers will also almost certainly stir industry opposition.
At the same time, the Consumer Financial Protection Bureau, which was formed in response to the 2008 financial crisis, is under fire from Republicans, and its future may be jeopardized by a case before the Supreme Court, whose conservative majority has been chipping away at federal regulatory powers.
But the move by the Biden administration drew strong praise from patients’ and consumer groups, many of whom have been pushing for years for the federal government to strengthen protections against medical debt.
“This is an important milestone in our collective efforts and will provide immediate relief to people that have unfairly had their credit impacted simply because they got sick,” said Emily Stewart, executive director of Community Catalyst, a Boston nonprofit that has helped lead national medical debt efforts.
Dana Downey of Pennsylvania speaks at a roundtable on Capitol Hill on Sept. 13, 2023, as health advocates and community members gathered to push the Biden administration to take additional action on medical debt.
Tasos Katopodis/Getty Images for Community Catalyst
Credit reporting, a threat designed to induce patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis has shown.
“Negative credit reporting is one of the biggest pain points for patients with medical debt,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center. “When we hear from consumers about medical debt, they often talk about the devastating consequences that bad credit from medical debts has had on their financial lives.”
Although a single black mark on a credit score may not have a huge effect for some people, the impact can be devastating for those with large unpaid medical bills. There is growing evidence, for example, that credit scores depressed by medical debt can threaten people’s access to housing and fuel homelessness in many communities.
At the same time, CFPB researchers have found that medical debt — unlike other kinds of debt — does not accurately predict a consumer’s creditworthiness, calling into question how useful it is on a credit report.
The three largest credit agencies — Equifax, Experian, and TransUnion — said they would stop including some medical debt on credit reports as of last year. The excluded debts included paid-off bills and those less than $500.
But the agencies’ voluntary actions left out millions of patients with bigger medical bills on their credit reports. And many consumer and patient advocates called for more action.
The National Consumer Law Center, Community Catalyst, and some 50 other groups in March sent letters to the CFPB and IRS urging stronger federal action to rein in hospital debt collection.
State leaders also have taken steps to expand consumer protections. In June, Colorado enacted a trailblazing bill that prohibits medical debt from being included on residents’ credit reports or factored into their credit scores.
Many groups have urged the federal government to bar tax-exempt hospitals from selling patient debt or denying medical care to people with past-due bills, practices that remain widespread across the U.S., KFF Health News found.
Hospital leaders and representatives of the debt collection industry have warned that such restrictions on the ability of medical providers to get their bills paid may have unintended consequences, such as prompting more hospitals and physicians to require upfront payment before delivering care.
Looser credit requirements could also make it easier for consumers who can’t handle more debt to get loans they might not be able to pay off, others have warned.
“It is unfortunate that the CFPB and the White House are not considering the host of consequences that will result if medical providers are singled out in their billing, compared to other professions or industries,” said Scott Purcell, chief executive of ACA International, the collection industry’s leading trade association.
About this project
“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.
The series draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country.
Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.
The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers’ balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability.
KFF Health News journalists worked with KFF public opinion researchers to design and analyze the “KFF Health Care Debt Survey.” The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.
Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
Opinions expressed by Entrepreneur contributors are their own.
Even if you’ve raised a lot of money for your startup and have plenty of cash in your bank account, to fulfill many of the day-to-day bureaucracy of operating your business, you’ll need a credit card.
These cards are separate from personal credit cards, and there are several reasons why you might prefer a business credit card over a personal credit card. Using a business credit card can help you keep your business expenses separate from your personal expenses. This makes it easier to track your business expenses for accounting and tax purposes, and can also help you avoid co-mingling funds, which can be a problem if you’re audited by the IRS.
Also, business credit cards often have higher credit limits than personal credit cards, which can be helpful if you need to make large purchases for your business. Lastly, many business credit cards allow you to issue employee cards and set spending limits on those cards. This can help you control your employees’ spending and ensure that they only use the card for business-related expenses.
Business credit cards are issued by banks and other financial institutions, and the terms and requirements for obtaining one will vary depending on the issuer. Different business credit cards have different benefits that you’ll want to consider before deciding which card is right for you.
Low or no annual fee
Although cards with hefty annual fees tend to provide more benefits, you still need to offset the annual fee with your card rewards.
Fortunately, there are some excellent business cards that have a low or no annual fee. You’ll need to assess whether it is worthwhile paying an annual fee for your new card.
Low fees
In addition to an annual fee, you may face transaction fees, interest charges, cash balance fees and other expenses. With the wrong card, any rewards you earn will quickly disappear to cover your fees.
You should be aware of all the potential fees before you sign up for your new business credit card. If the card offers good rewards, you may decide that it is worth paying more in fees, but you need to think about how the card will perform in the long term.
Bookkeeping tools
Many business cards provide account management tools, which can be a massive benefit when you want to remain organized at tax time.
If there are particular features that could simplify your business admin or that are compatible with your existing business software, this can be a great advantage for you.
Credit reporting
One of the priorities of your startup for the long term must be to build its credit history. As credit history is established, it will open new avenues of credit for your business.
So, you need to ensure that your new business credit card will report to the major credit bureaus.
Employee cards
As the owners of a startup, you’ll have plenty of things to take care of. This means that you won’t want the hassle of needing to handle every business purchase.
If your new card allows employee cards, you can empower your team to pay for items and eliminate the need to deal with expense reimbursements. This will also help you to keep better track of all your business spending.
Responsive support team
As a startup, you are likely to be anticipating fast growth and have unpredictable spending. Whether you need to increase your credit limit or require certain features, you will need to be confident that the support team will be on hand to help.
