Today, it’s difficult for businesses to attain credit lines from their banks. As a result, good credit management and customer cash may be the best options to finance a business’s daily operation, provide working capital and generate profits. What is integrated credit management all about? Integrated credit management is the process of:
- Analyzing, managing and maximizing the financial risks of operating a business. A business is only profitable when invoices are paid by customers.
- Maximizing client value by concentrating on the commercial value of the client for a business in terms of profitability and revenue.
- Implementing financial relations management in alignment with customer relations management and business goals. Good relationships with clients yield a positive effect on payment and client loyalty.
- Setting up systems, procedures and people in a business via cooperation and communication throughout the whole supply and financial chain. It’s an integrated approach.
- Utilizing integrated automated solutions in order to disclose information in an efficient and centralized manner. All of a business’s departments can be kept in the loop.
Knowing Your Customers
With an integrated credit management approach, there is always a major focus on knowing your customers, the market and your competitors. What is the relative position of your company in the market? What do customers buy from you? How important are your products to your customers? An integrated credit management approach will help answer these questions and actually define the existence of your business. Without the answers to these questions, it is almost impossible to improve the performance levels of credit management for a business.
Today, automation plays a key role in integrated credit management. However, it’s important that you have a clear idea of how your business runs, so you can define policies and procedures that can be translated to software. The software itself will not ensure success; what your business does with it will. With an integrated approach, customer relations management, query management and credit management are all integrated into one automated system.
If you’re in business and struggling with credit management and would like to know more about these software systems, you can get advice from a non-profit credit counseling agency. A non-profit credit counseling agency has certified financial advisors who are qualified and knowledgeable about business operations and business software. Once you’re assigned an individual advisor, they will carefully review your facility’s operations and assist you with implementing strategies for increased profits, including integrated credit management software.
If you’re thinking of applying for a mortgage, car loan or other loan, getting the lowest interest rate possible is critical; in fact, even a slightly lower rate can mean tens of thousands of dollars in savings over the life of a mortgage. To get the best rates, you need to understand how lenders evaluate you during the lending process. Here are the top three factors lenders use when evaluating your creditworthiness:
Amount of Credit in Use
Potential lenders will look both at the total amount of credit lines on your account and the percentage that’s being used. In general, you want to keep the amount of credit you’re carrying as low as possible – ideally no more than 20 percent of each card’s total limit. That means that for a card with a $1,000 credit limit, you would ideally want the amount you’re carrying to be at or below $200. In addition to having a healthier credit score, carrying a low monthly balance also means you’ll be paying lots less in interest and reduces the risk of over-limit fees and penalties. If you’re carrying a lot of debt, look into a debt consolidation service to have interest rates reduced so your monthly payments go further.
Your payment history is the number one factor most lenders look at first when determining whether or not they’re willing to offer you a loan and when determining the interest rate or terms they’re willing to offer. Payment history also has a huge impact on your credit score: Even a single late payment can cause your score to drop considerably. The good news is that as you begin to establish a good payment history by making all your payments on time every month, your payment history will improve and your score will increase. Enrolling in a credit counseling and debt management program like CreditGuard can help you establish a regular repayment history utilizing monthly payments that you can afford. Credit counseling services make repayment easier by combining payments from all your different unsecured accounts into one sum that you pay only once each month. Combining many payments into one is a big step toward ensuring you pay your bills each month, which in turn goes a long way toward improving your credit history and score.
Length of Credit History
Creditors also look at how long you’ve had loans so they can get a better determination of how you’ll handle credit over the long term. The only way to improve this factor is to keep your credit lines open as long as you can; that means avoiding having lots of late payments or other negative behaviors that can result in credit cards being cancelled by the lender. Many borrowers mistakenly believe that cancelling cards is a path to better credit, but in fact, if you cancel the older cards in your history, you can cause your score to drop substantially. Learning to maintain open lines for a long time depends largely on consistently applying smart financial and credit management habits. Credit counselors can provide the guidance you need to ensure you understand the best financial moves to make to preserve a good credit score.
Keeping an eye on your credit and financial habits is a crucial component in getting the best loan rates. Enrolling in a debt consolidation and credit management service can help ensure you develop the best credit history and score possible.
Digging yourself into a deep hole financially with credit card debt is devastating. It feels as though you are facing an impossible mountain to climb. Often times, you probably feeling like throwing in the towel and just giving up. However, the persistent calls from debt collectors and watching your credit score gradually decline gives you the motivation to find help. You finally decide to dig yourself out of this hole and rebuild your financial strength. It is a great decision, and many resources are available to begin filling the hole.
