Credit and Collections

Most credit departments in America today have become computerized. The credit analysts and collection specialists have been replaced by customer service representatives. The receptionist has been replaced by an obnoxious sounding electronic voice. All these changes have come at a cost to you, the consumer.When applying for credit, the consumer is now to reduced to a set of numbers that are entered into a computer. Based upon a specific formula, the request for credit is either accepted or denied. Each customer service representative in the credit department is issued a generic set of instructions, and granted an equal amount of authority regarding how to handle every request. In the collection department, the customer service representatives are also issued generic instructions about how to handle disputed claims.In collection departments many times, extension and deferral requests are now handled by computers . Injecting technology into both of these departments results in financial and emotional costs to consumers. How many of us have designated thirty minutes of our lunch hour to contact one of our creditors to resolve a problem, and after navigating the electronic maze, have been told the estimated wait for this call would be fifteen to twenty minutes? We have various responses to this situation. Our first inclination is to hang up and get on with our lunch hour. This response is understandable, especially if we are sure that the creditor we are calling is the one who is at fault. Unfortunately it comes with the risk of damaging our credit rating and/or costing us significant late fees or finance charges. Another response is to wait on hold for fifteen to twenty minutes.By the time we talk to a customer service representative, our frustration level is high, and we will likely will have to ask for a quick resolution because our time is running out. In most work places today, personal phone calls are not allowed on company phones. We are required to use our cell phones to make these calls. If it is necessary for us to spend sixty minutes a week contacting our creditors to straighten out their errors, we are using 240 anytime minutes of our cell phone plans. These calls account for over half of a 500 minute cell phone plan!!! In many cases we experience the ultimate in frustration when we spend thirty minutes of our lunch hour trying to deal with a problem, and we discover that the customer service representative we are talking to does not have the authority to handle our dispute. We end the conversation knowing that we will have to spend another lunch hour on the phone with that creditor.Waiting on hold for long periods of time during a work day can cause people to compromise their jobs. Since people can ill afford late fees and finance charges, they feel as if they have no choice but to continue with the phone calls which cut into their work day. If contact with a collection department becomes too difficult, people who start the process in good faith, may convert to become people who do not care anymore. In many instances, being denied quick access to credit and collection departments results in customers incurring damaging information on their credit reports. One of the results of eliminating qualified people in credit departments in exchange for using generic computer driven credit guidelines to grant credit, is higher risk and more costly credit. Chances are that customer service representatives will not be able to solve problems such as a computer increasing an interest rate from 6% to 19.9% on a customer’s bill because the payment is recorded as a day late, even though the payment arrived on time and was misapplied by the creditor’s accounting department.At best, it will probably take multiple calls to the institution to correct the problem. The number of credit cards issued to people that can ill afford to have them is another outcome of generic credit policies. Once again, the subsequent payment defaults on these cards are passed onto all cardholders. Due to the considerable sums of money generated by late fees, finance charges and increased interest rates instated after late payments, credit card companies can afford to carry substandard credit card holders.Some of the results of eliminating collection specialists in collection departments are:1) Generic instructions do not cover all collection problems.2) Customer service representatives do not have enough authority to enable efficient solutions for some common problems.3) Customer accounts become referred further into the collection process due to inadequately trained customer service representatives who cannot “think outside the box”.4) Due to computerization, it is rare to be able to access the same customer service representative twice. Therefore the customer has to give the complete account history each time he or she makes a call in order to bring the new representative up to speed.5) When customer service is outsourced, the people working in the phone banks have no background on the accounts, and are unfamiliar with the original representations made by the company.6) When outsourcing occurs outside this country, many times communication is difficult due to the limited English vocabulary of the customer service representatives.
Before technology was introduced into corporate America, the sales, credit and collection departments worked in concert. In the corporate environment of today, too many times the sales, credit, and collection departments live out the cliche that the “right hand does not know what the left hand is doing”. The consumer is the one who pays for this chaos.

Let’s face it, you have a low credit ranking so you must raise it as a way to make your life less difficult. Whether you are intending to get a home loan, make an application for a vehicle loan, wish to apply for a job and etc., your FICO score is really vital for being approved as well as for having the top conditions.Credit repair activity is pretty basic still in order that it will eventually become effective it has to be conducted at the proper technique and with all the correct methodology, if not chances are you’ll find yourself damaging your ranking. As a way that you will succeed in fixing your credit rating you have to make sure that from this moment you pay all your monthly dues promptly in advance of their scheduled date. It is really significant for the reason that by not accomplishing so, all other actions that you will take to improve your credit ranking will drop their effectiveness.Getting hold of copies of your credit report in order to inspect accuracy of each and every detail is the 1st action you have to carry out in fixing your credit worthiness process. You are looking to clean your credit file from destructive details faults that mess up your credit score.The legislated legalities permit you to call for for an investigation of data inside your report that you question as flawed or incomplete. There’s undoubtedly no commissions due to this. Some individuals who decide to hire a company to research on their account, though just about anything a credit repair service provider are able to do lawfully, it is possible to accomplish by your own at marginal or no price.The damaging elements within your credit statement could be one or maybe more of the followings: late payments, charge-offs, bankruptcies, foreclosure, judgments, collections, excessive score requests and similar records which have damaging impact. After you detect these types of elements with your file you need to send out a dispute letter with supportive documents towards the credit ranking companies.One more credit ranking booster is reducing your debt-to-credit-limit ratio. Typically the suitable step to commence with is settling out your existing debt load. Most of the time, your rankings progressively get higher as your debt load shrink and will notably start to improve the minute your account balances are underneath 50% of the credit account limit. It’s possible to increase the ratio by requesting your existing lenders to increase your credit limit. That will right away boost your debt to credit limit ratio.Additionally it is important to assemble various positive records in your credit history. By making use of secured credit card insured by a money deposit in saving account, you’ll be able to create some positive impression and to show financial institutes that you are financially accountable and credit worthy.