Don't Let Medical Bills Ruin Your Credit

Medical bills are the leading cause of bankruptcy according to many financial sources. Unfortunately, many people neglect their medical bills without realizing the impact that those unpaid bills could have on their credit score.

How Medical Bills Can Hurt Your Credit

After you receive medical services, your physician or hospital will bill you for any portion that wasn't covered by insurance. Just like any other bill, medical bills have a due date. If you don't pay by the due date, your bill becomes past due. Hospitals will only send you so many past due notices before they give your account to a third-party debt collector to resume collection efforts.

When the debt collector receives your medical bill, one of the first things it will do is report the account to one or all of the three major credit bureaus (Equifax, Experian, and TransUnion). The medical collection account is considered a serious delinquency and can remain on your credit report for up to seven years, the maximum amount of time permitted by law.

Your credit score - the number creditors and lenders often use to approve your applications for new loans and credit - is based solely on information that's in your credit report. Since having a collection account on your credit report indicates you have a seriously delinquency in your credit history, your credit score will drop when a new collection is added to your credit report. The more medical collections accounts you have, the lower your credit score will be.

Protect Your Credit from Medical Bills

One of the easiest ways to keep medical bills from impacting your credit score is to pay your bills when you receive them. If you can't afford to make payment in full, contact the hospital's billing department to make payment arrangements.

Even if you have health insurance, don't assume that your insurance company will always handle bills in a timely manner. If you receive a bill that should have been covered by insurance, contact your insurance company to find out why the bill wasn't paid. It could have been a simple oversight by hospital billing or the insurance claims department. Insurance companies often cover only a certain percentage of medical bills, so you might be responsible for some portion of medical debt after the insurance company has covered its part.

To find out whether you have unpaid medical bills out there, check your credit report.

To be doubly safe, you might contact the hospital or physician's billing department to check the status of your account, especially if you've received any medical services within the past year. Sometimes, just because the medical bills aren't on your credit report doesn't mean they don't exist. By contacting the medical provider, you'll know for sure whether you have outstanding medical bills that could end up hurting your credit.

For more information contact Mark Bustamonte at 954-707-2932 or visit

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What is FES DebtZero?

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Can anybody qualify or use FES DebtZero? Is FES DebtZero right for me?

If you have a checking account, make more money than you spend and have debt that you want to pay off quickly then FES DebtZero will work for you.

How Does FES DebtZero Work?

1. Deposit Income

Deposit your income, as you normally would, into your standard checking account. It doesn't matter if you direct deposit or hand it to a teller. FES DebtZero is a web-based program that is used as a management tool like a navigation system for your finances. Provide the secure FES DebtZero system your financial overview and the system will offer step-by-step direction so you can properly apply optimal payments toward your debt. FES DebtZero directs you on the best quickly pay off your debt that is also conducive to wealth accumulation. The less money that you have to pay on interest, the more money you'll have growing in your account.

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The program looks at your deposited funds, expected expenses, dates they are due, and safely reserves funds for any unexpected expenses. FES DebtZero then analyzes this information and generates monthly prompts that will provide precise directions for paying off 100% of your debt, without any alteration to your existing lifestyle. In other words, you will still be able to enjoy yourself while paying down your debt!

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Mark Bustamonte Regional Sales Director Financial Education Services 954-707-2932 Direct

Financial Education Services (FES) and FES Protection Plan

Are banks the only ones looking at my FICO score, and do they have to pay the same fee I do?

No and no. The sites show a scale of interest rates for different types of loans, but did you know that your insurance agent also uses an insurance score to help determine your premiums? The Fair Isaac Company developed the first insurance scoring model in 1998 and there have been some updates since then. Concrete information on this subject is very sketchy, but my personal insurance agent told me that home owners' policies cost up to 40% more if your credit is in the toilet, but vehicle insurance premiums more than double with bottom-of-the-barrel credit scores. I asked if I could get a table with this information and was told that I couldn't. Farmer's Insurance is not using the FICO score specifically, but they do have a score-based model that uses credit report data.

Employers are relying more on credit scores for hiring decisions and for promotions, but it doesn't stop there. Many utility companies will require a deposit prior to connecting service and some are using your credit score to determine your kilowatt/hour RATE! Just imagine, you might be paying more for electricity soon based on a low credit score.

