How Long Does Bad Information Stay On Your Credit Report

A Credit Report contains all the information about you and your current and past credit records, debts, loans, etc. A Credit Report is crucial for you as it reflects your credit score and helps in determining why does your score drop and how has your credit history been so far.

A lot of people inquire about your credit report while providing you with loan or credit, offering you a job, renting you an apartment and the list goes on.

So, if your credit report contains any negative information then it could seriously damage the chances of you getting the credit or the loan which you needed.

But due to the Fair Credit Reporting Act (Source: CreditRepairXP), you can be sure that any negative information will remain on your credit report for a limited period of time and only neutral or positive information will be kept indefinitely on your report.

So how long does negative information stay on your credit report?

There are various kinds of information which your credit report covers and each has its own limited duration.

Criminal records

If there were any indictments or arrests made on you, this information will remain on your credit report for only 7 years or until the statute of limitations has expired, whichever is greater. But remember that convictions can stay for a longer period of time on your credit report and there is no limit on this information.

Collection Accounts

If you miss some payment to your creditor or have some debts which you forgot to pay, then this information will be charged on your credit report 180 days after the missed payment. This information will then remain for another 7 years on your report and its date won’t change even if you make the previous payments together.

Also note that if you happen to miss another payment for the same collection account, then the creditors will charge it on your account from the new date and it would appear for 7 years again after the initial 180 days of delinquency.

Public Records

If a lawsuit is filed against you, then this information will stay until 7 years and once the judgment is passed, the information will further stay 7 years on your credit report or until the status of limitations has expired, whichever is longer. But most of the time, the status of limitation is shorter so you are looking at a maximum of 7 years of negative information on your credit report.

Inquiries

Many creditors make inquiries about your credit report and this information tends to stay at most 7 years on your report but most of the time, the credit reporting agencies stop reporting the inquiries after 2 years.

Bankruptcies

If you filed for bankruptcy, it can only remain on your credit report for 10 years either from the date you filed it or from the date your case was dismissed.

Delinquent Accounts

These accounts can remain on your credit report for 7 years after the last payment was made before you started missing it. It doesn’t matter if you later paid all the dues, this information will still remain there for 7 years.

  • Adverse Information

There are many information like student loans, insurances, educational loans, etc. which tend to remain on your credit report for longer than 7 years, if there were any payments missed. The information remains on your report after the last three dates which include the date when the creditor or loaner reports the account to the consumer reporting agency, the date when the Department of education took over from the guarantee agency and the date when you again missed the payment.

Concept of Revenue Recognition

In simple words revenue recognition states that the revenue must be recorded when it is earned or realized. It can also be put as a firm must not delay till the revenue is practically acquired to record. Revenue must be accounted once the firm has earned it. This is the main concept in accounting due to the fact that revenue can be accounted without acquiring.

When are revenues realized?

It is once a firm sells the services or goods for any asset or cash. For example, if a business gives to a customer an inventory, it’s called realizable revenue. This deal leads to a particular value of cash. Once the revenue is earned, it is recorded. For the above example, once the ownership of the inventory is bore by the customer then only revenue is acquired.

Following are three key exceptions to the principle:

  • Some businesses have to collect the revenue before the work even completes example defence work or construction work. In such cases, the revenue is collected several times at different stages of completion.
  • Some businesses are of the nature which has to realize the revenue once the production is finished but the sale hasn’t taken place yet. Example, agricultural companies, oil, mining due to their products being marketed and sold immediately.
  • This exception is when the revenue is realized only when the cash is actually received by the firm. This concept is called cash basis accounting. Example: instalment sales.

Bank Reconciliation

Bank reconciliation is defined as comparision of the company documents and records against the bank records. Doing this every month helps one spot any fraud or non-general transactions.

