5 Tips to Improve Your Credit Score

5 Tips to Improve Your Credit Score

Your credit score plays an important role in your life that can help put you on the right path towards financial success, or veer you off course. It can affect everything from whether or not you get approved for an apartment to getting a low interest rate on a car loan. If you have a poor credit score, you can end up paying hundreds or even thousands more in interest over time.

Fortunately, there are a variety of easy steps you can take to start building good credit. Here are five ways you can improve your credit score starting today.

    1. Pay bills on time

One of the biggest things that affects your score is a record of timely payments. When you are juggling bills and expenses, it can be easy to lose track and end up missing one, which can negatively impact your credit score.

To avoid missing payments, set up automatic payments for your recurring bills, like rent, electricity and cable. For other bills that do not occur monthly, such as car insurance, put reminders on your calendar to remind you to pay before the bill is due.

    1. Use less than 30% of your available credit

Another factor credit companies use to determine your score is your credit utilization ratio. This is the amount of credit you use compared to the amount you have available. For example, let’s say you have a credit card with a limit of $10,000, and you have a balance of $3,000. That means your credit utilization is at 30%.

Use less than 30% of your available credit to keep your score high. If you rack up too much of a balance relative to your limit, your score will go down.

    1. Monitor your credit

There are a variety of services that give you a free credit report, so there’s no excuse to not know your credit score and monitor it. Regularly review your credit report for any errors, such as unauthorized accounts or credit cards that do not belong to you. Erroneous charges can end up bringing down your credit score.

You can sign up at creditkarma.com to get free access to your credit scores and reports, with weekly updates.

    1. Ask for a credit increase

Because credit utilization plays a big role in your credit score, you can increase your score quickly by asking for a credit line increase. If you are in good standing with your credit card company, meaning you have not missed payments, you can call and ask them to raise your credit limit. With a larger amount of credit available, your score will go up.

If you do increase your credit limit, it can be tempting to spend a little extra, now that you have more credit available. Don’t fall into that trap! Remember to use 30% or less of your available credit to keep your credit score high.

    1. Consolidate credit card debt

If you have high-interest credit card debt, consider consolidating it with a personal loan. 74%1 of Lending Club customers reported an increase in their FICO scores within three months of taking out a personal loan for debt consolidation, with an average increase of 19 points. Credit cards are a form of revolving debt, while personal loans are installment debt. Having a variety of different types of debt on your credit report can help boost your score.

By consolidating, you can also pay off your debt faster while saving money. Borrowers who used a personal loan through Lending Club to consolidate debt or pay off high-interest credit cards reported that their new interest rate was an average of 30%2 lower than what they were paying previously on their outstanding debt or credit cards. Over the length of your repayment term, that means you may save hundreds of dollars.

Building your credit score

Building your credit score can take time, but if you consistently apply these five tips, you can improve your score and take control of your finances.

If you have decided that a personal loan for debt consolidation is right for you, check your rate today with no impact to your credit score!

10 Key Steps To Getting A Small Business Loan

Small business loans are up to date from a huge range of traditional and opportunity up to daters. Small commercial enterprise loans can help your business grow, fund new studies and development, assist you enlarge inup-to-date new terriupdatedries, decorate sales and marketing efforts, up to date lease new people, and much more.

this article sets forth 10 key steps up-to-date take in getting a small business mortgage, with some sensible recommendation and perception at the lending manner.

1. understand the one-of-a-kind kinds of Small commercial enterprise Loans up-to-date

There are a couple of styles of small enterprise loans up-to-date. The alternatives range depending up-to-date commercial enterprise desires, the duration of the loan, and the specific phrases of the mortgage. right here are some of small business mortgage picks:

Small commercial enterprise line of credit. under a small commercial enterprise line of credit, your commercial enterprise can up-to-date budget from the lender as needed. There could be a cap on the amount of finances handy (e.g., $one hundred,000) however a line of credit is useful for coping with a agency’s coins waft and unexpected fees. there will commonly be a fee for setting up the road of credit, but you don’t get charged hobby until you absolutely draw down the funds. hobby is usually paid up to date and the essential drawn down on the road is regularly amortized over years. however, most traces of credit require renewal annually, which may additionally require an extra price. If the line isn’t always renewed, you’ll be required up-to-date pay it in complete at that time.

accounts receivable financing. An accounts receivable line of credit is a credit facility secured with the aid of the employer’s debts receivable (AR). The AR line permits you up to date get cash immediately depending on the level of your money owed receivable, and the hobby fee is variable. The AR line is paid down because the money owed receivable are paid by using your up to datemers.

working capital loans. A working capital mortgage is a debt borrowing up to date used by the organization up-to-date finance its day by day operations. groups use such loans up to date manage fluctuations in revenues and fees up-to-date seasonality or different circumstances of their business. some working capital loans are unsecured, but corporations that have little or no credit recordsupdated will up to date pledge collateral for the loan or offer a personal assure. working capital loans up to date beupdated short-term loans of 30 days up to dateupdated year. Such loans normally vary from $5,000 updated $one hundred,000 for small agencies.

Small business time period loans. term loans are commonly for a fixed dollar amount (e.g., $250,000) and are used for business operations, capital fees, or expansion. hobby is paid up to date and the fundamental is usually repayable within 6 months upupdated years (which may be amortized over the time period of the mortgage or have a balloon charge at the up-to-date). time period loans may be secured or unsecured, and the interest may be variable or constant. they may be excellent for small organizations that want capital for increase or for big, onetime fees.

SBA small enterprise loans. a few banks provide attractive low-hobby-rate loans for small organizations, subsidized and warranted by the U.S. Small commercial enterprise management (SBA). up to dateupdated the SBA assure, the hobby rate and compensation phrases are extra favorable than most loans. loan amounts range from $30,000 updated as high as $five million. but, the loan system is time consuming with strict requirements for eligible small businesses. go upupdated the SBA internet site to look a listing of the one hundred maximum active SBA up to daters.

device loans. Small companies can purchase gadget through an system loan. This usually calls for a down payment of 20% of the acquisition rate of the gadget, and the loan is secured via the gadget. interest on the loan is generally paid up to date-monthupdated and the primary is commonly amortized over a - updated four-yr period. The loans may be used up to date buy system, up-to-date, and software. mortgage amounts normally range from $5,000 updated $500,000, and may accrue interest at either a set or variable price. equipment loans also can on occasionupdated be established as equipment leases.

Small business credit cards. even as a few enterprise up to date can be wary of using them, small enterprise credit playing cards can also act as brief-time period small business financing. hobby prices will vary depending on the credit card issuer, the quantity availableupdated on the card, and the creditworthiness of the holder of the cardboard. Many small business credit card issuers require the predominant up to daterupdated up to date be co-responsible with the organization. Issuers of small enterprise credit playing cards consist of American specific, CapitalOne, bank of the usa, and plenty of others. Many credit score cards provide promotional introducupdatedry charges of zero% for a quick time frame (6-nine months). Cashback and rewards packages up-to-date earn rewards from purchases on the credit score card.

 2. studies the up-to-date up-to-date

There are extra lendersupdated than ever earlier than willing up to date lend up to date small organizations, and among the crediupupdated may be discovered from a easy online seek. here are the main types of up-to-date:

 Direct on line up to daters. There are some of on line crediupupdated that make small business loans thru a surprisingly clean on line process. reputable organizations including speedy Capital offer very speedy small business cash advances, operating capital loans, and short-term loans in quantities from $5,000 up-to-date $500,000. sites inclusive ofupdated Fundera and LendingTree provide you up-to-date up-to-date more than one lendersupdated, appearing as a lead era provider for up to daters.

huge commercial banks. The traditional up-to-date updated the small enterprise marketplace are banks along with Wells Fargo, JP Morgan, and Citibank. these up to dateupdated slower with extra rigorous mortgage underwriting standards.
neighborhood network banks. Many network banks have a strong desire up to date make small business loans updated neighborhood businesses.

Peer-up-to-date-peer lending web sites. There are some of sites that act as middlemen between character and institutional up-to-date and small up-to-date, such as Prosper, LendingClub, and FundingCircle. these crediupupdated could make choices notably quick.

financial institution crediupupdated subsidized through SBA guarantees. some of bank up-to-date problem loans subsidized by way of the SBA, and, as cited above, this backing lets in the up to date up to date provide greater attractive terms.

3. count on How the Lender Will View Your credit and danger Profile

lendersupdated in the end make a judgement name on whether or not up-to-date make a small enterprise loan primarily based on the borrower’s credit score and hazard profile. up-to-date will study the following elementsupdated, so review them cautiously and remember taking any appropriate remedial movement:

credit score/credit score record. lendersupdated will evaluate your credit score file, credit score rating, and up-to-date of making timely payments underneath credit score cards, loans, and dealer contracts. So evaluate your credit score record and clean up any blemishes that you may.

exquisite loans and cash go with the flow. up-to-date will evaluation your tremendous loans and money owed up-to-date decide that your cash waft may be sufficient up-to-date pay current loans and responsibilities up to date the brand new loan pondered.

belongings within the commercial enterprise. crediupupdated will evaluate the property inside the business (especially modern property along with coins and debts receivable) to peer if there is a superb base of assets up to dateupdated after inside the occasion of a loan default.

