Finance Guy
Can you discuss credit scores and how a slow pay affects this?
Can you discuss credit scores and how a slow pay affects this?
Credit Score
- Thread starter TeamCaffee
- Start date
FinanceGuy
Active Expediter
Good Morning Linda & Bob:
While credit scores are a necessary part of the finance arena, it is very important that owner-operators in the expediter industry be aware that they actually have 4 or 5 credit scores that can affect them whenever they are applying for commercial credit.
Most everyone is aware that they have three separate and usually different personal credit scores. Experian, Equifax, and TransUnion are the three main bureaus that collect and offer credit information to credit granters who pay these bureaus for this information.
The primary reason that each bureau may have a different credit score for an individual to two-fold; not all credit accounts report to all three bureaus and each of the bureaus have they own formula for computing the scores.
In addition to the personal credit scores, commercial accounts also have a PayNet report and a D & B report. These credit agencies report on how businesses (remember owner-operators are a business) handle their commercial borrowing.
With all that said, and to answer Linda & Bob's question about how much a slow pay affects your score, the answer is "it depends." Each of the various bureaus and agencies mentioned above calculate the "penalty" for a slow pay differently. Also the Fair Isaacs Formula that each of the bureaus use to compute their credit scores was revised in 2008 to better reflect the concerns of the banks about the mortgage crisis and the credit crisis in general and the amount of drop from a slow pay was increased.
Bottom Line: In general, a single slow pay can drop a credit score by 20 to 40+ points. Those individuals that have higher (700+) credit scores at the time the slow pay occurrs actual get a larger drop in their score because they are not supposed to have slow pays.
Owner-operators should treat all of their credit scores like valuable business tools. They can help you or hurt you depending on how well they are managed and protected.
While credit scores are a necessary part of the finance arena, it is very important that owner-operators in the expediter industry be aware that they actually have 4 or 5 credit scores that can affect them whenever they are applying for commercial credit.
Most everyone is aware that they have three separate and usually different personal credit scores. Experian, Equifax, and TransUnion are the three main bureaus that collect and offer credit information to credit granters who pay these bureaus for this information.
The primary reason that each bureau may have a different credit score for an individual to two-fold; not all credit accounts report to all three bureaus and each of the bureaus have they own formula for computing the scores.
In addition to the personal credit scores, commercial accounts also have a PayNet report and a D & B report. These credit agencies report on how businesses (remember owner-operators are a business) handle their commercial borrowing.
With all that said, and to answer Linda & Bob's question about how much a slow pay affects your score, the answer is "it depends." Each of the various bureaus and agencies mentioned above calculate the "penalty" for a slow pay differently. Also the Fair Isaacs Formula that each of the bureaus use to compute their credit scores was revised in 2008 to better reflect the concerns of the banks about the mortgage crisis and the credit crisis in general and the amount of drop from a slow pay was increased.
Bottom Line: In general, a single slow pay can drop a credit score by 20 to 40+ points. Those individuals that have higher (700+) credit scores at the time the slow pay occurrs actual get a larger drop in their score because they are not supposed to have slow pays.
Owner-operators should treat all of their credit scores like valuable business tools. They can help you or hurt you depending on how well they are managed and protected.
Hi All,
From what i see is that what KboeE is talking about is a PAY DAY LOAN, Expensive is not the word, Its like borrowing from a finance company, if you run late or miss a payment, it doubles for the following month and the interest rate is really 100% if you miss for that month.
The best way is to keep a close watch on your Credit report. You are entitled to 1 Free Credit Report from all 3 reporting agencies. Experian, Equifax, and Transunion . AnnualCreditReport.com each year. No Credit Card Required and no trial period.
Once you recieve you annual credit report... you can then monitor it yourself by going to CreditKarma.com, or Creditsense.com anytime with no limit.
There is no way that there is anyone that can actually REPAIR YOUR CREDIT except yourself, by getting your annual Report you can actually check anything that you know what and what not should be on it, or question some information that they have about you. Also if your married you must each check your report separately, they do not do combined reports, due to each individuals credit information, like primary account holders/and authorized user.
So the best thing to do is keep your payment up to date, and i myself know that might be a problem at times.
Here is a tip, If you are going to have to make a late payment after the due date, call the holder of the account, and see if they will work with you. there are times when you might pay online, and its after a certain time, like 3pm and you pay it at 4pm, you might be able to hold the penality, and the late report. as long as you have the proof of payment.
So check it out.
I am not a credit maven, nor know really anything about credit scores, except how to get free one's,
So give it a try.
Any questions please do not hesitate to ask.
Franklin Katz, RTRP, ATP, PA, PB
Frank's Tax & Business Service
315 E. King St.
Kings Mountain, NC28086
Local # 704-739-4039 Toll Free# 877-857-1040
E-Mail: [email protected])
Web: Kings Mountain, NC Accounting Firm | Home Page | Frank's Tax & Business Services
IRS Circular 230 Notice: Unless expressly stated otherwise inthis
transmission, any tax advice contained herein, forwarded with or attached to
this message was not and is not intended to be used, nor may it be relied
upon or used, by any taxpayer for the purpose of (1) the avoidance of any
tax-related penalties under the Internal Revenue Code or applicable state or
local tax law provisions, or (2) promoting, marketing or recommending to
another party any tax transaction or tax-related matters that may be
addressed herein.
