Your credit score. It could be a dream come true or your worst nightmare. But most of the time it is sort of like that rude mother in law coming to pay you a visit at your house. You are aware that she is coming to stay, and you are not looking forward to it, but you are too nervous to ask or even consider how long she might be paying you that visit. OK, so that analogy wasn’t that great. But anyway, read on to see just how long negative marks will stay on your credit history.

First, there are mistakes on your credit report. This happens when something that you didn’t do, or an account that doesn’t belong to you shows up on your score when you are looking it over. These will be removed immediately. Looking for and removing mistakes on your credit report are a crucial reason why we should check our credit scores at least once a year. If you do find a mistake, or a negative account that isn’t yours, get in touch with the credit reporting agency and the creditor too. Within 180 days you should be able to have that negative mark taken off your record.

Whenever a creditor pulls your credit report (which means that they ask to see it), something called a hard inquiry will be reported on your record. If it is only an occasional hard inquiry this most likely won’t hurt. However, if there are a large amount of inquiries recorded on your record, this will generally make prospective creditors think that you need the cash and you need it fast.

If a potential lender looks at your credit score and sees that they are the tenth financial institution that you have asked for money, they will have cause to be wary. Although the credit reporting gods will concede that people shop around for loans and credit, and say you have, two weeks where you have a lot of inquiries, they will take that into consideration and not penalize you too much, the bottom line is that the more hard inquiries that show up on your report, the lower your score will be. Hard inquiries last up to two years.

However, keep in mind that not all inquiries will negatively affect your credit score. A soft inquiry occurs when you check on your own credit score, or when potential creditors check your credit without you knowing to you to see if they want to make you any unsolicited offers of credit. Actually, lenders see this as a good sign. If you are regularly checking your credit report, you are most likely fiscally responsible. To be continued in part two….

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

When you find yourself in a situation that may lead to larger complications down the line, you try to find the fastest and most headache-free solution to the problem. It is always the best way to nip the problem in the bud before it even starts.

The same principle applies when you’re dealing with customers who have lagged on payments, whose checks have bounced, who have totally stopped making their payments and have deemed themselves unreachable and a dozen other scenarios that will surely make your head spin. The role of your credit manager if you have one, at this point, is to decide whether to deal with these problems in-house or pass on these accounts to a collection agency that will then be tasked to follow-up and, at best, recover the money owed to your company.

Usually, a debt collection agency is called upon when you really have an overwhelming problem with your customers’ payment backlog. You’ve already tried resolving the issue using your in-house crew and having them initiate non-threatening appeals to your accounts by making phone calls, sending letters and even making personal visits. Or, sometimes, the problem has persisted and you find that your whole business has reached its danger zone and its plight hinges on whether or not you can recover some of the money that your owed. Whatever the case, hiring a debt collection agency seems to be the best way to deal with the situation.

However, extra care must be exercised when you finally decide to place your past dues with a debt collection agency. You have to remember that hiring a collection agency means that you are turning over a part of your business to someone totally on the outside. First of all, when you choose a debt collection agency you have to be sure that they come highly recommended by someone who has made use of their services and have been highly satisfied with them.

It is equally important that you check with an accrediting organization like that of the Better Business Bureau. This just makes sure that the collection agency that you’ve hired is regulated and subject to a higher power if they fail to deliver on their promise.

Second, when selecting a debt collection agency, you have to consider their technological capacity and equivalent manpower to handle your demands. When you say technological capacity it means that the agency will have the contact center in place to handle any communication between your customers and the agency, with reporting to be done on a regular basis to you as the ‘mother’ company.

You also have to make sure that the agency’s staff is trained to represent you as the client and not be seen as a third-party provider. It has been reported that most people are adverse to collection agencies and are more prone to shying away from them which will make it harder for you to go after them.

The agencies experience and customer-related orientation need to be as good as the fees that you’ll be paying. You need to negotiate a good compensation package that will take into account all of these conditions mentioned so you’ll at least be assured that you’re getting your money’s worth. It doesn’t make sense for you to be paying so much and not getting anything in return.

Rapid Recovery Solution is a medical debt collection company.

Layoffs and pay cuts pushed more people into bankruptcy last year, and analysts say that the situation will most likely not improve until the unemployment issue improves. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.

According to bankruptcy lawyers, it is not just firings and layoffs that are motivation to file. It’s the losses of once-regular over time pay and full time status that have left consumers from keeping up with monthly payments that in the past were not an issue to pay.

U.S. Bankruptcy Court information shows that there were 27,413 bankruptcy petitions filed in Wisconsin last year. More than 80% were Chapter 7 cases. Chapter 7 cases annihilate medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press illustrated that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.

And even though bankruptcy wipes out the looming debt and offers consumers a fresh financial start, consumers often remain unemployed and are unable to find employment to get a decent income again.

Even more discouraging, unless the economy improves enough for industries to start hiring, there virtually no reason to hold the belief that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.

Bankruptcy may seem like a good option to get a fresh start, but it negatively affects your credit report for ten years, rendering you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it is a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.

Mallory Megan is employed by a debt collection agency. She also composesstories on consumer spending, business, finance, and debt collection.