Time in commercial enterprise. up to daters will generally tend up-to-date appearance more favorably on organizations which have been running for numerous years or greater.
up-to-date within the employer. up to date will view the agency greater favorably if it has professional project capital updated, strategic updated, or outstanding angel tradersupdated.

monetary statements. up-to-date will scrutinize your financials, as set forth inside the next phase below.

4. make sure Your financial Statements Are so as

relying on the scale of your mortgage, your monetary statements and accounting information could be reviewed cautiously by the lender. So make certain they are whole, correct, and thorough—upupdated stability sheet, profits and loss statements, and coins drift statements. The lender will analyze your coins flow, gross margin, debt-up to date-fairness ratio, bills payable, money owed receivable, EBITDA, and more, so be prepared up to date questions about those up to datepicsupdated. recollect having your accountant look over your economic statements up to date expect issues a lender may additionally enhance.

up to date decide on monetary statements which have been audited through a licensed public accountant (CPA). but many small groups don’t want updated incur the costs of an audit, so one alternative is up to date have the economic statements “reviewed” by means of a CPA (that’s less expensive and faster). but, a few up to daters won’t require both audited or reviewed statements.

5. accumulate targeted records up to date Small enterprise mortgage application

if you want up to date achieve success in getting a small enterprise mortgage, you need upupdated be prepared updated offer unique facts and files about your business. it’s far critical up to date be organized and organized. right here is the kind of statistics that is often required, relying on the sort of mortgage:

name of enterprise (along with any DBAs)
Federal Tax identity
listing of executive officials and their up to dateupdated
legal shape (up-to-date LLC, S corporation, C organisation)
economic statements for the past 2-3 years and year-updated-date financials for the modern-day year (stability sheet, income and loss statements, cash drift statements, shareholder fairness)
Projected monetary statements (in order that the lender can get a sense of your expected future operations and coins flow)
state filings for the agency, up to dategether with a certificates of Incorporation, foreign organization filings, and trueupdated standing certificates
Copies of key man and trendy legal responsibility coverage policies
quantity of mortgage requested
business credit score document (including from a credit score reporting corporation like Dun & Bradstreet)
potential collateral up-to-date for the loan
financial statements of the predominant shareholder/proprieupupdated of the enterprise (especially in the case in which a private assure may be required)
business plan, government summary, or Invesupdatedr Pitch Deck of the business enterprise (see up-to-date Create a exquisite Invesup to dater Pitch Deck for Startup groups)
The tax returns of the organisation for the past 2-3 years (signed copies with all attachments and well-knownshows)
commercial enterprise financial institution statements
See also sixty five Questions task Capitalists Will Ask Startup businesses.

6. Be organized up to date Specify How plenty You want up-to-date Borrow and the expected Use of Proceeds from the loan

The lender will want up to date know how a lot investment you are looking for and how the loan proceeds could be used. Will the mortgage be for equipment or capital expenditures? enlargement or hiring? increase in up-to-date? more suitable income and advertising efforts? New research and development of generation? New product development? enlargement inup to date new centers or terriup-to-dateries?

you may want up to date borrow a upupdated greater if you run right into a coins crunch that lasts a month or two. up-to-date avoid going inup to date default underneath the loan.

7. decide What safety or assure may be furnished

A lender is in the main involved about the capability of the borrower up-to-date pay off the loan. To the volume that a security interest may be given up-to-date the lender on company assets (business enterprise equipment, property, debts receivable, and so forth.), the borrower shouldupdated be up to date increase its chances of getting a loan on favorable terms. some up to daters may additionally insist upon the non-public guarantee of the predominant up to daterupdated of the commercial enterprise. this is great averted if viable as it puts the up-to-date’s non-public assets, and now not just the enterprise property, at risk.

8. analyze the key phrases of the Proposed business loan

To make certain the proposed business loan makes experience in your business, you will want up to date the key terms proposed by means of a lender and evaluate them with phrases upupdated from alternative crediupupdated. right here are the important thing phrases up-to-date:

what’s the hobby price on the mortgage and how can it vary over the years? Many loans vary through the years relying on the triumphing “upupdated charge” or LIBOR.

How regularly is the interest payable (weekly or up to date)?

when is the major due or how is it amortized over the lifestyles of the mortgage? You need up-to-date be comfortable with the mixed hobby and fundamental bills from a cash waft angle

what is the mortgage origination fee?
What different charges or charges are imposed (along with underwriting expenses, management expenses, mortgage processing expenses, and so forth.)?
What working covenants are imposed up-to-date business (up-to-date a maximum debt-updated-fairness ratio or a minimum coins threshold held by using the organization)?
What are the occasions when the lender can name a default on the loan?

Is there any security or collateral required?

What periodic reports or monetary statements are required updated be furnished updated the lender?

Are there limits on how the loan proceeds may be used?

Can the mortgage be pay as you go early without a penalty? And if there is a penalty, is the penalty affordable?

9. evaluate Your on-line Profile and Postings

A small enterprise lender will carry out due diligence, which can include reviewing the statistics up-to-date on line about the commercial enterprise and its predominant up-to-date. So do the following review, up to dateupdated such due diligence to look in case you up to date make any modifications or deletions up-to-date on-line presence:

evaluation your corporation’s internet site. Is it 3177227fc5dac36e3e5ae6cd5820dcaa and professional looking?

review its presence on LinkedIn, facebook, Twitter, and different social media sites.
overview any Yelp reviews your commercial enterprise may have obtained.
evaluate the primary up-to-date’s postings on LinkedIn and different websites.

10. Get further educated at the Small commercial enterprise Lending method

The extra educated you’re approximately small business lending options and procedures, the more likely you may be successful in obtaining a loan.

End

Small commercial enterprise loans are up-to-date from many specific crediupupdated with a myriad of picks tailored up-to-date the economic state of affairs of your business. via watching for what these lendersupdated will evaluation and require, you significantly increase your probabilities of obtaining a useful small enterprise mortgage.

4 tips to increase your credit score fast

Most people don’t put much thought into their credit scores until the time comes to apply for a loan. If you expect to need financing in the next few months and aren’t convinced your credit score is high enough to get you approved, you’ll need to act quickly to improve your chances. Thankfully, there are several things you can do to boost your credit score in record time.

Understanding how credit scores are determined can help you improve yours. Here are the five factors credit bureaus use to assign credit scores to consumers:

Payment history (35%): Your payment history speaks to how responsible a borrower you are. It looks at your tendency to pay bills on time, as well as red flags such as having a bankruptcy filing on record.

Credit utilization ratio (30%): Your credit utilization ratio represents the percentage of available credit you’re using. A credit utilization ratio of 30% or less can help your credit score.

Length of credit history (15%): The length of your credit history can work in your favor, especially if you’ve paid your bills consistently over time. This is the one category where older consumers have an advantage over their younger counterparts, as someone with 10 years of timely payments might be a more ideal loan candidate than someone with only one year of accounts under his or her belt.

New credit accounts (10%): When you open too many new accounts simultaneously, it sends the message that you’re highly reliant on borrowing to keep up with your expenses. It’s generally better to open new accounts slowly over time, as opposed to opening a bunch all at once.

Credit mix (10%): Not all debts are created equal. Credit bureaus make a distinction between credit card accounts versus student loans, car loans, and mortgages.

As you can see, certain factors play a larger role than others in determining your score. That’s why it pays to focus on the first two categories — payment history and utilization — when taking steps to boost your credit.

With that in mind, here are four tips to help you improve your score quickly:

1. Pay off a chunk of your existing balance

Carrying a credit card balance won’t just cost you more money in interest payments; it’ll also drive up your credit utilization ratio. Say you have $5,000 in available credit along with a nagging $2,000 balance you’ve yet to pay off. Even if you don’t charge another dime on a credit card for the foreseeable future, as long as that $2,000 remains outstanding, your credit utilization ratio will be above that ideal 30% threshold. Paying off your existing debt, or at least a portion of it, is therefore one of the fastest ways to bring your score up.

If you don’t have the cash available to chip away at your balance (which tends to be the case for those who owe money on their credit cards), you might consider taking on a temporary side job or picking up some extra shifts through your current employer.

If that’s not an option, then take inventory at home and see if there’s anything you can sell for a quick profit. The sooner you bring down your credit utilization ratio, the quicker your score will climb.

2. Ask for an increase in your credit limit

Another way to improve your credit utilization ratio is to request a higher credit limit. If you’re a long-standing customer with a decent credit history, there’s a good chance your credit card issuer will comply. In fact, in a recent CreditCards.com survey, 89% of consumers got their credit limits increased simply by asking.