I'm sure that no one is surprised to find that banks and insurance companies pay a fraction of what you pay to get the same information. On Myfico.com you will pay $15.95 to get FICO Standard, which only provides scores and bureau information for Equifax and Trans Union. Due to an on-going law suit between Fair Isaac and Experian, you cannot purchase your Experian FICO score at Myfico.com. As a national mortgage lender, we can purchase all three FICO scores with the matching bureaus for $9.86. I'm sure the big banks get an even better discount.

Understanding Your Credit Report

A credit report contains all your information that is reported to the three credit bureaus. The three credit bureaus are Experian located in Chester, PA; Equifax located in Atlanta, GA; and Equifax located in Allen, TX. The information reported to the credit bureaus is your payment history that contains the following information:

Personal Information - the personal information on the credit report lists the basic information about the individual. None of the information listed in the personal information effects the credit score calculation. The personal information on the credit report contains any name used, birth name, AKA or any name the creditor has used when applying for credit. The date of birth, current and previous address, employment history, and the dates the information was reported are also listed, credit report.

Summary - the summary section of the credit report contains a categorized list of all the accounts on the credit report. This synopsis allows the viewer a quick review of the credit report and compares the data that is reported to the three credit bureaus.

Account History - The account history on the credit report contains all the account a person has open or closed. This section has credit history of your payments. Each of the account will contain: Account Number, Account Type, Creditor Name, Monthly Payment, Highest Balance Owed, Credit Limit or Loan Amount, Date Open or Closed, Payment History, and if it is a joint or individual account.

Inquires - the credit report contains two types of inquires. The first type of inquire on the credit report is inquires where a business pulled the credit and the second type is when an individual applies for credit. When you apply for credit it remains on your credit report for two years. When you show a history of declined credit applications it makes you look desperate. More than likely a lender will not loan money to a desperate person. Multiple approved applications send a different message. When you're approved for a loan or a line of credit, the lender has made a commitment to loan you the funds. Your ability to repay these lines of credit and loans depends on your income. Your capacity to take on additional debt is diminished by the amount of debt or potential debt outstanding.

Public record information - Public records on a credit report may include information such as judgments, foreclosures, lawsuits, wage attachments, bankruptcies, state and federal tax liens, and past-due child support. This information is reported by county, state, and federal courts to a variety of credit reporting agencies. The agencies retain the information in a credit report and use the information along with other pertinent credit data to determine your credit score. Since public records reflect poorly on your credit rating, you'll want to make sure that this section of your report stays spotless. This information will remain on your credit report for seven years. However, if the record relates to bankruptcy, it will remain on your report for 10 years.

I am a member of the Financial Empowerment Network Team and Prime Financial Credit Services

Your Credit Score Is Yours to Control

Are you confused by credit, and how to create a better credit score? Don't feel bad, many consumers and business people find it hard to understand why their credit score is low. They pay their bills. And when they are a little late on a payment, they pay extra fees to the Lenders to make up for that. The Lenders enjoy great profits, and yet, the Borrower gets penalized more. Is it fair? I say NO! Enough! It's time for us to take control of our credit scores, and get them to reflect accurately, what kind of people we really are. In fact, the United States government agrees. Toady, there are laws to protect us, and allow us to take back control of our credit histories and credit scores.

Use these laws to make sure you aren't forced to pay more for auto loans, credit cards, mortgages, insurance and utilities. Besides costing you more money in monthly bills, we've been hearing more about people who get job offers that are later taken back, because of a "bad" credit score, a result of having been out of work for a year or longer. They didn't use credit to support a luxurious lifestyle. Ironically, they are penalized by taking away the very thing that they need to get back on their feet and to get back to paying their bills. Is it just me, or does it seem ridiculous to you as well? Credit reporting agencies, and Lenders, seem to believe that it's their right to penalize consumers to any level that they choose. The US government says it isn't their right. It is their right to report late payments and defaults on payment agreements, to the extent that they report it accurately. Is the information on your credit report accurate?

Frits Tessers is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Personal Coaching for more information on Frits Tessers.

Credit Reporting Guidelines

Below are some very important credit reporting guideline that you as a consumer should be aware of.

The Fair Credit Reporting Act (FCRA) was designed to promote accuracy and to ensure that the credit reporting agencies maintain precise information regarding consumer credit.

The Federal Trade Commission (FTC) enforces the FCRA and is the watchdog over the three credit reporting agencies. The FTC enforces fines and may shut down any business that does not operate in compliance with the FCRA.

The FTC stipulates the maximum length of time a negative item can stay on a consumer's credit report is 7 years, unless it is a Public Record. Bankruptcy and other public records may be legally allowed to remain on the credit report for 10 years.