Travel features
If you need to travel for your business, you should look for a card that has travel features. From no foreign transaction fees to airport perks, there are some excellent card benefits around.
Bear in mind that if you plan on traveling internationally, you may want to choose a card that has broad merchant acceptance, such as Mastercard or Visa. If you’re not sure whether to choose cash back or a travel card, calculate expected monthly rewards to understand which is better, or just apply for two cards if it’s possible.
Solid dashboard
Finally, to effectively manage your credit card account, you need access to a clean dashboard and a smooth-running app. If you are dealing with time-sensitive issues such as payments, you’ll find it frustrating to try to deal with a clunky app or a dashboard that is not intuitive.
It is well worth checking online credit card reviews as well as the reviews for the credit card app to see if there are any red flag issues that could highlight potential problems.
What you’ll need to apply for a business credit card
As a startup, you may be unfamiliar with what you need when applying for a business credit card. So, here we’ll break down what you will need to have on hand to support your application.
While the requirements for different credit cards can vary from issuer to issuer, the commonly requested information includes:
Your tax ID number: If you don’t have a tax ID for your new business, and many entrepreneurs do not, you can usually use your personal Social Security number.
Your business name: If you have a legal name for your business, you can use it on your application. If you are a consultant, freelancer or other operation without a business name, you can use your own name.
Your legal entity: This is part of the application where you will need to identify how the business is organized. Most small businesses and startups in the U.S. don’t have a formal legal structure as they operate as sole proprietorships, where the individual owner essentially is the business. You can still apply for a business credit card as a sole proprietor, but if you are a partnership or have another type of legal business structure, use this on the application.
Business address details: If your business has a separate address, phone number and email address from your personal details, you will need to provide them. If you don’t have a separate business line or business location, you can use your personal details.
The business start date: This is fairly straightforward, but you need to be accurate and use the date that you formed your startup.
Business revenue: The revenue is the amount of money your startup brings in, which is different from your profit. As a startup, you may not have yet received any revenue, but you can put $0 on the application.
Type of industry: This is different from the business structure and the bank or credit card issuer needs to know what industry or niche you work in.
Interested parties: Finally, you need to provide details on any individuals who own 25% or more of your business. If your business does have co-owners or interested parties, you should have their names, addresses, Social Security Numbers and dates of birth as the issuer may request them.
As with a personal credit card, shopping around for the right product is well worth the time. So, before you make a decision about a credit card for your startup, be sure to check all the available options.
How to determine eligibility for a business credit card?
To determine eligibility for a business credit card, the following factors are typically considered:
Business and personal credit score: Your business credit score is one of the most important factors in determining your eligibility for a business credit card. A higher credit score will generally make it easier to qualify for a card. Although a personal credit score is not the most important factor in determining eligibility for a business credit card, it may be considered if your business does not have a credit history.
Business income: Your business income is also considered when determining your eligibility for a business credit card. Lenders will typically want to see that your business generates enough income to cover the credit card payments.
Business history: The length of time your business has been in operation, as well as its financial history, will also be considered when determining your eligibility. A business with a longer history and a positive financial track record will generally have an easier time qualifying for a business credit card.
Business type: Some credit cards are tailored to specific types of businesses and may require certain qualifications to be met.
It’s also important to note that different credit card issuers have different requirements and standards for approving business credit card applications, so it’s always best to check with the lender for more specific information.
Opinions expressed by Entrepreneur contributors are their own.
Bankruptcy can provide financial relief, but the downside is that it can negatively impact credit. While bankruptcy will remain on a credit report for as long as 10 years, the impact will lessen with time. Whether you filed Chapter 7 (which means you have the ability to pay back your debts) or Chapter 13 (you’re required to pay your creditors all of your disposable income), it is possible to start rebuilding credit with some simple measures.
Rebuilding credit after bankruptcy as an entrepreneur can be challenging, but it’s not impossible. The first step is understanding that rebuilding credit takes time and consistent effort.
How bankruptcy affects credit
Payment history is one of the most important factors when determining credit scores. When someone files for bankruptcy, the individual won’t be repaying covered debts in full as per the original credit agreement. This means that when filing for bankruptcy, it can have a severe negative impact on someone’s credit score.
A bankruptcy filing will appear on an individual’s credit report for up to 10 years, making it difficult to obtain credit or loans in the future. An entrepreneur may also have difficulty obtaining credit from suppliers or vendors, as they may be hesitant to extend credit to a business that has filed for bankruptcy.
Regardless of the bankruptcy type, lenders will see it on a credit report within the public records section, and it is likely to be a decision-making factor. After completing the legal process, it will show the bankruptcy and included debts that have been discharged.
However, it’s important to note that filing for bankruptcy can also provide a fresh start for an entrepreneur, allowing them to discharge debt and start anew.
When applying for credit, lenders may not approve certain types of credit — and even if approved, an individual may find that they’re offered higher interest rates or other unfavorable terms.
It can be difficult for an entrepreneur to get a credit card after filing for bankruptcy. Many lenders view individuals who have filed for bankruptcy as a higher risk. However, it is possible to get a credit card after bankruptcy, but it may take time and effort.
The best approach is to apply for a card that is specifically designed to help rebuild credit. An ideal card option is a secured credit card — approval is possible even with a fresh bankruptcy. Secured cards typically have a credit limit equal to the amount of security deposit that is provided.
However, some unsecured card issuers won’t pull a credit score or may extend a line of credit even if there are blemishes on someone’s credit history. Just be aware that these types of cards typically have extremely high rates and an abundance of fees. A secured card is likely the better option with lower costs.
