debt collector singapore

Credit Scores: What you should know

When you go for a credit card, you are normally surrounded with several questions. “How much I should spend?”, “What if I exceed the limit” and many more. You may even start doubting yourself whether you really need a credit card or not. One of the things that most commonly goes through a person’s mind is credit score.

A healthy credit score is a guarantee that you can continue with your credit card. You can even apply for further credit when needed. However, it is not always easy to maintain a good credit score if you ‘listen to your heart’ rather than your brain. Debt collectors in Singapore and finance personnel are not really good with feelings so it won’t save you if you exceed the limit.

A credit score is a three digit number that tells your progress with your credit card. The value lies between 300 and 850, the higher it is, the better your credit score.

Summary of Credit Scores

To know exactly where you stand with a certain credit score, we have compiled for you a summary of how credit scores usually work.

If you score between 300 and 580, you are seriously low on your credit scores. You may not be granted further credit and even if granted, the interest rates are going to be too high. If you rank above this range and under 650, you will be granted credit but at high interest rates.

Scoring above between 650 and 710 will allow you to attain credit at moderate rates. The closer you get to the highest possible score, the lower interest rates become. Scoring anywhere above 751 will guarantee the lowest possible interest rates in the market so you may want to end up in this region.

Earning a Good Credit Score

Earning higher scores is not too difficult a job. However, it does require patience and you have to be careful while you spend. Here, we leave you with a couple of easy tips that will help you raise the credit score so that you enjoy the perks of keeping a credit card.

Stay within your limits

There are many credit management tips and here is one of them. Stay within the limits and things will be good. When dealing with credit cards, it is even more important that you check where you stand with your expenses during a month. If you exceed your credit limits, it goes negatively against you and your credit score will drop. However, if you spend less than 30% of your credit card limit, you will get a positive score for your credit card.

Make due Payments

Paying your dues at the right time is a healthy habit that will uplift your credit score quite a bit. If you are lazy and tend to forget things, it is better that you note down the payment due date of the credit card. 

Summary of a successful debt management

Availing a debt management program may not indicate to the best of financial conditions one may have. However, it is better to avail a debt management program from a suitable debt collector Singapore. It can keep you from facing the worse. On one hand where debt management plans can be relieving, they can also be quite expensive as debt management plans don’t come for free. In some cases they are even fraudulent.

Here are a few things you should consider before you take up a debt management program. These steps can act as a guide for you.

Credit Counseling

Before taking up any debt management program, every debtor has the right to a credit counseling session where they can learn about managing their debts. It is quite comprehensive and many believe that this session alone can help debtors set themselves free from debts. Understandably, it is kept hidden and secretive by debt management companies.

Self-Debt Management

Instead of giving the control to someone else, do it yourself. If you can manage your own debts, there is nothing better that can happen for you. Keep a check on your expenses and try reducing them down as much as possible. You might also want to ask the creditors to cut off the late fee in case you can’t pay the debt on time

Advantages and disadvantages of a debt management plan

A debt management plan doesn’t come for free. The companies charge you for the services. There is just another addition to your expenses. It could be costly for you in the longer run so you should reconsider your thoughts about going for a debt management plan.

One major advantage of a debt management plan is that some creditors do not directly give debts so the debt management companies can act as a bridge to help you get the credit from them.

Look for a good credit counselor

Finding a good credit counselor is not all that difficult. There are numerous credit agencies out there who offer good packages so that you can get rid of your debts in the most effective way possible. You should research well about your desired company before opting for their plan. A good creditor counselor will explain its pros and cons of getting into a debt and the standard procedures done and the rights of the debt collectors when in their collection service. 

Authenticity and Legality

Hire a licensed and authorized company. It will save you from a lot of worries which you might not be able to see at present. It gives you a reason to trust the company because a reputed company would never involve in fraud and scamming. For getting an insight to the company’s operations, here is what you should do:

  • Search how the company performs its operations. Which other companies it deals with and what type of clients does it have.
  • Ensure that the company asks for our complete account details.

The relation between you and your debt collector is quite important so you should make all the necessary arrangements before hand to avoid any consequences in future.

5 debt management tips

It is never a great feeling when you are burdened with debt. The thought of having to pay your creditor can sometimes be frightening. If you are one of those who have a debt collector Singapore knocking at the door asking for money you have no idea about, you definitely need help.

This post encircles the key aspect of debt management that will help you understand the mistakes you might be doing while managing your debt. It could be that you are not managing your debts at all. Regardless of what blemishes there may be, you need not to worry.

One of the common reasons why people face a hard time managing debts is that they do not keep a proper check on the cash flow and they are unsure how a debt collection service usually work. Sometimes the debt is borrowed for unnecessary wishes. It just keeps weighing you down.