The Credit Reporting Agencies have 30 days to investigate our challenges according to the FCRA. The agencies can verify, modify, or delete a negative item in question. If a creditor takes longer than 30 days to respond back to the CRA for their request for investigation, the information should be automatically deleted.

It is important to note that the agencies are allowed to temporarily delay sending the consumers back their updates by sending a notification within the 30 days that they have received the requests and an investigation is pending.

The FTC also regulates the Fair Credit Billing Act (FCBA), which is designed to protect consumers from inaccurate information by their original creditors. The FCBA states that the consumer is not liable for unauthorized charges and other billing mistakes by their original creditor. The FCBA also states that that the original creditor is responsible for verification of any adverse account that the consumer challenges, and also responsible for any illegal activities by third party collection agencies that the original creditor assigns the account to.

The FCBA bounds original creditors to correct inaccurate reporting of information to the credit reporting agencies.

Fair, Isaac and Company of California originally developed the concept of the credit scoring model for use by financial institutions. Today, most credit agencies and lenders calculate your credit score (FICO) based on their formula.

Credit scores are being used increasingly by potential employers as a considering factor for hiring.

Credit scores are now being used on a small scale to determine auto insurance and utility rates.

The credit score is a computation of many different factors, including payment history, proportion of debt to available credit, and amount of credit used.

The length of a consumer's credit history counts towards 15% of consumer credit scores.

A consumer's payment history counts towards 35% of credit scores.

The type of credit a consumer has open determines 10% of their credit score. The different types of credit include: secured - mortgages, unsecured/revolving - credit cards, installment - car payments and small home improvement loans.

In calculating credit scores, the amount owed is an important indicator of a consumer's credit worthiness, and equates to 30% of their credit score. If a consumer is carrying high balances on many accounts, creditors may see this as a sign of financial overextension, or possibly irresponsible credit use,  and may assign the consumer a high risk. Consumers should make every attempt to keep account balances at 35% of their allowable credit limit.

The amount of newly established credit accounts for 10% of the credit score.

The best way for a consumer with little or no credit history to establish good credit is by applying for a secured credit card and making the payments on time.

For more information go to: Credit Reporting Guidelines

How to Establish Good Credit

When you have little or no credit history, applying for loans and credit can be difficult, if not impossible. Lenders like to see a record of payment history and a current credit score before they extend credit or loans. This information also helps them determine what interest rate to offer. If you do not have a credit history, here are some ways to build it one: Understand What Lenders Are Looking For If you are looking to establish credit for the first time, lenders can't look to your credit score to decide whether or not to lend you money. In these situations they have to examine other factors that can help them decide if you are a good credit risk or not. Here are basic guidelines to follow to establish or re-establish your credit: 1) First and foremost, pay any bills that come your way on time. 2) If you don't have a checking account, open one. You have very little credibility with lenders if you don't have at least a checking account and preferably a savings account as well. Just as importantly, be sure not to overdraw your bank account. Bouncing checks sends a signal to potential lenders that you can't manage your daily finances and are therefore not a good credit risk. 3) Establishing a relationship with a bank will improve your chances in obtaining a loan or credit card through them. If you already do business with a bank, they should be the first place to look. 4) Open a charge card with a local department store or apply for a gasoline credit card. Pay off the entire balance each month. Remember, if you cannot pay off the balance each month, you are spending outside your means. 5) Keep in mind that a lender or creditor may say you are approved for a particular amount, but that does not mean you have the resources to repay it quickly. Borrow only what you can afford to repay quickly. 6) Another important factor lenders look at is your employment history. They want to see if you are able to hold a job or if there are periods of unemployment. Your ability to hold a steady job can improve the likelihood of getting approved. 7) Lenders will also look to see how often you move and whether you rent or own. As with employment history, it pays to have a stable residence. 8) Even without a credit history, it is possible to sign up for many utilities in your own name. Having an electric or gas bill, telephone, cable, or water service in your name also helps. Just having your name on these accounts won't establish a credit score, but it can be helpful for first-time borrowers. 9) Get a secured credit card. To obtain this type of card, you deposit a specified amount of money into a financial institution who will then issue you a bank credit card. The amount you deposit is your credit limit. After you maintain that account in good standing for a while, you may be able to obtain a regular credit card or loan. Establishing Credit is Only the First Step Establishing a good credit history takes time. There are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months.