The best ways to build credit after bankruptcy
As soon as a bankruptcy has been finalized, the individual can start working on building credit. Some of the best ways include the following:
Maintain payments on non-bankruptcy accounts
After filing, determine if any accounts have not been closed. While bankruptcy cancels most debt, there may be some remaining. Paying down these balances can lower the debt-to-income ratio — making timely payments remains crucial. Consistent payments will also help with staying on top of bills.
Keep credit balances as low as possible
Credit balances not only impact the credit utilization ratio but depending on how the need to file for bankruptcy was developed, people should look to avoid falling into the same habits. Reduce credit card usage and pay down balances — it will benefit your financial health.
Build emergency savings
Save some money each payday to build emergency savings. This will provide a fund for unexpected expenses, which will help to avoid incurring future debt that could impede rebuilding credit.
Get a secured card
As we touched on above, a secured credit card could help with rebuilding credit. While a security deposit is necessary, each time that a repayment is made on the card’s account, it will be reported to the credit bureaus. This will demonstrate responsible credit behavior.
Some secured card issuers allow cardholders to move on to an unsecured card after making consistent and on-time payments. This is a great benefit as there will be no need to apply for a new card as credit starts to improve.
Consider credit builder loans
A credit builder loan could be another way to help build credit. An individual will need to have a certain amount of money held in a secured savings account, but the individual can make monthly payments until the loan amount is repaid. Depending on the lender, it is also possible to have a secured loan that allows borrowing against savings.
As with a traditional loan, the payment activity for a credit builder loan will be reported to the major credit bureau, which will help to improve credit scores over time.
This will depend on an individual’s specific circumstances, but if someone is making consistent payments, and has a low credit utilization ratio and low debt-to-income ratio, they should start to see positive changes to their credit score after approximately six months.
However, be prepared to take a long-term approach. Remember that bankruptcy will be on a credit report for seven to 10 years. While the effects will diminish over time, responsible behavior will lead to improvements. Stay patient.
There is no need to wait for bankruptcy to disappear from a credit report to apply for a mortgage. However, if applying for a conventional mortgage, an individual will need to wait at least four years after bankruptcy has been discharged. If there are extraneous circumstances, it may be possible after two years.
Opinions expressed by Entrepreneur contributors are their own.
Starting a new LLC (Limited Liability Company) can be a great way to establish your business and build a strong financial foundation. One of the key elements to building a successful business is developing good business credit. A strong business credit score can help you secure financing, negotiate better terms with suppliers, and create a professional image for your company. Here are five ways to build business credit for your new LLC:
1. Get an Employer Identification Number (EIN)
The first step in building business credit is to get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number serves as a unique identifier for your business and is used to open bank accounts, apply for business loans and establish business credit.
An EIN is crucial in separating your personal and business finances, which is important for both tax purposes and building a strong business credit profile. The process of obtaining an EIN is straightforward and can be completed online or through the mail in a matter of minutes. It is important to note that having an EIN does not automatically establish business credit, but it is a crucial step in the process.
Once you have an EIN, the next step is to open a business bank account. This will help you separate your personal finances from your business finances, which is important for both tax purposes and building business credit. By keeping your business finances separate, it is easier to track your business’s cash flow and financial history, which will be important when it comes time to apply for credit.
Having a separate business bank account is crucial in separating your personal and business finances, and it helps you create a clear financial history for your business. By keeping track of your business’s cash flow and financial history, you’ll be able to provide lenders and credit bureaus with a clear picture of your business’s financial health, which will be important when applying for credit. Additionally, having a separate business bank account will make it easier for you to manage your business’s finances, track expenses and stay organized.
3. Register your business with business credit bureaus
To build your business credit, you will need to register your LLC with business credit bureaus. These bureaus, such as Experian, Dun & Bradstreet and Equifax, keep track of your business’s credit history and credit score. By registering your business, you are allowing the bureaus to collect information about your business, which they will use to calculate your business credit score.
Registering your LLC with business credit bureaus is a crucial step in building your business credit. The credit bureaus collect information about your business from various sources, including your business bank account, trade lines and payment history. They use this information to calculate your business credit score, which is a numerical representation of your business’s creditworthiness. A good business credit score can help you secure financing, negotiate better terms with suppliers and establish a professional image for your business. It is important to note that while registering with the credit bureaus is important, it does not guarantee that your business will have a good credit score. To build a strong business credit profile, it’s important to use credit responsibly and make timely payments.
Trade lines are a key factor in determining your business credit score. Trade lines refer to the relationships you have established with suppliers and creditors, such as loans and credit card accounts. By establishing trade lines with suppliers, you are demonstrating to creditors that your business is financially responsible and can be trusted to repay its debts. You can establish trade lines by paying bills on time and using business credit cards to purchase goods and services.
These relationships demonstrate to creditors and credit bureaus that your business is financially responsible and capable of repaying its debts. By establishing trade lines and making timely payments, you can build a strong business credit profile and increase your chances of securing financing in the future. Additionally, using business credit cards can help you establish trade lines and build credit, as long as you use them responsibly and make timely payments.
5. Use credit wisely
Finally, it is important to use credit wisely when building your business credit. This means paying bills on time, using credit cards responsibly and avoiding high levels of debt. By using credit wisely, you are demonstrating to creditors that your business is financially responsible and can be trusted to repay its debts. A strong business credit score will give you better access to financing, lower interest rates and better terms with suppliers, all of which will help you grow your business and achieve long-term success.