We have highlighted for you some of the major aspects of debt management that will help you to pay off your debts and save you from embarrassment the next time debt collectors knock at your door.

 

Keep a Note

There are many tips to make your debt management easier and here is one of them. Whenever there is a new debt that you take up, make sure you note it down in a diary. It helps you to manage your finances so that know how much you have to spend in a certain time. If you do not keep a note of your debts, it is a high probability that you end up with more depression and worries.

 

Pay the Most You Can

It is always a good practice to pay your debt as quickly as possible. If there comes a time when you can pay more than the minimum, go for it. It also helps your credit score. If you are to pay every month and you can do it in every two weeks, you should definitely go for two weekly payments. Get it off your shoulders as quickly as possible! If you can’t repay it on time, negotiate and work a solution out.

 

Keep an Eye on DTI

Debt to Income (DTI) ratio is quite vital. Lenders normally check the DTI when they are asked to extend new credit. According to experts, average DTI ratio is 35%. You should try to keep it within this limit.

 

Make Collective Efforts

The best way to reduce debts is to not borrow too much. It will happen only when you limit your expenses. It has to be a collective effort especially if you are the sole earner for your family. Ask your kids and wife to reduce their expenses. Tell your kids about the negative effects of needless spending.

 

Make Timely Payments

This is probably the most important aspect of debt management. If you keep up with time, there are lesser chances of you lagging behind. Make sure that your payments are regular and on time. Once you are left behind in this race, it is always going to be an uphill task for you from there on.

 

Conclusion

So now you know some of the basic aspects of managing your debts. It is no rocket science. All you have to do is use some common sense. It can save you from many troubles.

How Credit Management Policy Facilitates Sellers

Credit management means collecting payments from customers as well as controlling the flow of credit. This function has been used by suppliers, manufacturers, whole-sellers, retailers, and banks to keep credit policies under control. Effective credit management means improvement in revenues and decrease in financial risk for the company.

It’s obvious that a good credit management ensures smooth flow of money from debtors to creditor, but should small-scale businesses have such a policy? And does hiring a professional debt collection service helps? This is the point of discussion for this post.

Importance of Credit Management Policy

Make it a rule of thumb that as soon as your employees exceed 10, you have to create a written set of instructions to control them and have a sound credit management policy for your business. It will help define the following:

  • Rules of operation
  • Stages of operation
  • Sales process

Moreover, it will also clarify the responsibilities of each employee according to the business strategy.

You will see the impact right from the point of implementation. It helps reduce conflicts among workers as well as stakeholders of the company. Commercial aspect of business often cares less about the financial position of the buyers. On the other hand, your accountant and financial manager prioritizes risk management and cash flow analysis, and will have concerns over granting credit to customers.

If you have a sound credit management policy, it will help keep these two extremes work in coordination for the betterment of the company. The policy should be flexible enough to incorporate at which point you should look for a professional debt collector singapore agency for receiving dues.

Credit Management Policy and Sales Process

It will also help establish sales process with well-defined stages, of which debt collection and litigation phases are vital.

Smooth Cash Collection

You need to ensure your business does not suffer from late payments. You need to have structured and professionalized cash collection mechanism; otherwise, your risk management strategy will suffer. A sound collection strategy has following benefits:

  • It improves your credibility as a seller
  • It helps improve your cash flow
  • It helps improve commercial relationship with suppliers and clients.

The debt recovery process

Your cash recovery process must be well defined. It is to ensure whatever you do, should be legal and your customers should not turn away from you. A strategy needs to be devised regarding phone calls, mails, emails and others. Moreover, the policy should be clear enough for the recovery service to follow. Know the tips and tricks in tracking your debts and how to pay them off simply, and of course legally., and of course legally.

As your sales department is involved in this activity, there needs to be a high level of coordination and understanding between the outsourced company and your sales representatives. The recovery process also specified late payment penalties, so that the customers can adhere and pay in timely manner.

Litigation

Litigation phase begins when you failed to recover your dues from delinquent customers, even after sending reminders and notices. There are different legal options for the creditor depending the nature of the company and the types of customers:

Different means to recover dues include:

  •   Lawsuits from sellers
  • Debt collection services
  • Bailiffs
  • Credit insurers

3 Steps to Start Managing Your Debts

Debt in Singapore has been on a rise, yet an average person in Singapore has a high potential to repay his debts.

In the beginning of 2014, the household debts were 73.3% of the GDP, but moving towards the end of the year, they reached 75.8% in the third quarter. Although, the credit growth has slowed down compared to the past decade, even then, the household debt in Singapore, in second quarter of 2014, was 230% of the household income.

The real problem starts when people tend to forget the amount owed, and don’t take measures to control outstanding liabilities. Eventually, they find themselves in trouble when debt collector singapore agencies come looking for them.