If appealing to your current credit card company doesn’t work, your next best bet is to try opening a new credit card. Though hard inquiries on your credit history, which occur when you apply for a new account, can temporarily ding your score, if your new card comes with a generous credit limit, it can more than compensate — especially since your credit utilization ratio carries more weight than most other categories when determining credit scores.

3. Correct credit report errors

A simple credit report error could wreak havoc on an otherwise respectable score. It’s estimated that 20% of credit reports contain errors, and if you spot one on yours, fixing it could give your score an immediate boost. According to the Federal Trade Commission, 20% of consumers who dispute credit report errors see their scores rise as a result, so it pays to review your credit report and make sure it’s completely accurate.

4. Become an authorized user on somebody else’s card

If opening a new credit card isn’t an option for you, you might try seeing if someone else will add you as an authorized user to an existing account. This can help in a number of ways. First, as long as the initial cardholder pays his or her bills responsibly, those on-time payments will beef up your record.

Additionally, the credit limit the card in question comes with will get added to your existing limit, which can help bring down your credit utilization ratio. Furthermore, you don’t actually need to use the card you’re issued to have it help your credit; you just have to choose the right person to partner up with.

Though building credit typically takes time, these moves can help give your score a more rapid boost.

That said, your credit score isn’t something you can set and forget, so once your number improves, be sure to maintain the good habits that helped it climb in the first place. Otherwise, you could end up right back where you started.

4 Mistakes That Can Kill Your Credit Score

Your credit score is important, often affecting areas of your life that range from where you live to how much you pay for auto insurance. More importantly, it usually determines whether or not you’re approved for credit, and could cost or save you thousands of dollars, as it’s often used to figure out how much you’ll pay in interest.

While building a great credit score is probably easier than you expect, it’s unfortunately also a lot easier to kill your credit health than it is to improve it. Consider your payment history for a moment – even if you made 50 consecutive payments on time, a single late payment could drop your score drastically and affect your credit health for years to come.

With these thoughts in mind, let’s go over a few key credit mistakes to avoid and some tips for keeping your credit in tiptop shape:

1. Maxing Out Credit Cards

Most people know that maxing out their credit cards isn’t the best for their overall finances because, well, it involves spending a lot of money. However, potential lenders also care about how much you’re charging to your card, as the more you spend, the more likely you’ll be unable to repay that debt. For this reason, your credit card utilization rate, calculated by dividing your total credit card balances by your total credit limits, typically has a high impact on your score.

Instead … try keeping your utilization rate between 1 and 20 percent. This will show lenders that you’re using credit, but don’t rely on it.

In order to lower your credit utilization, do whatever you can to keep your balances low. If this simply involves spending less money on frivolous purchases, great! Cutting out those impulse buys will simultaneously save you money and lower your utilization rate. However, if you’re using your cards to pay for purchases you really need and are still using up too much of your credit limit, try making payments more than once a month. Alternatively, you can pay for some of those necessities with cash. Lastly, if you haven’t received a credit limit increase in a while and have a good history with your creditor, it doesn’t hurt to proactively request an increase. Just be sure to ask whether this will result in a hard inquiry, so you can make an informed decision.

2. Making Late Payments

We touched on this earlier, but this factor is so important that we’ll bring it up again: Your on-time payment percentage could make or break your score. Lenders really want to see that you’re a reliable borrower who will repay debts in a timely manner. Consider this Credit Karma analysis: While consumers in the “excellent” scoring range (750 or higher) typically pay their bills on time 99.9 percent of the time, even the average consumer who falls into the “fair” range (640 to 699) has a respectable 99 percent on-time payment record. The numbers paint a stark picture – paying most of your bills on time isn’t good enough – just one or two late payments could have a drastic effect on your score.

Instead … get those payments in on time as often as you can. If you’re the forgetful type, set up a calendar reminder. Personally, I like to pay my bills whenever I get paid (twice a month). That way, I get payments in on a regular basis and know I have the money to back them up.

3. Applying For Tons of Credit

Simply put, racking up handfuls of hard inquiries by applying for lots of credit could make you look desperate for credit – a trait frowned upon by potential lenders. While one or two hard inquiries each year may not affect your score by much, a ton of hard inquiries can do some significant damage.

Instead … limit your applications, and try only applying for credit that you need. If you’re looking for the best auto or home loan rate, shop around over a short period of time – within 14 to 45 days. By applying for the same type of credit line each time during that period, some scoring models will recognize that you’re rate shopping and may combine those hard inquiries into just one.

4. Not Monitoring Your Credit

In a perfect world, you wouldn’t need to keep an eye on your credit – there wouldn’t be any data breaches to worry about, and you could trust all the lenders and bureaus to keep your information accurate. Sadly, this simply isn’t the case. With the Federal Trade Commission reporting that 1 in 5 consumers have errors on at least one of their three major credit reports, it’s clear that one of the biggest mistakes you can make is avoiding checking your credit regularly.

Instead … perform regular checkups on your credit (and finances in general). AnnualCreditReport.com allows you to get a free copy of your credit report from each of the three major credit bureaus every year and is a great resource to take advantage of. In addition, Credit Karma, Credit Sesame and Quizzle all allow you to regularly check your credit score for free. By using these educational sites to monitor your credit regularly, you can ensure your information remains error-free and your credit score accurately represents you.

The Bottom Line

You’ve worked hard to build a respectable credit score – the last thing you’d want is for a few mistakes to ruin your history for years to come. As you make financial decisions on a daily basis, keep these mistakes in mind, and do your best to avoid them. You won’t regret it!

4 Things You Can Change About Your Credit Card With a Phone Call

When it comes to your credit card, you have more power than you realize.

A simple phone call can potentially save you hundreds of dollars, improve your credit score, score you extra frequent flier miles and more – and your chances of success are higher than you’d imagine.
Most people never make that call, though. Maybe they’re too busy. Maybe they don’t know what to say. Maybe they don’t think it will matter.

It does matter – and people’s reluctance to make that call can cost them.

Of course, not everything can be fixed with a phone call. For example, if your payment is late for the fourth time in six months, don’t expect the bank to cut you any slack. But many things can be tweaked or improved if you take the time to call your card issuer.

Here are a few examples:

Late Payment Fee

A CreditCards.com survey last year showed that 86 percent of cardholders who asked to have a credit card late payment fee waived got their wish.

The problem is only 28 percent of cardholders have asked. While not everyone has been late with a payment, chances are lots of cardholders are paying those fines without knowing that a simple call could get them out of it.

Some card issuers – Discover being perhaps the most prominent among them – advertise that they won’t charge a late fee on your first late payment. Many other card issuers will waive the fee for some of their cardholders, but only if the cardholder asks.

A good record of on-time payment can help seal the deal. When you call, make sure the bank knows you’re rarely late and that it won’t happen again.

Interest Rates

That same survey also revealed about 2 in 3 cardholders who requested a lower interest rate got one, but just 23 percent had ever asked. Again, that means a large number of cardholders are missing out on a large amount of savings.

How big? Consider this:

  • If you have a $5,000 balance on a credit card with a 20 percent interest rate and pay $150 per month, you’ll pay $2,359 in interest before paying the card off over 50 months.
  • Lower that interest rate to 15 percent and keep everything else equal, you’ll pay $1,508 in interest in just 44 months. That’s a savings of $851!
Could you get your card issuer to lower your APR as much as 5 percent? Maybe or maybe not. But even lowering that APR to 18 percent – just a 2 percentage point drop – would save you about $375 in interest.
Credit Limit

An increased credit limit can do wonders for your credit score. That’s because it can quickly shrink your credit utilization ratio – how much debt you have compared to your available credit. For example, say you have $5,000 in available credit and $2,000 in debt. That means your credit utilization is 40 percent, well above the recommended goal of 30 percent or less. However, if you can increase your credit limit to $7,000, your utilization rate suddenly drops to an acceptable level of 29 percent. Your credit score is likely to improve as a result.

Be cautious, though. Don’t expect the bank to double your credit limit. You can likely improve your odds of success if the increase is a baby step rather than a giant leap.

One temporary downside: Your credit card issuer might do a hard pull of your credit when deciding whether to increase your limit. With any hard pull, you will likely see a small, temporary decrease in your credit score. However, the long-term benefit of the higher credit limit will likely outweigh any brief hit your credit might take.

Sign-up Bonuses

This is a move you’d need to make before you actually get the card, and you’ll need to do some homework to make this work.

Say you’ve received an offer in the mail from your bank for a card that you really like. The card comes with a low APR, no annual fee for the first year, no foreign transaction fees and a 20,000 point sign-up bonus. Sounds great, right? Yes, except for the fact that you’ve gone online and seen other offers of 40,000 or 50,000 points.