Using credit wisely is a critical factor in building and maintaining a strong business credit score. Late payments, high levels of debt and mismanaging credit can all have a negative impact on your business credit score, making it more difficult to secure financing and establish trade lines. On the other hand, paying bills on time, using credit cards responsibly, and keeping debt levels low demonstrate to creditors and credit bureaus that your business is financially responsible and trustworthy. A strong business credit score can open up many opportunities for your business, including better access to financing, lower interest rates and favorable terms with suppliers. So, it is important to use credit wisely and keep an eye on your business’s financial health and credit score to ensure continued success.
In conclusion, building business credit for your new LLC takes time and effort, but it is well worth it. By following these five steps, you can establish a strong financial foundation for your business and secure the financing you need to grow and succeed.
You survived the interviews. You deftly explained where you see yourself in five years. You managed to sparkle even when you talked about your greatest weakness.
Now there’s just one thing standing between you and your dream job: a credit check.
But what happens when you have a lackluster credit score? Will past missteps haunt your career prospects for years to come?
What Shows up on a Credit Check for Employment?
First the good news: Employers don’t see your credit score when they run your credit. Instead they see a modified version of your credit report.
Here’s what appears:
Open accounts with the account numbers redacted
Payment history
Outstanding balances
Amount of open credit
Accounts in collections
Bankruptcies from the past seven to 10 years, depending on the type of bankruptcy
Foreclosures from the past seven years
Now here’s the bad news: The things employers look for when they check your credit — primarily negative payment history or a high credit utilization ratio — are the top two factors that can crush your credit score.
So if you have a low credit score, your credit report will probably have information that could be a red flag to employers.
If a company does check your credit for hiring purposes, you don’t have to worry that your score will be affected. The pull is what’s known as a soft check, which has no impact on your score. A hard check, which occurs when you apply for credit, can ding your score by a few points.
Pro Tip
If your current employer wants to check your credit, they’ll need your written consent to do so.
When Do Employers Do Credit Checks?
For a lot of applicants, a credit check is unlikely to be an issue. A 2020 survey of more than 1,500 human resources professionals by the National Association of Professional Background Screeners (NAPBS) found that just 6% of companies ran credit checks on all employees.
Obviously, credit checks are most common for roles that involve handling money or sensitive information. If your personal finances are in trouble, employers may worry you’re more likely to embezzle money or commit fraud.
But some companies run credit checks simply because they think that if you can manage your own money well, it’s a sign that you’ll be a good employee — though a growing number of state and local governments oppose the practice. At least 11 states, Washington, D.C., plus Chicago, New York City and Philadelphia, limit the use of credit checks for candidates who don’t deal with finances or sensitive data.
Employers usually do credit checks at the end of the hiring process. Most do them after a conditional job offer has been made, though some conduct them following a job interview.
Under the Fair Credit Reporting Act, you have to consent in writing for an employer to pull your credit.
What to Do Before a Hiring Manager Runs Your Credit
If you’re a job candidate and you’ve been asked to consent to a credit check, you’ll want to know exactly what the employer will see on your reports.
The best way to do this is by obtaining a free credit report from all three bureaus at AnnualCreditReport.com. Ordinarily, you’re only entitled to one free report per year from each bureau, but due to the pandemic, you can receive a free report every week through December 2023. However, checking your reports this frequently probably isn’t necessary.
Pro Tip
Your credit reports are genuinely free on AnnualCreditReport.com. Unlike some sites, you don’t need to fork over your credit card info for a temporary trial to obtain them.
If you find any inaccurate information, it’s vital that you dispute it pronto with the bureaus — and let the hiring manager know that you’re disputing it as well.
But when the report contains negative information that’s correct, the proactive approach is best. If you’ve made mistakes in the past, ask to talk with the hiring manager before they run your credit.
If your credit troubles are the result of hardship, like a death in the family, a layoff or a divorce, you may want to explain the circumstances to the hiring manager, though be careful about offering TMI.
You’ll be in a better position to make your case if you can explain how you’re working to fix things and why your previous mishaps won’t affect your job performance.
If the employer opts not to hire you because of what they found in your credit reports, they’re required under the Fair Credit Report to notify you. They’ll also need to give you a copy of the credit report they used to make the decision, a summary of your rights and ample time to dispute the decision.
While this process may seem stomach-churning, it helps to understand the employer’s reason for checking your credit: It’s usually about risk mitigation. They want to make sure they’re not hiring someone who’s likely to steal from the company or its customers, rather than judge you for missing a credit card payment.
Why You Need to Check Your Credit Reports, Not Just Your Score
Regardless of whether you’re on the job market, you need to regularly monitor your credit reports. And no, signing up for a credit score monitoring service isn’t enough.
While these services can be helpful, only the reports furnished by the official bureaus will show you what’s really causing any credit troubles.
Think of the credit score as your temperature. If you develop a fever, it could be a sign of an underlying problem. Obtaining your credit report is like getting lab work. It’s the only way to get to the root of the problem.
Trust us: Even if you’re not job hunting or applying for credit soon, it will pay off to address these problems now. Finding a job is stressful enough. Don’t add unnecessary pressure down the line by neglecting to keep up with your credit report.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected].
If you want to whip your finances into shape, here’s a good goal: improving your credit score.
A lot of goal-setting efforts fail because they’re so extreme. Think of all the bonkers weight-loss and money-saving goals that never go anywhere.
This is different. No extreme measures are required. But there aren’t any shortcuts. Building good credit is a goal you need to commit to long term.
How to Build Good Credit in 10 Steps
Ready to finally prove your creditworthiness? Here’s how to build good credit in 10 steps.