So, it is vital to keep track of your financial status and credit score. But, what if you’ve already lost the track?

Before you stressed out from all those daily reminders made by your debt collector, follow these steps and prepare yourself to repay.  

 

1. Assess Yourself

Begin by writing down the following:

  • The amount owed
  • The name of the creditor
  • The rate of interest

Normally, debtors with high sums to repay don’t bother too much about these things. Instead, they tend to shift the debt burden from one creditor to another. In short, they never tally. Debtors need to learn how to proper manage their finance in order to pay off debts as less stressful as possible.

Finance experts say that people try to avoid the problem and this is the reason they don’t tally the numbers. It’s not a good tactic to convince yourself by avoiding the real problem. Check each and everything you owe, including utility bills, consumer debt, car loan, credit card bills, student loan, and mortgage.

Do the calculation as follows:

  • Calculate the debt on credit cards and/or consumer debts
  • Calculate the amount spent annually on interest
  • Calculate the debt you repay out of your monthly salary

 

2. Identify the Root Cause

If you’re transferring high-interest payments again, before doing it, think about the habits responsible for your current position. It’s crucial to know the root cause of the problem rather than looking for temporary fixes.

Unable to find out where your spending goes? Well, that can happen if you’re the one supporting the entire family. Debt recovery services recommend tracking expenses to identify two things:

  • Your weak points
  • Areas where you can save

Try the old-fashioned way by saving receipts and entering the amount into the spreadsheet.

 

3. Don’t Do It Alone

There is always room for negotiation to repay your debts on extended time. However, do not do it alone. By including family members regarding your issue may open up your options and receive different views. Including them into saving activity will make your job much easier.  If you let the kids take part, chances are, you get fresh ideas for cutting back and set a nice budget.

It’s not advisable to disclose the details on your kids, but you can help them understand the bad effects of spending more than you can. Besides, your kids should learn the difference between wants and needs. So, tell them you cannot buy certain toy or game, because you cannot afford it. 

3 Benefits of Debt Collection Services for Small Businesses

Small businesses need funds to operate properly, and what other than debt recovery can keep it running. Well, modern-day terms and methods, such as receivable turnover ratios offer a little relief, given that some of your debtors pay quicker, you cannot ignore the pain caused by delinquent debtors and less reliable customers.

Obviously, when you need funds to invest somewhere else, like your new departmental store, you tend to get infuriated over unpaid customers depriving you of your rightful money. And you know how hard it is to recover.

Locating, informing and calling customers takes time, and suing them takes more. What else can you do? Perhaps, you should call a debt collector Singapore agency.

Successful Debt Recovery

Do you know that US collection agencies recover as much as $50 billion annually? That’s efficiency! And more interestingly, customers cannot complaint how they were treated.

Finding experienced service in Singapore is difficult, but this is also important for your prestige. In educated countries like Singapore where customers are more than aware of their rights and duties, using black hat tactics can go against you.

For successful debt collection, agencies always look for reasonable ways to encourage customers repay their dues.

  • Professional collectors may take aggressive but legitimate actions against debtors.
  • They may involve credit bureaus and report unpaid debts, which is absolutely legal.
  • Customers likely to negotiate and repay their dues, because they don’t want to ruin their credit scores.

Legal Protection

It’s a universal statement, “You should fight for your right”, but things are different when it comes to getting back your rightful amount. Customers know they’re protected by the law and can exercise their rights if creditor or his representative intends to cause them any harm. However, as a debt collector, know your debt collection rights in order to protect your agency at the same time. Other than causing harm, also take note of the crimes that a debt collector should never get involved in.  

You cannot use force to recover your debt, but you can always count on expert debt collector who knows better ways. Why?

  • Debt collectors are usually familiar with collection laws and they work for a licensed company.
  • Instead of forcing customers to repay, professional debt collectors use latest software to assess financial position of the intended customer. They’re smart enough to prove that the customers can, by controlling unnecessary expenses, repay your loan.
  • Agencies with well-trained staff legally compel the customer by seizing his property.

All of these efforts require a certain amount of time, and obviously, you’re too busy to pay attention to all the documentation and recovery. So, play safe and let the “good guys” handle the “bad stuff”.

Flexibility

What is the probability of getting the whole sum of money back, if the customer is not in a condition to repay? Will you make it easier for him and allow him to repay in installments? Or will you reduce the amount (say, the actual cost of goods sold)?

It depends how long it’s been. Ideally, you’d prefer to get back the entire sum, plus the expense incurred on recovery (time, interest and other costs). Anyhow, if your debt has become too old – say, a year old, you’ll be happy to recover the cost.

  • An experienced agency can prepare a suitable debt recovery program that’ll favor you and your customers.
  • Alternatively, you can sell those old debts to recovery agencies and reduce your losses.