Well, if your credit is excellent, there’s a good chance that you can have those points. Just give your bank a call, tell them about the other great offers that you’ve seen and ask the bank to match the offer. Again, if you’ve got strong credit, you’ve got a good chance of success.

No Guarantee of Success

As mentioned, data has shown that cardholders are more likely to have their requests granted than they’d expect. But that doesn’t mean any of these are a slam dunk. The reality is that people with the best credit get the best treatment, the best rewards, the lowest APRs and the most fees waived.
Before you pick up the phone to talk to your bank, be sure you know where you stand with your credit. Get a free copy of your credit report from AnnualCreditReport.com, and dispute any errors or omissions you find. Get your FICO credit score. And of course, pay your bills on time, every time, in the weeks and months leading up to your request. These moves can help increase the chance that the next request you make will be a success.

Can credit repair really raise your score

Can credit repair really raise your score?

Credit repair firms make promises they can’t keep

In a recent Consumer Federation of America survey, more than half of all respondents thought credit repair firms were a legitimate way to improve a credit score. In reality, nothing could be further from the truth.

What these firms typically do — and this was very common last decade — is use a technique to temporarily raise your score by a significant number of points for just a few weeks before it plummets back down again. But the credit bureaus have gotten wise to this technique over the years.

Anyone who says they can magically eliminate bad items on your credit report is telling you a big lie. Keep your money in your own pocket and don’t give it to them for their supposed “services”! Better yet, use it to pay the debts you owe and that will improve your credit score on its own.

Know that there is no magic wand for credit repair. If you need help, get in touch with the National Foundation for Credit Counseling. But if you understand these basics and put them into practice in your life, your credit score will rise slowly but surely.

Raise your credit score with this knowledge

If you’re suffering from poor credit, there are several surefire ways to get your credit healthy again. Follow these tips and you’ll be well on your way:

  • Always pay your bills on time and pay down the total amount you owe.
    (accounts for 35 percent of your score)
    If you forget all else after reading this, remember this one! This is the single most important rule for having a good credit score.
  •  Keep a low credit utilization rate.
    (accounts for 30 percent of your score)
    Let’s say you have a credit card with a $10,000 limit. If you’re carrying a balance month-to-month of $3,000, you’re only using 30 percent of the total limit. But if your credit limit is suddenly dropped to $3,000, then suddenly you’re using 100 percent of what’s available to you. That’s yet another reason to always pay down credit card debt as quickly as possible. You always want to stay at credit utilization of 30 percent or less.
  • When you pay off a credit card, don’t close the account.
    (accounts for 15 percent of your score)
    Doing so only reduces your available credit and drives your score down. You want to have between four to six lines of credit. Be sure to use them twice a year — even if it’s just for a dollar store purchase — and pay them off right away. That will keep them active in your credit mix.

If you’re facing a huge new annual fee on a card that has a zero balance, try “leapfrogging.” That’s my term for using the 45-day window you have before any new terms of service go into effect to shop around. So once you get notice about a new annual fee, start looking around for other no-fee credit cards. Submit your application and once you get your new no-fee card, then go ahead and shut down the original one that wanted to spring a fee on you.

The remaining 20% of your credit score is comprised of what types of credit make up your credit mix (10%) and how much new credit you have in your life and how quickly you took it on (10%).

Here is How to Repair Your Bad Credit Report

Here is How to Repair Your Bad Credit Report

 

Bad credit reports comes with nightmares that nobody admires. If you choose to stick your head in sand and ignore your wake up call, it is totally fine and if you choose to overcome your fears and reclaim your credit standing, congratulations and here are a few tips for you.

I would say start with checking your credit standing but since you are reading this article, I am sure you´ve done your homework and assessed it and the results are not that amusing. So, let’s get to business

Step One: Request reports from several credit bureaus & companies

If you are in the United States, the Fair and Accurate Credit Transactions Act (FACTA) entitles you to a free credit report from leading credit bureaus in the country. It is also worthwhile to pick copies from the credit reporting companies. This is important because you do not know what has been submitted out there.

The basis of collecting reports from several companies is to have the different versions of the story.

Step Two: Carefully analyze your reports

Keep in mind that credit reports are not auto generated but are written and submitted by humans. This should give you the benefit of doubt that whatever is in that report is true or completely accurate.

Carefully go through your credit reports to make sure that the information in it is accurate and up to date. You should check out for address, types of accounts whether revolving, installment or join, collections, financial obligations records, consumer statements and credit inquiries.

These are the areas you should pay close attention too when examining your credit reports. It is often advisable that you audit your own credit report but I understand this can be boring to some people so if you feel you will not be able to read your credit reports to the end, I suggest you find somebody who can demystify the info into notable points you can easily suggest. Either way, ensure you are familiar with the content of your report.

Review your payments

Payments cover a larger percentage of your credit report since credit is all about borrowing and paying and since you only borrow for limited number of times, only repaying your debt remains to be everybody´s interest.

If there are missing payments, make sure to lodge a complaint with your credit company since a single missing payment can cause serious setback on your credit score.

However, be sure to talk to your lender before throwing turn trams. Sometimes the report must have just been hurried off or you may have made a payment too soon and you expect it to reflect on your report.

 Depth of credit

This is the length of time you´ve been using credit.

Older credit accounts are helpful when arguing your case out to correct your credit especially if it the older account was good or excellent.

You should carefully review your old credit account before closing it because it is your biggest bargaining chip

Recent credit accounts

New credit accounts are considered risk and they can lower your credit score in the first place. However, the consistent payment in the accounts will indicate responsibility and build your creditors confidence

Ensure that your recent credit accounts appear on your report- Although they may bear some degree of negative impact, the ultimate goal is to fix your credit and it will help a great deal.

Amount of Credit

It is hard for a credit company to post an inaccurate credit amount on your report. However, for revolving credits accounts, the amount carried forward may be inaccurate especially if you make irregular payments.

Step Three: Dispute all conflicting data

After carefully auditing your reports and noted down all conflicting data, it is time to lodge complains, the idea that complains may hurt your credit score is a misconception. Companies against any items of your credit report are never score and there is no way it will impact your score. If there is anything that will impact your credit score is failing to complain.

There are a number of ways to file complaints regarding your credit reports. One, you can call the number listed on your credit report and file your complain and two, you can file your complain online by visiting credit bureaus website.

It is not necessary to file complains with all credit bureaus as only one is enough. The credit reference bureau will forward your complain to your credit company and they will be required to reply within 30 days of the complaint. If they respond with corrections, the credit company is required to post the corrections to all bureaus they submitted the inaccurate report.

If you and your credit provider cannot resolve a dispute say have failed to reconcile a missing payment, you are allowed to attach a statement against the item on your report. For example, you may indicate ´I never missed any payment with company X´. This statement will be available for 2 years and is accessible to anybody who accessed your credit report-

Reference bureaus allow 30 days for credit companies to respond to complaints. If after 30 days not response id heard from your provider, the reference bureau will delete the inaccurate record and inform you and other bureaus. If after the correction you still feel some information is missing or inaccurate, you may have to visit your credit company in person and settle the deal personally.

For late payments, you may consider visiting your credit provider and explain yourself. These guys are humans like you and me and will consider going easy on you if you take the initiative to explain why you missed a payment or submitted your payment late.

Step Four: New report

Be sure to wait for 2 to 3 weeks before requesting for a new credit report after the corrections have been posted. In other cases, credit companies will acknowledge that the data is accurate but request more time to fix the discrepancy.

Purchasing credit score is also another option of seeing that your credit score improves. I hope these four steps to improving your credit score works with you. Remember, the best way to correct bad credit is avoiding one in the first place.

- See more at: http://www.elitepersonalfinance.com/here-is-how-to-repair-your-bad-credit-report/#sthash.KcC0bPsz.dpuf

Argument for a Risk Monitoring Policy

Argument for a Risk Monitoring Policy

Reviewing the credit report of new customers is a basic business practice that’s essential to limit your company’s risk of bad debt and write-offs.

If that’s the extent of your credit department’s risk management, however, your business is still vulnerable to preventable losses, and you may be missing out on revenue-generating opportunities as well.

A risk monitoring policy can help you identify customers who require credit reviews on a frequent basis so you can both protect your bottom line and grow your business.

Why Every Business Needs a Credit Risk Monitoring Policy

Vetting new customers and setting terms is only part the equation when it comes to mitigating risk. Performing regular reviews of customer payment history and reevaluating the credit terms you’ve extended is equally important.

In the day-to-day operations of a business, changes that can impact creditworthiness take place continuously. A well-developed risk management strategy not only protects and creates value; it also addresses and relieves uncertainty and allows your business to continually improve.

The Aim of a Risk Monitoring Policy

A well-defined risk monitoring policy should outline the steps necessary to assess which customers should be reviewed more often.