1. Stay on Top of Your Credit Reports
About 1 in 5 credit reports contain inaccurate information. Make sure you access your reports for free at AnnualCreditReport.com, rather than one of the many websites that make you put down your credit card number to sign up for a trial. File a dispute with the bureaus if you find anything you think is inaccurate or any accounts you don’t recognize.
Your credit reports won’t show you your credit score, but you can use a free credit-monitoring service to check your score. (No, checking your own credit doesn’t hurt your score.) Many banks and credit card companies also give you your credit scores for free.
Pro Tip
If the bureaus agree to remove information from your credit reports, expect to wait about 30 days until your reports are updated.
2. Pay Your Bills. On Time. Every Single Month
Yeah, you knew we were going to say this: Paying your bills on time is the No. 1 thing you can do to build good credit. Your payment history determines 35% of your score, more than any other credit factor.
Set whatever bills you can to autopay for at least the minimums to avoid missing payments. You can always pay extra if you can afford it.
A strong payment history takes time to build. If you’ve made late payments, they’ll stay on your credit reports for seven years. The good news is they do the most damage to your score in the first two years. After that, the impact starts to fade.
3. Establish Credit, Even if You’ve Made Mistakes
You typically need a credit card or loan to build a credit history. (Sorry, but all those on-time rent and utility payments are rarely reported to the credit bureaus, so they won’t help your score.)
But if you have bad credit or you’re a credit newbie, getting approved for a credit card or loan is tough. Look for cards that are specifically marketed to help people start or rebuild credit. Store credit cards, which only let you make purchases at a specific retailer, can also be a good option.
4. Open a Secured Card if You Don’t Qualify for a Regular Card
Opening a secured credit card is one of our favorite ways to build a positive history when you can’t get approved for a regular credit card or loan. You put down a refundable deposit, and that becomes your line of credit.
After about a year of making your payments on time, you’ll typically qualify for an unsecured line of credit. Just make sure the card issuer you choose reports your payments to the credit bureaus. Look for a card with an annual fee of no more than $35. Some secured card options we like (and no, we’re not getting paid to say this):
Discover It Secured
OpenSky Secured Visa Card
Platinum Secured from Capital One
5. Ask for a Limit Increase. Pretend You Never Got It
Increasing your credit limits helps your score because it decreases your credit utilization ratio. That’s credit score speak for the percentage of credit you’re using. The standard recommendation is to keep this number below 30%, but really, the closer to zero the better.
If you have open credit, ask your current creditors for an increase, rather than applying for new credit. That way, you’ll avoid lowering your length of credit, which could ding your score.
The downside of a higher credit limit: You’ll have more money to spend that isn’t really yours. To get the biggest credit score boost from a limit increase and avoid paying more in interest, make sure you don’t add to your balance.
Pro Tip
Don’t believe the myth that carrying a small credit card balance helps your credit score. Paying off your balance in full each month is best for your score, plus it saves you money on interest.
6. Prioritize Credit Card Debt Over Loans
Tackling credit card debt helps your credit score a lot more than paying down other debts, like a student loan or mortgage. The reason? Your credit utilization ratio is determined exclusively by your lines of credit.
Bonus: Paying off credit card debt first will typically save you money, because credit cards tend to have higher interest rates than other types of debt.
7. Keep Your Old Accounts Active
Provided you aren’t paying ridiculous fees, keep your credit card accounts open once you’ve paid off the balance. Credit scoring methods reward you for having a long credit history.
Make a purchase at least once every three months on the account, as credit card companies often close inactive accounts. Then pay it off in full.
8. Apply for New Credit Selectively
When you apply for credit, it results in a hard inquiry, which usually drops your score by a few points. So avoid applying frequently for new credit cards, as this can signal financial distress.
But if you’re in the market for a mortgage or loan, don’t worry about multiple inquiries. As long as you limit your shopping to a 45-day window, credit bureaus will treat it as a single inquiry, so the impact on your score will be minimal.
9. Still Overwhelmed? A Debt Consolidation Loan Could Help
If you’re struggling with credit card debt, consolidating your credit card debt with a debt consolidation loan could be a good option. In a nutshell, you take out a loan to wipe out your credit card balances.
You’ll get the simplicity of a single payment, plus you’ll typically pay less interest since loan interest rates tend to be lower. (If you can’t get a loan that lowers your interest rate, this probably isn’t a good option.)
By using a loan to pay off your credit cards, you’ll also free up credit and lower your credit utilization ratio.
Many debt consolidation loans require a credit score of about 620. If your score falls below this threshold, work on improving your score for a few months before you apply for one.
10. Keep Your Credit Score in Perspective
All the credit-monitoring tools out there make it easy to obsess about your credit score. While it’s important to build good credit, look at the bigger picture. A few final thoughts:
Lenders look at more than your credit score. Having a low debt-to-income ratio, decent down payment and steady paycheck all increase your odds of approval when you’re making a big purchase, even if your credit score is lackluster.
Don’t focus on your score if you can’t pay for necessities. If you’re struggling and you have to choose between paying your credit card vs. paying your rent, keeping food on the table or getting medical care, paying your credit card is always the lower priority. Of course, talk to your creditors if you can’t afford to pay them, as they may have options.
Focus on your overall financial picture, and you’ll probably see your credit score improve, too. Remember, though, that while credit scores matter, you matter more.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.
Debt consolidation is usually billed as a smart financial move, because it can boost your credit score and save you money.
But a few mistakes could actually hurt your credit or cost you more money in the long run. Here’s what to keep in mind when deciding whether to consolidate your debt and how to choose the best way to do it.