From what i see is that what KboeE is talking about is a PAY DAY LOAN, Expensive is not the word, Its like borrowing from a finance company, if you run late or miss a payment, it doubles for the following month and the interest rate is really 100% if you miss for that month.
The best way is to keep a close watch on your Credit report. You are entitled to 1 Free Credit Report from all 3 reporting agencies. Experian, Equifax, and Transunion . AnnualCreditReport.com each year. No Credit Card Required and no trial period.
Once you recieve you annual credit report... you can then monitor it yourself by going to CreditKarma.com, or Creditsense.com anytime with no limit.
There is no way that there is anyone that can actually REPAIR YOUR CREDIT except yourself, by getting your annual Report you can actually check anything that you know what and what not should be on it, or question some information that they have about you. Also if your married you must each check your report separately, they do not do combined reports, due to each individuals credit information, like primary account holders/and authorized user.
So the best thing to do is keep your payment up to date, and i myself know that might be a problem at times.
Here is a tip, If you are going to have to make a late payment after the due date, call the holder of the account, and see if they will work with you. there are times when you might pay online, and its after a certain time, like 3pm and you pay it at 4pm, you might be able to hold the penality, and the late report. as long as you have the proof of payment.
So check it out.
I am not a credit maven, nor know really anything about credit scores, except how to get free one's,
So give it a try.
Any questions please do not hesitate to ask.
Franklin Katz, RTRP, ATP, PA, PB
Frank's Tax & Business Service
315 E. King St.
Kings Mountain, NC28086
Local # 704-739-4039 Toll Free# 877-857-1040
E-Mail: [email protected])
Web: Kings Mountain, NC Accounting Firm | Home Page | Frank's Tax & Business Services
IRS Circular 230 Notice: Unless expressly stated otherwise inthis
transmission, any tax advice contained herein, forwarded with or attached to
this message was not and is not intended to be used, nor may it be relied
upon or used, by any taxpayer for the purpose of (1) the avoidance of any
tax-related penalties under the Internal Revenue Code or applicable state or
local tax law provisions, or (2) promoting, marketing or recommending to
another party any tax transaction or tax-related matters that may be
addressed herein.
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I spent the past 25 1/2 years since high school mostly self employed, paying my bills on time, too many times paying myself and my family last, sometimes not at all. I don't live off credit cards, I look in my wallet or check by bank account balance and have the ability to say "No, we cant afford it, I know we need to have the plumbing repaired Its going to have to wait."
In fact I cant stand the concept of credit. With the exception of the truck payment book, with a ridiculous interest rate now gone. I've been self sufficient, and financially disciplined.
The reward for doing the right thing all these years? When I applied for a five thousand dollar loan so I can upgrade my truck a few months ago? assessed at $12,000.00 - $15,000.00 I was told my credit score and collateral weren't good enough .
The lesson I have learned?
Credit reports are B.S fantasies.
Bob Wolf.
In fact I cant stand the concept of credit. With the exception of the truck payment book, with a ridiculous interest rate now gone. I've been self sufficient, and financially disciplined.
The reward for doing the right thing all these years? When I applied for a five thousand dollar loan so I can upgrade my truck a few months ago? assessed at $12,000.00 - $15,000.00 I was told my credit score and collateral weren't good enough .
The lesson I have learned?
Credit reports are B.S fantasies.
Bob Wolf.
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zorry
Veteran Expediter
When you have no credit, you have no credit score.
Bob, get a credit card even if it has a $500 limit. Use it for gas or groceries. Pay it in full each month.
A credit score just reports proper credit management. Do it right =higher scores.
Higher scores means better credit deals. Lower interest,terms.
They get very tricky and complex with debt to limit ratios, etc.
Pay on time is the best thing to do.
Bob, get a credit card even if it has a $500 limit. Use it for gas or groceries. Pay it in full each month.
A credit score just reports proper credit management. Do it right =higher scores.
Higher scores means better credit deals. Lower interest,terms.
They get very tricky and complex with debt to limit ratios, etc.
Pay on time is the best thing to do.
Zorry, That was my experience years ago with finance companies. if I was late on a payment it doubled, at that time, But things change, SC is the only state that offers Payday loans, that I know of, and I have had some of my clients tell me about them, that is all I can tell you. I have no real experience with them. so this is all here say. Frank
Daffyduck528
Expert Expediter
Lol. But don't they just call part of it a 'fee' so it doesn't look like ridiculous interest? I thought that was pretty clever.
paullud
Veteran Expediter
I use Dave Ramsey.
BETTER credit scores every month.
The Dave Ramsey method is more of a who cares about your credit score because you're not going to need it approach. It is the method I am working on and I expect to be debt free by winter.
Sent from my SCH-I535 using EO Forums mobile app
I use Dave Ramsey.
BETTER credit scores every month.
Yup the best advice from Dave, if only most of us can follow and stick with instructions.
I use the Tina Evans method, good credit scores for 15 yrs. and counting !!!!!