To provide you with the framework to spot changes in customer behavior that warrant a change in review status, your risk monitoring policy should be integrated into all of your credit management processes, and it must be tailored to your company’s unique requirements.

A systematic, timely, inclusive and transparent risk monitoring policy will accurately evaluate customer stability, as well as a customer’s ability to pay for the goods or services you provide.

A well-designed policy that’s both iterative and dynamic takes human and cultural factors into account. In order to allow you to identify those customers who need more frequent reviews, it must be based on fresh, reliable credit data and intelligence.

How to Develop a Risk Monitoring Policy

To be effective, risk monitoring needs to zero in on both negative and positive changes. If positive changes in a customer’s financial situation aren’t noticed, your business can miss out on opportunities to improve your relationship or increase sales.

If negative changes in a customer’s behavior or circumstances are overlooked, your risk of not receiving payment for the goods or services you’re supplying increases.

In order to determine when to perform customer credit reviews and how in depth they need to be, divide your A/R accounts into groups based on history and perceived risk. For example, your A/R portfolio could be divided up into groups of:

  • Larger accounts that potentially represent the greatest financial loss and need to be monitored closely year-round
  • Long-term customers who’ve always paid on time and have a spotless business credit report who only need an annual review
  • New customers who are reviewed quarterly until they’ve shown they’re reliable payers
  • Customers with any history of late payments who are evaluated monthly or even weekly
  • Customers who you’ve put on prepayments or C.O.D. terms who are reviewed monthly or quarterly to determine if they qualify for terms

The assessment policy you develop should allow ample flexibility so groups can evolve to meet the changing needs of your business.

Reliable Credit Information Plays a Crucial Role in Risk Monitoring

Up-to-date credit intelligence and analysis tools are critical for successfully implementing a risk monitoring strategy.

When you’re looking for a resource to supply credit information, consider the following factors:

  • Integrity of the data - Is it validated?
  • Breadth and depth of the data - Does it come from a variety of sources?
  • Technology - Does the provider use the latest technology and tools?

At safe consulting services, our goal is to provide accurate, real-time business credit data and cutting-edge tools that make it easy to assess and monitor risk. Contact us today to learn more about our innovative products.

How to Audit and Rebuild a Dated Credit Risk Policy

How to Audit and Rebuild a Dated Credit Risk Policy

A credit risk policy sets forth standards, procedures, and definitions that guide the credit decisions made by a company, with the overall goal of mitigating credit risks.

As market conditions evolve and the financial situations of credit customers change, your existing credit policies may become out of date and inapplicable to evaluating new credit customers and modifying the terms governing existing ones.

By using reliable credit indicators, such as business credit reports and other financial data, you can revise and rebuild a credit risk policy to maintain low risk for your company while providing customers with the credit terms they need. Here are some ways to ensure a dated credit risk policy is up to date.

If you believe that a current credit risk policy is no longer valid, a careful audit of the policy will give you a foundation from which to make changes and revisions. With the assistance of credit managers and financial experts, plus data from business credit reports and other sources, assistance is available to assess how current credit risk policies are affecting your company.

If you believe that you are taking on too much credit risk, or that the evaluation procedures are not accurately identifying both good and bad credit customers, you can proceed to a detailed evaluation of your credit risk policy.

Look at elements of your credit risk policy and how you currently handle factors such as:

  • Application requirements.
  • Credit review policies and sources.
  • Approval procedures.
  • Credit limits.
  • Prefunding, collateral, or down payment requirements.
  • Characteristics of responsible parties.
  • Financial and market conditions, both general and in specific industries.
  • The role of business credit reports, references from other companies, or other credit data in your decisions.
  • Signs of increasing or deteriorating credit worthiness.
  • Procedures for increasing or decreasing credit limits.

When you have this information available, you can use it to rebuild your out-of-date credit policy. For example, if you know that a specific industry or business segment is experiencing difficulties, you may need to impose more stringent credit requirements for companies in that industry.

If your current sources for credit data and business credit reports are insufficient, you will know that you need to expand your acquisition of credit data to other credit reporting agencies and financial companies.

You may use a procedure such as the following for reevaluating and reestablishing a customer’s credit standing (dollar amounts listed are for example only; your specific dollar limits may be higher or lower):

  • Establish a threshold dollar amount for reevaluation of customer cre dit. For example, you may set an AR threshold of $200,000 for each customer.
  • For customers with an AR threshold above $200,000, you may want to reevaluate their credit terms every month without taking action. Contact them every three months. Set new credit limits every four months based on the date you’ve collected over that same period.
  • For customers with an AR below $200,000, you may feel comfortable establishing longer periods for reevaluation and resetting of limits. For example, you may reevaluate credit terms every four months and contact them every six months. New credit terms could be set up every eight months, as needed.

When you assess a customer’s current credit worthiness, pay particular attention to factors such as:

  • Credit history: Past credit behavior that indicates level of ability and willingness to repay.
  • Company financial status: Customer company’s debt burden, income, assets, and other indicators of financial stability.
  • Credit limit: How much credit you are willing to extend to the customer.
  • Frequency of credit use: How often, and to what extent, a customer uses credit.

Ansonia Credit Data’s in-depth business credit reports and associated data give credit managers the data they need to make informed credit decisions and establish workable, mutually beneficial credit risk policies. Contact safe consulting services today for more information on our detailed, reasonably priced business credit reports and how they can help you when making financial decisions for your company.

Health Insurance Portability and Accountability Act

Health Insurance Portability and Accountability Act

Introduction

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 Public Law 104-191 104th Congress An Act AUG. 21, 1996 To amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.–This Act may be cited as the “Health Insurance Portability and Accountability Act of 1996″. (b) TABLE OF CONTENTS.–The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I–HEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY … TITLE II–PREVENTING HEALTH CARE FRAUD AND ABUSE; ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM … Subtitle F–Administrative Simplification Sec. 261. Purpose. Sec. 262. Administrative simplification. Part C–Administrative Simplification Sec. 1171. Definitions. Sec. 1172. General requirements for adoption of standards. Sec. 1173. Standards for information transactions and data elements. Sec. 1174. Timetables for adoption of standards. Sec. 1175. Requirements. Sec. 1176. General penalty for failure to comply with requirements and standards. Sec. 1177. Wrongful disclosure of individually identifiable health information. Sec. 1178. Effect on State law. Sec. 1179. Processing payment transactions.”. Sec. 263. Changes in membership and duties of National Committee on Vital and Health Statistics. Sec. 264. Recommendations with respect to privacy of certain health information.

SEC. 261. PURPOSE.

Subtitle F–Administrative Simplification It is the purpose of this subtitle to improve the Medicare program under title XVIII of the Social Security Act, the medicaid program under title XIX of such Act, and the efficiency and effectiveness of the health care system, by encouraging the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information.

SEC. 262. ADMINISTRATIVE SIMPLIFICATION.

(a) IN GENERAL.–Title XI (42 U.S.C. 1301 et seq.) is amended by adding at the end the following: PART C–ADMINISTRATIVE SIMPLIFICATION DEFINITIONS SEC. 1171. For purposes of this part: (1) CODE SET.–The term ‘code set’ means any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnostic codes, or medical procedure codes. (2) HEALTH CARE CLEARINGHOUSE.–The term ‘health care clearinghouse’ means a public or private entity that processes or facilitates the processing of nonstandard data elements of health information into standard data elements. (3) HEALTH CARE PROVIDER.–The term ‘health care provider’ includes a provider of services (as defined in section 1861(u)), a provider of medical or other health services (as defined in section 1861(s)), and any other person furnishing health care services or supplies. (4) HEALTH INFORMATION.–The term ‘health information’ means any information, whether oral or recorded in any form or medium, that– (A) is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual. (5) HEALTH PLAN.–The term ‘health plan’ means an individual or group plan that provides, or pays the cost of, medical care (as such term is defined in section 2791 of the Public Health Service Act). Such term includes the following, and any combination thereof: (A) A group health plan (as defined in section 2791(a) of the Public Health Service Act), but only if the plan– (i) has 50 or more participants (as defined in section 3(7) of the Employee Retirement Income Security Act of 1974); or (ii) is administered by an entity other than the employer who established and maintains the plan. (B) A health insurance issuer (as defined in section 2791(b) of the Public Health Service Act). (C) A health maintenance organization (as defined in section 2791(b) of the Public Health Service Act). (D) Part A or part B of the Medicare program under title XVIII. (E) The medicaid program under title XIX. (F) A Medicare supplemental policy (as defined in section 1882(g)(1)). (G) A long-term care policy, including a nursing home fixed indemnity policy (unless the Secretary determines that such a policy does not provide sufficiently comprehensive coverage of a benefit so that the policy should be treated as a health plan). (H) An employee welfare benefit plan or any other arrangement which is established or maintained for the purpose of offering or providing health benefits to the employees of 2 or more employers. (I) The health care program for active military personnel under title 10, United States Code. (J) The veterans health care program under chapter 17 of title 38, United States Code. (K) The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), as defined in section 1072(4) of title 10, United States Code. (L) The Indian health service program under the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.). (M) The Federal Employees Health Benefit Plan under chapter 89 of title 5, United States Code. (6) INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.–The term ‘individually identifiable health information’ means any information, including demographic information collected from an individual, that– (A) is created or received by a health care provider, health plan, employer, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual, and– (i) identifies the individual; or (ii) with respect to which there is a reasonable basis to believe that the information can be used to identify the individual. (7) STANDARD.–The term ‘standard’, when used with reference to a data element of health information or a transaction referred to in section 1173(a)(1), means any such data element or transaction that meets each of the standards and implementation specifications adopted or established by the Secretary with respect to the data element or transaction under sections 1172 through 1174. (8) STANDARD SETTING ORGANIZATION.–The term ‘standard setting organization’ means a standard setting organization accredited by the American National Standards Institute, including the National Council for Prescription Drug Programs, that develops standards for information transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this part. GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS

Sec. 1171. DEFINITIONS.