How Does Debt Consolidation Work?
Debt consolidation usually means taking out a loan to pay off existing debts, most commonly credit card debt.
These are technically personal loans that lenders often market as “debt consolidation loans,” which isn’t inaccurate. It’s just their way of letting you know how they can help you.
You’ll take out the loan, receive the funds and use them to pay off your credit card balances. Then you’ll repay the loan over time like any other loan.
You could also consolidate with a balance-transfer credit card or other kind of loan, such as a retirement account loan or home equity loan. However, personal loans typically have the advantage of lower interest rates and no collateral requirement.
People with a lot of high-interest debt tend to look to consolidation because it simplifies repayment, and could reduce the cost of the debt through lower monthly payments, a lower interest rate or both.
Pros and Cons of Debt Consolidation Loans
While debt consolidation usually helps your credit score, there are some pros and cons to consider before you consolidate credit card debt or other high-interest loans.
Pros
Fewer monthly payments
Lower interest rate
Lower monthly payment
Boosts credit score
Cons
Costs more over time
Could hurt your credit score
One larger monthly payment
Potential fee upfront or over time
4 Alternatives to Debt Consolidation
You might come across companies offering one of several ways to fix your debt. They’ll each have a different effect on your credit score and apply to different situations:
1. Debt Refinancing
Refinancing works like consolidation, but the term usually refers to paying off a single debt. You pay off one loan balance with a new loan that gives you a better interest rate and repayment terms. Refinance your debt if your credit and finances have improved since you first borrowed.
2. Debt relief
Debt relief is an umbrella term that includes consolidation and refinancing, and it often includes some amount of debt forgiveness. The term is often used by companies that facilitate debt consolidation or a “debt management plan” — you’re generally better off doing a little research and managing the debt on your own.
3. Debt Settlement
Settlement is when you agree with a creditor on a reduced repayment amount that it’ll consider payment in full. This will show up on your credit report and could have a negative impact for several years, but will help you pay off the debt faster.
4. Debt Restructuring
Restructuring is more common for companies than individuals and usually happens in dire situations. The effect is similar to refinancing, but it involves reorganizing the existing debt rather than replacing it with a new one.
Do You Need Good Credit to Consolidate Debt?
You don’t necessarily need a high credit score to take out a loan for debt consolidation, but better credit gives you a better chance at a low interest rate and favorable terms.
Watch out for predatory lenders if you have a low credit score. Some unscrupulous companies are willing to give you a loan you can’t afford with a super high interest rate. A loan you can’t afford to repay could put you in a worse situation than you are with credit card debt.
How Could Debt Consolidation Help Your Credit Score?
Consolidating debt could help your credit score in two major ways:
Lower your credit utilization: The amount of available credit you use weighs heavily into your score. A bunch of maxed-out credit cards looks bad. Consolidation pays off those balances and reduces your utilization.
A positive line on your credit report: The loan is a way to demonstrate your creditworthiness as long as you stay current on payments.
Consolidation itself doesn’t leave a negative mark on your credit report, like debt settlement does. But the loan (or credit card) shows up as a new credit line, which could temporarily lower your score.
How Could Debt Consolidation Hurt Your Credit Score?
A few common debt consolidation mistakes could hurt your credit score or cost you money. Here are a few tips to make the right decision about whether a debt consolidation loan could hurt your credit score and how to save money in your situation.
Age of credit history: Creditors want to see you’ve been around the block with credit. When you close old cards, your average credit history gets shorter.
Credit mix: This is the variety of types of debt you have — installment loan vs. credit card vs. mortgage, for example. It has a small but significant effect on your credit score.
Utilization: More cards open means more available credit. Cut up your cards to avoid growing that balance again, and that unused credit will keep your utilization ratio low.
Keep Up With Payments
Your credit card consolidation loan or balance-transfer credit card is still debt with monthly payments you have to keep up with.
Budget before you take out the loan so you know you can afford the monthly payment. Staying on top of the payments should help your credit score over time — but getting behind will hurt.
If you opt for a balance transfer card — which usually comes with an introductory 0% APR for about a year — plan to pay the debt off during the introductory period. Any longer, and you’ll have to pay interest and probably face a high interest rate and annual fees.
Compare Consolidation Options
Shop for the best debt consolidation loans before committing.
Consider what kind of consolidation — personal loan, balance transfer card or secured loan — works best for you based on your budget, existing debt and creditworthiness.
Online loan marketplaces can help you quickly see and compare personal loan offers from lenders side by side.
To evaluate a debt consolidation loan, consider:
Interest rate: Aim for an interest rate that’s lower than the combined rate on your existing debt. A loan with a higher rate could still give you the relief of a lower monthly payment and fewer creditors, but it will cost you more money.
Monthly payment: Reorganizing your debt to land a smaller monthly payment could outweigh the long-term savings you’d get with a shorter repayment term or lower interest. A smaller bill could make the difference between paying on time or not, which has a major impact on your credit score.
Fees: Read the fine print to understand the total cost of consolidation. A personal loan might come with an origination fee, and a balance transfer card might charge an annual fee after the first year.
Repayment term: The longer you have to repay the debt, the smaller your monthly payment will likely be — and the more time the balance will have to accrue compounding interest, which will cost you more money over time.
Refinance Again in the Future
Maybe your best option now is to take out a loan at a high interest rate and a long repayment term. If that gets you on track with debt payments, it could be what you need to boost your credit score.
Just don’t stick yourself with those bad terms for the long haul.
As your score rises and you get a handle on your monthly budget, consider refinancing the loan to get better terms in the future.
