What is a credit score? A credit score, sometimes referred to as a FICO score is a numerical representation of data that is found in your credit report. FICO credit scores look a lot like SAT scores and range from three hundred to eight hundred and fifty. These scores are incredibly powerful. In the last year alone, twenty five billion credit decisions were made based on FICO scores.

These were not simply decisions about whether you would be approved for a new credit card but also how much you can borrow, whether or not you will qualify for an increase in your credit line, and what type of interest rate you will pay. Your credit score determines whether or not you will qualify to rent an apartment, whether or not you can get a cell phone, or whether you will actually get the credit card for which you’re “pre-approved.” Also, it factors into whether an employer will hire you, whether you will qualify for a cash advance, and what sort of auto insurance premium you will pay.

So that’s a pretty powerful snippet of information there. And it really is a snapshot of your bill-paying and borrowing behavior over the previous twenty four months, so as time goes by, you will have the capacity to change it for the better. Thirty five percent of your score is founded upon how well and up to date you stay on your bills.

Thirty percent is a measure of how much credit you have available to you and how much of this credit that you are utilizing. Ten percent is based on your search for new credit, how recently you have opened up, or asked about opening new accounts; ten percent is the composition of your file, the percentage of your file that is bankcard debt and installment debt.

Finally, fifteen percent is a measure of the length of your credit relationships, how long you have had the cards. This way you can put the cards you have in priority order and choose older accounts that can improve your credit score first.

Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies

You should call in a credit collection agency sooner rather than later. The longer you wait to begin the collection process on overdue accounts, the less of a chance you’ll have at recovering your money.

The day after an account becomes overdue, you should place a polite phone call to the customer who owes you money. If that doesn’t work, you may want to send a few reminder letters yourself, or you may want to go directly to a credit collection agency. Base your decision on how much money is owed to you and the history of your relationship with the customer. If it’s the first time you are doing business with them, you’ll want to call in a credit collection agency earlier than you would with a 10-year customer with a solid credit history.

Most companies call in a credit collection agency once a debt is 60 days to 90 days past due. If you wait much longer than 90 days to begin recovering unpaid receivables, your chance of collecting drops dramatically.

If you discover that your account has gone out of business, find out what type of business it was – a corporation, a partnership, or a proprietorship. If it was a corporation, don’t even bother calling for the help of a collection agency. It is doubtful that you, or any one else, will be able to squeeze the last few nickels out of that client. If the company is a partnership or a proprietorship, you may be able to get the individual owners of the company to pay you out of their own pockets.

If you try to recover an account and fail, consider that bad debt a tax-deductible item (Tax Code IRC 166, Reg. 1.166). You will be able to deduct the cost of the goods sold (but not paid for) as an ordinary business expense. You can’t deduct any lost profits from the sale, nor can you deduct the money owed for services rendered.

Mallory Megan works for a debt collection company. Also she does articlesabout finance and business, consumer spending and collection agencies.

On November First of 2009, financial institutions and other creditors were ordered to comply with the Red Flag provisions of the Fair and Accurate Credit Transactions Act of 2003. The purpose of the Red Flag rules is to mitigate and prevent identity theft. Identity theft could be defined as any fraud involving people getting particular benefits by pretending to be someone else.

Broad in scope, the Red Flag rules definition of financial institutions is any organization engaged in insurance, banking, or similar activities, and a good amount of the definitions come with leeway to expand compliance demands. Any consumer account involving multiple payments or transactions that is offered to organizations can be subject to the rules.

The rules in a nutshell state that any financial institution or creditor that may be subject to a reasonable and foreseeable risk of identity theft must develop an identity theft prevention program in order to remain in compliance. These programs should include identification of any activity that may be considered identity theft. They should pursue red flags that have already been identified, and should take action to prevent and mitigate theft. Finally, period review and updating of red flags are necessary to comply with the Red Flag provisions.

In addition, the Red Flag provisions state that an institution’s identity theft prevention program shall be managed and written by senior company management. Training and overseeing this service are required.

Identity theft is an expensive and disparaging issue; business and consumer losses came to about $56.6 billion in 2005 alone. But when one considers how harmful identity theft can be to a business, not complying with these regulations can be even more expensive and harmful. Potential losses, costly investigations, regulatory fines and potential lawsuits are all negative consequences of non-compliance. It seems as though their best bet is to follow the rules.

Mallory Megan is employed by a debt collection company. She also writes stories on business and finance, the credit industry and debt collection.