DEFINITIONS SEC. 1171. For purposes of this part: (1) CODE SET.–The term ‘code set’ means any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnostic codes, or medical procedure codes. (2) HEALTH CARE CLEARINGHOUSE.–The term ‘health care clearinghouse’ means a public or private entity that processes or facilitates the processing of nonstandard data elements of health information into standard data elements. (3) HEALTH CARE PROVIDER.–The term ‘health care provider’ includes a provider of services (as defined in section 1861(u)), a provider of medical or other health services (as defined in section 1861(s)), and any other person furnishing health care services or supplies. (4) HEALTH INFORMATION.–The term ‘health information’ means any information, whether oral or recorded in any form or medium, that– (A) is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual. (5) HEALTH PLAN.–The term ‘health plan’ means an individual or group plan that provides, or pays the cost of, medical care (as such term is defined in section 2791 of the Public Health Service Act). Such term includes the following, and any combination thereof: (A) A group health plan (as defined in section 2791(a) of the Public Health Service Act), but only if the plan– (i) has 50 or more participants (as defined in section 3(7) of the Employee Retirement Income Security Act of 1974); or (ii) is administered by an entity other than the employer who established and maintains the plan. (B) A health insurance issuer (as defined in section 2791(b) of the Public Health Service Act). (C) A health maintenance organization (as defined in section 2791(b) of the Public Health Service Act). (D) Part A or part B of the Medicare program under title XVIII. (E) The medicaid program under title XIX. (F) A Medicare supplemental policy (as defined in section 1882(g)(1)). (G) A long-term care policy, including a nursing home fixed indemnity policy (unless the Secretary determines that such a policy does not provide sufficiently comprehensive coverage of a benefit so that the policy should be treated as a health plan). (H) An employee welfare benefit plan or any other arrangement which is established or maintained for the purpose of offering or providing health benefits to the employees of 2 or more employers. (I) The health care program for active military personnel under title 10, United States Code. (J) The veterans health care program under chapter 17 of title 38, United States Code. (K) The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), as defined in section 1072(4) of title 10, United States Code. (L) The Indian health service program under the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.). (M) The Federal Employees Health Benefit Plan under chapter 89 of title 5, United States Code. (6) INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION.–The term ‘individually identifiable health information’ means any information, including demographic information collected from an individual, that– (A) is created or received by a health care provider, health plan, employer, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual, and– (i) identifies the individual; or (ii) with respect to which there is a reasonable basis to believe that the information can be used to identify the individual. (7) STANDARD.–The term ‘standard’, when used with reference to a data element of health information or a transaction referred to in section 1173(a)(1), means any such data element or transaction that meets each of the standards and implementation specifications adopted or established by the Secretary with respect to the data element or transaction under sections 1172 through 1174. (8) STANDARD SETTING ORGANIZATION.–The term ‘standard setting organization’ means a standard setting organization accredited by the American National Standards Institute, including the National Council for Prescription Drug Programs, that develops standards for information transactions, data elements, or any other standard that is necessary to, or will facilitate, the implementation of this part. GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS

SEC. 1172. GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS

(a) APPLICABILITY.–Any standard adopted under this part shall apply, in whole or in part, to the following persons: (1) A health plan. (2) A health care clearinghouse. (3) A health care provider who transmits any health information in electronic form in connection with a transaction referred to in section 1173(a)(1). (b) REDUCTION OF COSTS.–Any standard adopted under this part shall be consistent with the objective of reducing the administrative costs of providing and paying for health care. (c) ROLE OF STANDARD SETTING ORGANIZATIONS.– (1) IN GENERAL.–Except as provided in paragraph (2), any standard adopted under this part shall be a standard that has been developed, adopted, or modified by a standard setting organization. (2) SPECIAL RULES.– (A) DIFFERENT STANDARDS.–The Secretary may adopt a standard that is different from any standard developed, adopted, or modified by a standard setting organization, if– (i) the different standard will substantially reduce administrative costs to health care providers and health plans compared to the alternatives; and “(ii) the standard is promulgated in accordance with the rulemaking procedures of subchapter III of chapter 5 of title 5, United States Code. “(B) NO STANDARD BY STANDARD SETTING ORGANIZATION.–If no standard setting organization has developed, adopted, or modified any standard relating to a standard that the Secretary is authorized or required to adopt under this part– “(i) paragraph (1) shall not apply; and “(ii) subsection (f) shall apply. (3) CONSULTATION REQUIREMENT.– (A) IN GENERAL.–A standard may not be adopted under this part unless– (i) in the case of a standard that has been developed, adopted, or modified by a standard setting organization, the organization consulted with each of the organizations described in subparagraph (B) in the course of such development, adoption, or modification; and (ii) in the case of any other standard, the Secretary, in complying with the requirements of subsection (f), consulted with each of the organizations described in subparagraph (B) before adopting the standard. (B) ORGANIZATIONS DESCRIBED.–The organizations referred to in subparagraph (A) are the following: (i) The National Uniform Billing Committee. (ii) The National Uniform Claim Committee. (iii) The Workgroup for Electronic Data Interchange. (iv) The American Dental Association. (d) IMPLEMENTATION SPECIFICATIONS.–The Secretary shall establish specifications for implementing each of the standards adopted under this part. (e) PROTECTION OF TRADE SECRETS.–Except as otherwise required by law, a standard adopted under this part shall not require disclosure of trade secrets or confidential commercial information by a person required to comply with this part. (f) ASSISTANCE TO THE SECRETARY.–In complying with the requirements of this part, the Secretary shall rely on the recommendations of the National Committee on Vital and Health Statistics established under section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)), and shall consult with appropriate Federal and State agencies and private organizations. The Secretary shall publish in the Federal Register any recommendation of the National Committee on Vital and Health Statistics regarding the adoption of a standard under this part. (g) APPLICATION TO MODIFICATIONS OF STANDARDS.–This section shall apply to a modification to a standard (including an addition to a standard) adopted under section 1174(b) in the same manner as it applies to an initial standard adopted under section 1174(a).