What Do You Need to Qualify for Debt Consolidation?
Qualifying for a debt consolidation loan has many of the same requirements as qualifying for any loan. You’ll need to be at least 18 years old, provide proof of citizenship and submit documentation of your current income and the ability to make monthly debt payments at the current interest rates. You’ll also have to meet the lender’s minimum credit score requirement, which is usually in the 600 range for this type of loan.
Is Debt Consolidation a Good Reason to Get a Personal Loan?
Many lenders specifically offer debt consolidation loans, but you don’t have to consolidate that way. Instead of working with debt consolidation loan companies, you can choose to consolidate debts through personal loan lenders with lower interest rates. This can be a smart financial move if you have several high interest credit card bills or multiple debts, but your credit score needs to be 650 or above to qualify for unsecured personal loans with most lenders.
How Long Will it Take for Debt Consolidation to Improve My Credit Score?
The length of time it takes for debt consolidation to affect your credit score depends on how you consolidated the debt. In the instance of a straightforward debt consolidation loan, you should see it improve your credit score within 6 to 24 months. If you’re trying to qualify for another loan like a home equity loan, you’ll want to start the consolidation process up to a year ahead of applying.
Kaz Weida is a senior writer for The Penny Hoarder. Dana Miranda contributed.
You probably know that paying down debt is good for your credit score. But there’s a persistent myth about credit card balances and credit scores. Some people say that carrying a small balance from month to month somehow helps your credit score.
The idea that carrying a balance helps your credit score is totally false. Read on to learn the facts about how your balance affects your credit score.
How Your Credit Card Balance Affects Your Credit Score
There are five things that determine your credit score. These credit score factors break down as follows:
Payment history (35%)
Credit utilization (30%)
Average age of credit (15%)
Credit mix (10%)
Hard inquiries and new credit (10%)
As you can see, your credit utilization, or the percentage of open credit that you’re using, accounts for 30% of your credit score. The rule of thumb is that you don’t want your credit utilization ratio to climb higher than 30%. If you can get it to 0%, that’s ideal.
Here’s where it gets a bit tricky. If you’re regularly using credit, a balance will probably show up on your credit report. That’s because you don’t control when your credit card company reports activity to the bureaus.
For example, suppose you have a $5,000 limit and a zero balance. Then you make a $100 purchase. If your creditor then reports to the bureau, you’ll have a 2% credit utilization ratio ($100/$5,000 = 2%), even if the bill hasn’t come due yet.
Having a credit utilization ratio above 0% isn’t necessarily something to worry about, though. According to Experian, consumers with a perfect 850 FICO score have an average credit utilization of 5.8%.
That doesn’t mean the average person with a perfect score is carrying a 5.8% balance from month to month. When your creditor reports to the bureaus, they’re simply providing a snapshot of your account at that given moment. Even if you pay off your balance in full each month, it’s likely that your account will show that you’re using up part of your open credit.
If your credit utilization ratio is 0% because you never use your credit cards, your score could suffer. When you’re not making regular credit purchases and you don’t have outstanding loans, you aren’t generating activity that’s reported to the credit bureaus. That’s harmful because payment history is even more important than your credit utilization.
Moreover, your credit card company could cancel your card due to inactivity. That hurts your score in two ways: Your credit utilization could increase because the amount of open credit you have will drop. If the card was also one of your older accounts, it will also lower your average length of credit.
Should You Carry a Credit Card Balance?
There’s no benefit to your credit score when you don’t pay off your balance in full. You’ll also pay unnecessary interest, unless you’re taking advantage of a temporary interest-free window.
That said, you shouldn’t worry about a balance showing up on your credit report. As long as your balances — both overall and on each individual card — stay below 30%, you’ll be able to build good credit.
Make every payment on time. The No. 1 habit of people with exceptional credit scores is that they never miss payments. One late payment will stay on your credit report for seven years.
Always keep your utilization below 10%. Most members of the 800 club pay off their balances in full each month, but many say they never let their balances climb above 10%.
Keep your oldest card open. As you build good credit, you typically qualify for better credit card rewards. But people with top-notch credit keep those old cards open and use them for a small monthly purchase. Credit scoring models favor customers who have long-term relationships with their cards.
Finally, don’t worry too much about small fluctuations in your credit score. Your score can vary from month to month based on the balance you have at the time your creditor reports to the bureaus. Fluctuations are completely normal. Focus on making on-time payments and keeping your balances low, and you’ll build a healthy credit score.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]or chat with her in The Penny Hoarder Community.
Debt can feel stressful and overwhelming, especially when you’re struggling with payments. And if you end up on the receiving end of a debt collector’s call, it can feel scary.
But while it’s tempting to ignore debt collectors, that can even make the situation worse.
You know what else is not a good idea? Uttering a specific 11-word phrase billed to stop debt collectors.
What Is This Phrase to Stop Debt Collectors?
It’s “Please cease and desist all calls and contact with me immediately.”
The truth is that using this phrase won’t necessarily stop debt collectors. They may stop contacting you, but it doesn’t mean they won’t stop from trying to collect the debt you may owe. Besides, if you cease all communications, you’ll risk missing important information about the debt, putting you at further risk. Also, the debt could end up being reported to the credit bureaus and you could end up being sued so the debt collectors can receive what’s owed.
The good news is that there are better ways to respond when you’re contacted by a debt collector that’ll hopefully get you on the right track financially.
What You Can Do Instead
It’s important that you don’t give the debt collector any personal information or confirm that you owe money on the debt because this can be used against you.
As soon as a debt collector contacts you, it’s important to find out exactly what the debt is for and when you started owing money.