Defining Bank Reconciliation

This process is executed by collating the monthly statements from bank to the balances as well as transactions. Both the cost must match on point and it must be ensured by checking each transaction differently

Tips:

  • A company or individual should make sure that a balance is shown at the ending agreeable to you.
  • If you know ‘evening-out’ your check book, then you already know bank reconciliation. It’s basically the same reason for company.
  • It is OK to have small variations due to timing but one must be able to answer those. Like you bank will show a more balance while one of your given cheque is not deposited, you can reduce the balance as per the cheque.
  • Similarly, an e-payment might show a day previous or a day following end of month whereas you might think of it as in a different month. There is no worries as long as these things can be dealt with.

The important to Reconcilement

An account must be reconciled regularly so that there is no big problem.

There may be different set of rules for different kind of accounts such as a private/individual account or a company or business account. The code of conduct for respective account must be followed as per the law.

Why Obama’s Definition Of Economic Fairness Is Fundamentally Wrong

During the state of the Union address, President Obama once again made his case for economic ‘fairness’ to argue for more taxes and a larger government.

Obama believes that fairness cannot be achieved by the private sector of the economy, because people and nations are not fair to each other and they will never be without government policy to level the playing field.

Obama said it this way,

We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.  Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

The only solution that Obama can see is for the government to step in and change the rules that are causing unfairness that result it economic inequality.  Part of this is correct and I’m glad that Obama realizes the source of the unfairness – government policy.

But the part that he does not seem to realize is that no amount of government policy has ever been able to level the playing field.  And that is because it is impossible for government to make economic policies that are ‘fair’ and without competitive advantages and disadvantage for someone.  The only thing that government policies can do is change which businesses/nations get the competitive advantages and disadvantages.

All Obama can do is take unfair policies away from some companies and create new unfair policies for other companies.  The only question is which companies are politically connected to Obama, so they can get the new policies that create unfair advantages for them.   But this kind of politically determined ‘fairness’ is not fair at all.  In fact, all he is saying is that his influence is for sale to the highest bidding lobbyist.

Obama is saying that the economy is distorted because the government is corrupt with crony capitalism and he is going to fix it with his own crony capitalism. This is exactly what he is doing with his green energy programs, his support for public education to limit school choices and Obamacare crowding out healthcare alternative competitors.  He is giving the lobbyist and companies that support him politically the competitive advantages by giving them easy government loans, tax subsidies, price controls and direct handouts.

Methods for Accounting Inventory

The three things that make up the inventory are namely work-in-progress , raw materials and the finished goods.

Methods for accounting inventory:

  • Specific identification method. This method is used for very high cost products only as it is not feasible for others. Under this, each product is monitored separately right from the production to its selling. It involves high data tracking.
  • First in, first out method (FIFO method), this method ensures that the products first bought are also sold first. This policy is mostly preffered by many companies due to its ease and accuracy of operation. When the price of the product increase it means that the product bought the earliest are sold at least price. This results in decrease in cost of product, high profits and tax.
  • Last in, first out method. (LIFO method), in this the product bought last is sold most latest. Products in stock are the oldest ones. This method is not generally used and is also barred or banned by International Financial Reporting Standards. When the prices rise, under this method, also imply that the price of product selling tends to be more, which hence, results in a lesser amount of profits, and lesser income taxes to pay. In this method, there are more layers of stock as the stock kept is the oldest.
  • Weighted average method. In this method, only one layer of stock is maintained. The price of new stock layer bought is stooped into the cost of the already existing stock and weighted average cost is calculated.

10 Reasons Why the Economic Stimulus Package was a Complete Failure

In the beginning of the year Obama told us that if we dont pass his economic stimulus package that unemployment could reach 8 percent.

Lately, unemployment was 10.2 percent and is expected to keep inclining through next year.

The Stimulus Package Failure

The stimulus package was a failure in so many ways, here are my top ten reasons;

  • It failed in reviving the economy.
  • It failed to protect the value of the dollar which foreign nations are now threatening to replace.
  • It failed to halt the housing bubble, which will bust again after the fed stops buying mortgages.
  • It failed to stop a stock market bubble from Building up, which is getting ready to bust.
  • It failed to give any real jobs.

I hope the top leaderships stops thinking on its feet and comes out with the concrete decisions which will really help in the United states economy to prosper.And if they don’t the US economy could fall down like a pack of cards.