SEC. 1173. STANDARDS FOR INFORMATION TRANSACTIONS AND DATA ELEMENTS

(a) STANDARDS TO ENABLE ELECTRONIC EXCHANGE.– (1) IN GENERAL.–The Secretary shall adopt standards for transactions, and data elements for such transactions, to enable health information to be exchanged electronically, that are appropriate for– (A) the financial and administrative transactions described in paragraph (2); and (B) other financial and administrative transactions determined appropriate by the Secretary, consistent with the goals of improving the operation of the health care system and reducing administrative costs. (2) TRANSACTIONS.–The transactions referred to in paragraph (1)(A) are transactions with respect to the following: (A) Health claims or equivalent encounter information. (B) Health claims attachments. (C) Enrollment and disenrollment in a health plan. (D) Eligibility for a health plan. (E) Health care payment and remittance advice. (F) Health plan premium payments. (G) First report of injury. (H) Health claim status. (I) Referral certification and authorization. (3) ACCOMMODATION OF SPECIFIC PROVIDERS.–The standards adopted by the Secretary under paragraph (1) shall accommodate the needs of different types of health care providers. (b) UNIQUE HEALTH IDENTIFIERS.– (1) IN GENERAL.–The Secretary shall adopt standards providing for a standard unique health identifier for each individual, employer, health plan, and health care provider for use in the health care system. In carrying out the preceding sentence for each health plan and health care provider, the Secretary shall take into account multiple uses for identifiers and multiple locations and specialty classifications for health care providers. (2) USE OF IDENTIFIERS.–The standards adopted under paragraph (1) shall specify the purposes for which a unique health identifier may be used. (c) CODE SETS.– (1) IN GENERAL.–The Secretary shall adopt standards that– (A) select code sets for appropriate data elements for the transactions referred to in subsection (a)(1) from among the code sets that have been developed by private and public entities; or (B) establish code sets for such data elements if no code sets for the data elements have been developed. (2) DISTRIBUTION.–The Secretary shall establish efficient and low-cost procedures for distribution (including electronic distribution) of code sets and modifications made to such code sets under section 1174(b). (d) SECURITY STANDARDS FOR HEALTH INFORMATION.– (1) SECURITY STANDARDS.–The Secretary shall adopt security standards that– (A) take into account– (i) the technical capabilities of record systems used to maintain health information; (ii) the costs of security measures; (iii) the need for training persons who have access to health information; (iv) the value of audit trails in computerized record systems; and (v) the needs and capabilities of small health care providers and rural health care providers (as such providers are defined by the Secretary); and (B) ensure that a health care clearinghouse, if it is part of a larger organization, has policies and security procedures which isolate the activities of the health care clearinghouse with respect to processing information in a manner that prevents unauthorized access to such information by such larger organization.” (2) SAFEGUARDS.–Each person described in section 1172(a) who maintains or transmits health information shall maintain reasonable and appropriate administrative, technical, and physical safeguards– (A) to ensure the integrity and confidentiality of the information; (B) to protect against any reasonably anticipated– (i) threats or hazards to the security or integrity of the information; and (ii) unauthorized uses or disclosures of the information; and (C) otherwise to ensure compliance with this part by the officers and employees of such person. (e) ELECTRONIC SIGNATURE.– (1) STANDARDS.–The Secretary, in coordination with the Secretary of Commerce, shall adopt standards specifying procedures for the electronic transmission and authentication of signatures with respect to the transactions referred to in subsection (a)(1). (2) EFFECT OF COMPLIANCE.–Compliance with the standards adopted under paragraph (1) shall be deemed to satisfy Federal and State statutory requirements for written signatures with respect to the transactions referred to in subsection (a)(1). (f) TRANSFER OF INFORMATION AMONG HEALTH PLANS.–The Secretary shall adopt standards for transferring among health plans appropriate standard data elements needed for the coordination of benefits, the sequential processing of claims, and other data elements for individuals who have more than one health plan.

SEC. 1174. TIMETABLES FOR ADOPTION OF STANDARDS

(a) INITIAL STANDARDS.–The Secretary shall carry out section 1173 not later than 18 months after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, except that standards relating to claims attachments shall be adopted not later than 30 months after such date. (b) ADDITIONS AND MODIFICATIONS TO STANDARDS.– (1) IN GENERAL.–Except as provided in paragraph (2), the Secretary shall review the standards adopted under section 1173, and shall adopt modifications to the standards (including additions to the standards), as determined appropriate, but not more frequently than once every 12 months. Any addition or modification to a standard shall be completed in a manner which minimizes the disruption and cost of compliance. (2) SPECIAL RULES.– (A) FIRST 12-MONTH PERIOD.–Except with respect to additions and modifications to code sets under subparagraph (B), the Secretary may not adopt any modification to a standard adopted under this part during the 12-month period beginning on the date the standard is initially adopted, unless the Secretary determines that the modification is necessary in order to permit compliance with the standard.” (B) ADDITIONS AND MODIFICATIONS TO CODE SETS.– (i) IN GENERAL.–The Secretary shall ensure that procedures exist for the routine maintenance, testing, enhancement, and expansion of code sets. (ii) Additional rules.–If a code set is modified under this subsection, the modified code set shall include instructions on how data elements of health information that were encoded prior to the modification may be converted or translated so as to preserve the informational value of the data elements that existed before the modification. Any modification to a code set under this subsection shall be implemented in a manner that minimizes the disruption and cost of complying with such modification.

SEC. 1175. REQUIREMENTS

(a) CONDUCT OF TRANSACTIONS BY PLANS.– (1) IN GENERAL.–If a person desires to conduct a transaction referred to in section 1173(a)(1) with a health plan as a standard transaction– (A) the health plan may not refuse to conduct such transaction as a standard transaction; (B) the insurance plan may not delay such transaction, or otherwise adversely affect, or attempt to adversely affect, the person or the transaction on the ground that the transaction is a standard transaction; and (C) the information transmitted and received in connection with the transaction shall be in the form of standard data elements of health information. (2) SATISFACTION OF REQUIREMENTS.–A health plan may satisfy the requirements under paragraph (1) by– (A) directly transmitting and receiving standard data elements of health information; or (B) submitting nonstandard data elements to a health care clearinghouse for processing into standard data elements and transmission by the health care clearinghouse, and receiving standard data elements through the health care clearinghouse. (3) TIMETABLE FOR COMPLIANCE.–Paragraph (1) shall not be construed to require a health plan to comply with any standard, implementation specification, or modification to a standard or specification adopted or established by the Secretary under sections 1172 through 1174 at any time prior to the date on which the plan is required to comply with the standard or specification under subsection (b). (b) COMPLIANCE WITH STANDARDS.– (1) INITIAL COMPLIANCE.– (A) IN GENERAL.–Not later than 24 months after the date on which an initial standard or implementation specification is adopted or established under sections 1172 and 1173, each person to whom the standard or implementation specification applies shall comply with the standard or specification. (B) SPECIAL RULE FOR SMALL HEALTH PLANS.–In the case of a small health plan, paragraph (1) shall be applied by substituting ’36 months’ for ’24 months’. For purposes of this subsection, the Secretary shall determine the plans that qualify as small health plans. (2) COMPLIANCE WITH MODIFIED STANDARDS.–If the Secretary adopts a modification to a standard or implementation specification under this part, each person to whom the standard or implementation specification applies shall comply with the modified standard or implementation specification at such time as the Secretary determines appropriate, taking into account the time needed to comply due to the nature and extent of the modification. The time determined appropriate under the preceding sentence may not be earlier than the last day of the 180-day period beginning on the date such modification is adopted. The Secretary may extend the time for compliance for small health plans, if the Secretary determines that such extension is appropriate. (3) CONSTRUCTION.–Nothing in this subsection shall be construed to prohibit any person from complying with a standard or specification by– (A) submitting nonstandard data elements to a health care clearinghouse for processing into standard data elements and transmission by the health care clearinghouse; or (B) receiving standard data elements through a health care clearinghouse.

SEC. 1176. GENERAL PENALTY FOR FAILURE TO COMPLY WITH REQUIREMENTS AND STANDARDS

(a) GENERAL PENALTY.– (1) IN GENERAL.–Except as provided in subsection (b), the Secretary shall impose on any person who violates a provision of this part a penalty of not more than $100 for each such violation, except that the total amount imposed on the person for all violations of an identical requirement or prohibition during a calendar year may not exceed $25,000. (2) PROCEDURES.–The provisions of section 1128A (other than subsections (a) and (b) and the second sentence of subsection (f)) shall apply to the imposition of a civil money penalty under this subsection in the same manner as such provisions apply to the imposition of a penalty under such section 1128A. (b) LIMITATIONS.– (1) OFFENSES OTHERWISE PUNISHABLE.–A penalty may not be imposed under subsection (a) with respect to an act if the act constitutes an offense punishable under section 1177. (2) NONCOMPLIANCE NOT DISCOVERED.–A penalty may not be imposed under subsection (a) with respect to a provision of this part if it is established to the satisfaction of the Secretary that the person liable for the penalty did not know, and by exercising reasonable diligence would not have known, that such person violated the provision. (3) FAILURES DUE TO REASONABLE CAUSE.– (A) IN GENERAL.–Except as provided in subparagraph (B), a penalty may not be imposed under subsection (a) if– (i) the failure to comply was due to reasonable cause and not to willful neglect; and (ii) the failure to comply is corrected during the 30-day period beginning on the first date the person liable for the penalty knew, or by exercising reasonable diligence would have known, that the failure to comply occurred. (B) EXTENSION OF PERIOD.– (i) NO PENALTY.–The period referred to in subparagraph (A)(ii) may be extended as determined appropriate by the Secretary based on the nature and extent of the failure to comply. (ii) ASSISTANCE.–If the Secretary determines that a person failed to comply because the person was unable to comply, the Secretary may provide technical assistance to the person during the period described in subparagraph (A)(ii). Such assistance shall be provided in any manner determined appropriate by the Secretary. (4) REDUCTION.–In the case of a failure to comply which is due to reasonable cause and not to willful neglect, any penalty under subsection (a) that is not entirely waived under paragraph (3) may be waived to the extent that the payment of such penalty would be excessive relative to the compliance failure involved.

SEC. 1177. WRONGFUL DISCLOSURE OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION

(a) OFFENSE.–A person who knowingly and in violation of this part– (1) uses or causes to be used a unique health identifier;” (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person, shall be punished as provided in subsection (b). (b) PENALTIES.–A person described in subsection (a) shall– (1) be fined not more than $50,000, imprisoned not more than 1 year, or both; (2) if the offense is committed under false pretenses, be fined not more than $100,000, imprisoned not more than 5 years, or both; and (3) if the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, be fined not more than $250,000, imprisoned not more than 10 years, or both.