More specifically, you’ll want to find out who the debt collector is, including their name, phone number and address. You can look them up to get intel on the company and decide whether it looks legitimate.
Then, look at the amount that the debt collector claims you owe to see whether you recognize the amount. The debt collector should be able to tell you exactly what the debt was for, including the name of the original creditor, and when you incurred the debt. For example, the debt collector could tell you that the debt was for an unpaid doctor’s bill on January 15, 2022 for $600, plus $60 in interest.
When debt collectors contact you first in writing, they are legally required to provide you with a notice or letter with certain information, such as the amount owed, the debt collector’s information, and the date you incurred the original debt.
However, if the debt collection agency calls you first, before going any further, ask them to contact you in writing first. This is for two reasons. One, so you have the exact information on hand so you can figure out the next steps.
And two, you want to make sure that you can confirm the debt and the debt collector are indeed legitimate. Whatever initially happens, don’t offer any financial or personal information over the phone unless you’ve already confirmed the debt and debt collector is legitimate.
Once you’ve determined more details about the debt and the debt collector, you can then decide the next steps.
Different Ways to Respond to a Debt Collector
If you want some relief from debt collectors, you can limit the ways in which they contact you.
According to the Consumer Financial Protection Bureau, debt collectors are legally not allowed by federal law to contact you at a place and time they know is inconvenient for you. For instance, debt collectors aren’t allowed to contact you at your workplace if your employer doesn’t want them to.
By limiting how debt collectors contact you, you can still remain in contact, but more so on your terms. For instance, if you hate phone calls, you can request the debt collector to contact you in writing instead.
Or, if you rather the debt collector not calling you at all, you can send a letter requesting that all communication be done through your lawyer if you’ve hired one to handle the debt.
What if you find out that the debt isn’t yours, or that you’ve already paid off the debt? You can respond by disputing it in writing. There are several options to respond in this scenario, such as requesting proof that you owe the debt, or going further and requesting that they don’t contact you unless they have proof.
Again, if you request that they cease contact with you, you may still be deemed responsible for the debt.
How to Make a Request to a Debt Collector
Generally, the best way to make any request to a debt collector is to do so in writing. That way, you have a clear record of your communication with the debt collector.
When crafting the letter, be sure to include important details such as your name, up to date contact details, the debt in question, and what your request is. When sending it, keep a copy for your records and it may be worth the expense to send it as certified mail. That, or another way that you can be certain or receive a notice when the recipient has gotten it.
We know dealing with debt collectors isn’t fun, but it’s necessary you’re not going to face further financial consequences.
Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts.
TEMECULA, Calif., June 7, 2022 (Newswire.com)
– IDIQ, an industry leader in identity theft protection and credit report monitoring, today announces its acquisition of Credit Swag Ventures, Inc., which does business as Credit & Debt and operates the website https://creditanddebt.org.
The Credit & Debt acquisition allows IDIQ to further extend its financial wellness toolset and financial educational content for members as well as gain a dedicated and seasoned team to focus on third-party opportunities for its members across the financial services landscape. Credit & Debt is a fintech and financial education company that provides guidance for those looking to manage debt, monitor credit, find loans or credit cards and more. They also offer Money Sensei™ – an interactive financial management platform that intelligently analyzes spending habits, helps manage budgets and encourages paying off debts faster – along with educational content and connectivity to best-in-class financial services providers.
“We are excited to announce our second acquisition for 2022. This acquisition, like others, furthers our goal of financial inclusion and provides customers with the tools they need throughout their financial journey,” said Surya Pochareddy, IDIQ executive vice president and head of mergers and acquisitions. “We have an innovative roadmap to further combine the Credit & Debt integrated personal banking data, Money Sensei, and financial partner relationships with our features and customer base.”
Scott Hermann, IDIQ CEO, agreed, saying, “We are thrilled to add Credit & Debt to our suite of member services. This acquisition means Credit & Debt now has additional resources to move forward with an ambitious growth strategy that will benefit consumers looking to positively impact their financial profile.”
With the acquisition, IDIQ also gains the expertise of industry veteran Jeff Mandel, CEO of Credit & Debt. Mandel will continue to lead Credit & Debt and head third-party opportunity efforts as president of IDIQ Monetization. Mandel has more than 30 years in the banking, homeownership services and credit industries and co-founded Credit & Debt in 2019.
“I’m excited Credit & Debt has become a part of IDIQ,” Mandel said. “IDIQ and Credit & Debt have similar missions to empower members to make personal financial decisions that help them reach their financial goals. This acquisition enables us to reach materially more consumers to bring them these essential tools, especially at a time when so many people across the United States need help.”
IDIQ is one of the fastest-growing companies in America, earning two consecutive spots on the prestigious Inc. 5000 List that has also featured Microsoft, Patagonia, Intuit and Under Armour as previous list honorees. In the past year, the company has had significant growth of its active customers on the platform, which has led to record revenue. Additionally, over the last year, the company has hired more than 125 employees to meet increased consumer demand for credit report and identity theft monitoring.
The company also recently announced its acquisition of Resident-Link™, a service for the rental community to allow consumers access to help build and establish their credit through positive rental-payment reporting to major credit bureaus.
About IDIQ: IDIQ® is recognized as one of the fastest-growing industry leaders in identity theft and credit report monitoring. Featuring the IdentityIQ®, MyScoreIQ® and Resident-Link™ brands, the company delivers identity theft protection, credit report information, education and financial inclusion that benefits consumers and businesses. The company features 100% U.S.-based customer service and support. For more information, visit www.IDIQ.com.