Debt Consolidation and Filling your Financial Hole
One of the best ways to take action immediately is working with a debt consolidator. The company negotiates with credit card companies where the goal is obtaining a far lower rate and payment. Once the terms of the negotiation are approved, all of your debt is consolidated into one easy monthly payment. Not a loan, but all your debt merged into one payment. Your payments are lower, your credit score improves, and bill collectors stop calling. This is the first step in filling the hole.
Keeping Credit Card Debt under Control
Consolidation of all your credit card debt is not the only step. Once the terms of the consolidation are agreed upon, and you start making your monthly payment, the process does not end there. You must seek out financial counseling to continue filling that deep hole. Once you find stability in your financial situation, you start thinking about a new credit card and how one card will not hurt. Stop there immediately, think about what you are doing and how that decision nearly ruined you the first time. Use the financial counseling resource from the consolidators who fixed the first part of your financial situation. Otherwise, you may find yourself right back at square one.
Debt Free for Life
Unfortunately, throughout the course of your life, certain debts remain. It is certainly not the kind of debt that dug that financial hole. Taxes, insurance, food, shelter are the kind of debt you will always face. To keep yourself in a positive frame of mind, think of this type of debt as manageable debt.
Although the economy has improved over the past year or so, many people are still dealing with the effects of long-term unemployment and reductions in pay, namely credit card debt and other bills that are difficult to manage. It might be tempting to consider taking out a debt consolidation loan in order to pay off the outstanding bills and make only one payment per month. However, that is just trading one set of debts for another and not doing anything to help you reduce your debt balance. A better option to consider is consumer credit counseling.
Working with your creditors, a credit counselor will reduce both interest rates and monthly payments, as well as get certain late fees and other charges waived. They then set up a monthly payment schedule with your creditors. You make one payment each month to the credit counselor, who disburses that money to your creditors according to the approved schedule. With this plan, you can have your debt paid off much sooner, saving you thousands of dollars in interest charges.
Consumer credit counseling offers a number of benefits that debt consolidation loans or debt settlement plans do not. These include:
- Working with your creditors to create an affordable payment plan
- Eliminating collection calls that often come at inconvenient times
- Working with a trustworthy counselor who will handle your payment plan as arranged
- Money management counseling in order to avoid future problems
Credit counselors typically work only with unsecured debt, such as credit cards. They can also help you with settling outstanding medical bills, student loans and other bills turned over for collection. Most counselors offer a free no-obligation consultation where they will review your situation with you and let you know what they can do to help. While they do not themselves make loans or offer legal advice, they may be able to refer you to someone who specializes in those fields if it is appropriate.
Consumer credit counseling can be an effective way to bring your unsecured debt payments under control. It is also a great way to learn how to manage your finances in order to avoid debt problems in the future. While it may seem impossible today, a credit counselor can help you create a path toward being debt free in just a few years and back on the road to a solid financial future.
Consumers searching for solutions to their debt problems often discover credit counseling and consolidation services. This is a great choice to help you get your debt under control and reduce the amount of minimum monthly payments you are making. As you perform your research, you may discover that there are non profit credit counseling services out there. What are these and are they a good option for you?
Does a Non Profit Credit Counseling Service Charge a Fee?
One of the biggest misconceptions about a nonprofit credit counseling service is that they don’t charge their clients a fee. You need to remember what nonprofit actually means. Any company or organization that calls itself nonprofit simply puts all earned income back into the business. This can be in the form of employees’ wages or improvements to the business. However, they do sometimes charge a fee for their services. Some companies may request a ‘donation’ instead of charging a fee.
How Does a Non Profit Differ From a Regular Consolidation Service?
The only real difference is where they put their fees. A for profit service may have shareholders or another way that they share the dividends with employees. A non profit credit counseling agency puts all money back into the business.
Which Choice is Better for Me?
It really depends on what your goals are. You need to do your research and narrow your choices down before deciding who you want work with to get out of debt. Non profit versus for profit may mean nothing to you. One is not necessarily better than the other. As with anything, do your research before jumping into any debt consolidation services.
Non profit credit counseling can be a good deal for the consumer if they charge lower fees than a for profit service. However, don’t let the term nonprofit lead you to believe that they are necessarily cheaper or better than another service. You still need to research any company that claims to be a nonprofit to make sure they are legitimate.