Business and Finance System

Posts Tagged ‘Financial Services’

Who is the Credit Bureau?

Credit bureaus, also known as a credit repository, is an entity that collects information about consumer credit history. Your credit history includes information regarding your identity, your payment habits, and your public record. Credit bureaus sell credit reports to lenders such as banks, finance companies, and retailers. In addition, the credit bureaus will sell credit reports to potential employers, landlords and insurance companies. Business and lenders use credit reports to determine credit worthiness. There are three major companies in the business of collecting and distributing credit histories on all Americans. If you’re an average American, more than likely all three companies have your credit history report. Experian, TransUnion, and Equifax all competitors – which means – each company has different versions of your credit history. This makes it necessary to obtain reports from all three companies, to ensure that no false information in their files. Lenders, landlords, and employers use one of the three credit bureaus mentioned above. Mortgage companies and car dealers take advantage of all three bureaus simultaneously. TransUnion serves a variety of industries including financial services and banking, insurance providers, mortgage and real estate services, direct marketers and retailers, collection agencies, communications companies and energy and health facilities. Experian is the company that was created after TRW left the credit reporting industry in 1996. Experian collects information about you and your credit history from public records, your creditors and other reliable sources Equifax is the oldest of the three major credit bureaus, which dates back to 1899. The two brothers founded a company called Retail Credit Company in Atlanta, Georgia. The company became Equifax in 1975 and they claim to be the largest provider of consumer information. Equifax serves customers in various industries including financial services, retail, healthcare, telecommunications / utilities, brokerage, insurance, and government agencies.

a study in Australia have revealed that increased financial education at 10% of the population will potentially improve the Australian economy by 6 billion Australian dollars per year by opening 16,000 new jobs.

It could all happen because people are increasingly aware of the importance of managing their finances and how to use it for the future. Therefore, school children should have been provided with financial education, so that later they can have control over the money they have.

According to Annamaria Lusardi, professor at Dartmouth College, as quoted from USnews.com, said that the people who know the basic principles of finance will have a better retirement plans, have greater wealth, and can avoid the debt (for consumer goods) with more good.

Outside their own country, financial education is taught in schools, but it is still not enough. Just like most other subjects in schools, financial education is generally still less effective for teaching in a school system that is less applicable.

According to Robert Kiyosaki, education can be started from the words. Basically the same as the principles that already exist, ie “you are what you think.” Because, words alone would aim to “feed” our minds with something positive, or negative.

Start a financial education with words such as could be done by using a “language rich”, as the term assets and liabilities. But, of course, words alone are not enough, because it is only a part of a process.

when there are increases in the cash requirements resulting from extended payment deadlines, companies must rely on third parties seeking to obtain the necessary financial means. But the discounting and factoring financial services, while offering advantages to companies for financial management and the liquidity, they also pose a high financial cost and it can not be used in all businesses.

Another point is that in many cases, cause bad loans to the company concerned about economic losses so great that its short-term solvency is impaired. And in the worst failures may force the company to permanently cease their business activities.

So the active management of the collection allows firms to receive a steady and abundant flow of cash, money can be reinvested in the company and therefore do not have to resort to external financing. For which a large cash flow ensures good financial health of companies. And it prevents them from having to resort to temporary funding sources, thus achieving a considerable saving of financial interests.

Now those times when the word was enough to ensure the success of business operations and in which the bad payers were assigned the finger and the margins of commercial activity have already passed into history. Morality in the business world does not punish the poor payment practices, and now intentionally delaying payments to providers is often considered as equivalent to good corporate governance. Currently have a harmful habits universally extended payment posed a significant risk to the suppliers of goods and services.

It should be noted that the deterioration in payment practices not only caused by economic factors, but also reflects a structural trend in relations between companies. Therefore the phenomenon of delinquency should not be attributed solely to changes in economic cycles, but there are also structural causes.

Another important axiom in finance is the principle of time value of money. This axiom states that the value of money decreases over time, and therefore received a euro today is worth more than one euro collected at a future time. On the one hand this principle is supported by the returns available from the money received today, for example in the form of interest if properly invested capital so if there is no money to sacrifice the potential benefit of a euro gained today. Then there is the phenomenon of inflation, which diminished the value of currency units, so the perceived monetary unit in the future, will have less value than the same monetary unit received today. Consequently this concept of time value of money is central to sound financial management, and should encourage companies to receive the money as soon as possible.

All companies need cash, like a car needs fuel to keep the engine running and able to move. However, payment defaults and losses are harming fuel velocity and following the simile, the bad are gas leaks important enough to be cut right away to prevent the engine runs out of fuel and stop is reached.

For these reasons it is necessary that payment flows that will work well and constantly injecting plenty of money in the treasury, so that if companies get constant liquidity, go well. On the contrary, when a business fails your bills paid on time (because of late payments by customers) may not meet its own obligations to pay cash and enter into crisis.

Thus the speed with which collections are made of invoices is essential to business competitiveness. Any delay in charging the longer the time lag between the flow of cash outflows and inflows, causing a marked deterioration in the cash position of companies and causes increase in interest expenses and hence financial costs.

Companies should worry about collecting all sales on time, as each day of delay in payment of an overdue bill to the creditor company is a financial cost, and therefore the collection team’s mission is very important to account firm performance.

And do not forget that one of the key factors for the smooth running of companies is the ability to generate cash, and this capability is directly proportional to the effectiveness of management companies achievable.

Keep in mind that one of the most universal principles of good financial management is based on the axiom that measuring the value of a company is best done by evaluating the cash flows by calculating book profits. Therefore when measuring the wealth of a company, the best size that can be employed is the cash flow and not the accounting profit.

The company receives the cash flows and can reinvest in the business, but accounting profits are recorded when received, rather than when money is actually available to the company.

Consequently, it is more valid to the valuation of a company using cash entries (dynamic concept) that the benefit (static concept) that provides the business. Besides the profit generated is a magnitude more manipulable than cash flows.

Primerica is a company that specialized in providing financial services for customers. The company was started in 1977. It experiences steady financial growth and has been expanded to become a larger company. Primerica offers a number of investment opportunities for clients including mutual funds investments, annuities and etc. The clients who have invested with Primerica have assets that worth over $31 billion.

Primerica is famous for offering the term life insurance program. Up to date, more than four million Americans have life insurance with Primerica. Primerica maintains about 2 millions investment account. The total worth of Primerica life insurance is $80 billion. Every day, Primerica is paying out an average of $80 billion for claim benefits. Customers can also buy auto and homeowner insurance policies from Primerica. The premium rate for Primerica insurance is cheap and affordable for people with middle range income.

Primerica offers financial needs analysis for people that don’t know how to manage their finances. If you don’t know how to prepare for your future financial needs, you need a financial plan to provide guidance. The financial needs analysis is complimentary. It provides strategies on how to get sufficient funds to attain your financial goals. It teaches you how to settle your debts and loans without requirement additional cash outlay. The strategies listed in the financial needs analysis allow you to solve your debt within a short time. The report also includes steps on how to build your financial future. By following the steps, you will be able to manage your finance effectively.