SEC. 1178. EFFECT ON STATE LAW

(a) GENERAL EFFECT.– (1) GENERAL RULE.–Except as provided in paragraph (2), a provision or requirement under this part, or a standard or implementation specification adopted or established under sections 1172 through 1174, shall supersede any contrary provision of State law, including a provision of State law that requires medical or health plan records (including billing information) to be maintained or transmitted in written rather than electronic form. (2) EXCEPTIONS.–A provision or requirement under this part, or a standard or implementation specification adopted or established under sections 1172 through 1174, shall not supersede a contrary provision of State law, if the provision of State law– (A) is a provision the Secretary determines– (i) is necessary– (I) to prevent fraud and abuse; (II) to ensure appropriate State regulation of insurance and health plans; (III) for State reporting on health care delivery or costs; or (IV) for other purposes; or (ii) addresses controlled substances; or (B) subject to section 264(c)(2) of the Health Insurance Portability and Accountability Act of 1996, relates to the privacy of individually identifiable health information. (b) PUBLIC HEALTH.–Nothing in this part shall be construed to invalidate or limit the authority, power, or procedures established under any law providing for the reporting of disease or injury, child abuse, birth, or death, public health surveillance, or public health investigation or intervention. (c) STATE REGULATORY REPORTING.–Nothing in this part shall limit the ability of a State to require a health plan to report, or to provide access to, information for management audits, financial audits, program monitoring and evaluation, facility licensure or certification, or individual licensure or certification.

EC. 1179. PROCESSING PAYMENT TRANSACTIONS BY FINANCIAL INSTITUTIONS

To the extent that an entity is engaged in activities of a financial institution (as defined in section 1101 of the Right to Financial Privacy Act of 1978), or is engaged in authorizing, processing, clearing, settling, billing, transferring, reconciling, or collecting payments, for a financial institution, this part, and any standard adopted under this part, shall not apply to the entity with respect to such activities, including the following: (1) The use or disclosure of information by the entity for authorizing, processing, clearing, settling, billing, transferring, reconciling or collecting, a payment for, or related to, health plan premiums or health care, where such payment is made by any means, including a credit, debit, or other payment card, an account, check, or electronic funds transfer. (2) The request for, or the use or disclosure of, information by the entity with respect to a payment described in paragraph (1)– (A) for transferring receivables; (B) for auditing; (C) in connection with– (i) a customer dispute; or (ii) an inquiry from, or to, a customer; (D) in a communication to a customer of the entity regarding the customer’s transactions, payment card, account, check, or electronic funds transfer; (E) for reporting to consumer reporting agencies; or (F) for complying with– (i) a civil or criminal subpoena; or (ii) a Federal or State law regulating the entity.”. (b) CONFORMING AMENDMENTS.– (1) REQUIREMENT FOR MEDICARE PROVIDERS.–Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended– (A) by striking “and” at the end of subparagraph (P); (B) by striking the period at the end of subparagraph (Q) and inserting “; and”; and (C) by inserting immediately after subparagraph (Q) the following new subparagraph: (R) to contract only with a health care clearinghouse (as defined in section 1171) that meets each standard and implementation specification adopted or established under part C of title XI on or after the date on which the health care clearinghouse is required to comply with the standard or specification.”. (2) TITLE HEADING.–Title XI (42 U.S.C. 1301 et seq.) is amended by striking the title heading and inserting the following: “TITLE XI–GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION”.

SEC. 263. CHANGES IN MEMBERSHIP AND DUTIES OF NATIONAL COMMITTEE ON VITAL AND HEALTH STATISTICS.

Section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)) is amended– (1) in paragraph (1), by striking “16″ and inserting “18″; (2) by amending paragraph (2) to read as follows: (2) The members of the Committee shall be appointed from among persons who have distinguished themselves in the fields of health statistics, electronic interchange of health care information, privacy and security of electronic information, population-based public health, purchasing or financing health care services, integrated computerized health information systems, health services research, consumer interests in health information, health data standards, epidemiology, and the provision of health services. Members of the Committee shall be appointed for terms of 4 years.”; (3) by redesignating paragraphs (3) through (5) as paragraphs (4) through (6), respectively, and inserting after paragraph (2) the following: (3) Of the members of the Committee– (A) 1 shall be appointed, not later than 60 days after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, by the Speaker of the House of Representatives after consultation with the Minority Leader of the House of Representatives; (B) 1 shall be appointed, not later than 60 days after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, by the President pro tempore of the Senate after consultation with the Minority Leader of the Senate; and (C) 16 shall be appointed by the Secretary.”; (4) by amending paragraph (5) (as so redesignated) to read as follows: (5) The Committee– (A) shall assist and advise the Secretary– (i) to delineate statistical problems bearing on health and health services which are of national or international interest; (ii) to stimulate studies of such problems by other organizations and agencies whenever possible or to make investigations of such problems through subcommittees; (iii) to determine, approve, and revise the terms, definitions, classifications, and guidelines for assessing health status and health services, their distribution and costs, for use (I) within the Department of Health and Human Services, (II) by all programs administered or funded by the Secretary, including the Federal-State-local cooperative health statistics system referred to in subsection (e), and (III) to the extent possible as determined by the head of the agency involved, by the Department of Veterans Affairs, the Department of Defense, and other Federal agencies concerned with health and health services; (iv) with respect to the design of and approval of health statistical and health information systems concerned with the collection, processing, and tabulation of health statistics within the Department of Health and Human Services, with respect to the Cooperative Health Statistics System established under subsection (e), and with respect to the standardized means for the collection of health information and statistics to be established by the Secretary under subsection (j)(1); (v) to review and comment on findings and proposals developed by other organizations and agencies and to make recommendations for their adoption or implementation by local, State, national, or international agencies; (vi) to cooperate with national committees of other countries and with the World Health Organization and other national agencies in the studies of problems of mutual interest; (vii) to issue an annual report on the state of the Nation’s health, its health services, their costs and distributions, and to make proposals for improvement of the Nation’s health statistics and health information systems; and (viii) in complying with the requirements imposed on the Secretary under part C of title XI of the Social Security Act; (B) shall study the issues related to the adoption of uniform data standards for patient medical record information and the electronic exchange of such information; (C) shall report to the Secretary not later than 4 years after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996 recommendations and legislative proposals for such standards and electronic exchange; and (D) shall be responsible generally for advising the Secretary and the Congress on the status of the implementation of part C of title XI of the Social Security Act.”; and (5) by adding at the end the following: (7) Not later than 1 year after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, and annually thereafter, the Committee shall submit to the Congress, and make public, a report regarding the implementation of part C of title XI of the Social Security Act. Such report shall address the following subjects, to the extent that the Committee determines appropriate: (A) The extent to which persons required to comply with part C of title XI of the Social Security Act are cooperating in implementing the standards adopted under such part. (B) The extent to which such entities are meeting the security standards adopted under such part and the types of penalties assessed for noncompliance with such standards. (C) Whether the Federal and State Governments are receiving information of sufficient quality to meet their responsibilities under such part. (D) Any problems that exist with respect to implementation of such part. (E) The extent to which timetables under such part are being met.”.

SEC. 264. RECOMMENDATIONS WITH RESPECT TO PRIVACY OF CERTAIN HEALTH INFORMATION.

(a) IN GENERAL.–Not later than the date that is 12 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to the Committee on Labor and Human Resources and the Committee on Finance of the Senate and the Committee on Commerce and the Committee on Ways and Means of the House of Representatives detailed recommendations on standards with respect to the privacy of individually identifiable health information. (b) SUBJECTS FOR RECOMMENDATIONS.–The recommendations under subsection (a) shall address at least the following: (1) The rights that an individual who is a subject of individually identifiable health information should have. (2) The procedures that should be established for the exercise of such rights. (3) The uses and disclosures of such information that should be authorized or required. (c) REGULATIONS.– (1) IN GENERAL.–If legislation governing standards with respect to the privacy of individually identifiable health information transmitted in connection with the transactions described in section 1173(a) of the Social Security Act (as added by section 262) is not enacted by the date that is 36 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall promulgate final regulations containing such standards not later than the date that is 42 months after the date of the enactment of this Act. Such regulations shall address at least the subjects described in subsection (b). (2) PREEMPTION.–A regulation promulgated under paragraph (1) shall not supercede a contrary provision of State law, if the provision of State law imposes requirements, standards, or implementation specifications that are more stringent than the requirements, standards, or implementation specifications imposed under the regulation. (d) CONSULTATION.–In carrying out this section, the Secretary of Health and Human Services shall consult with– (1) the National Committee on Vital and Health Statistics established under section 306(k) of the Public Health Service Act (42 U.S.C. 242k(k)); and (2) the Attorney General.