This edition of Footsteps Along the Path was initially issued by Clear Path Financial Education Services which has now become Kuehn Financial Education Services LLC. For more information about Kuehn Financial Education Services LLC, please email or visit www.kuehnservices.com.

Footsteps Along the Path
-A Newsletter by Clear Path Credit Consultants

Clear Path Credit Consultants believes:
If you build on your own skills,
Rely on your own abilities,
Increase your range of knowledge,
And get help when you need it,
You are the investment that will succeed above all others.

Welcome to the second edition of Clear Path Credit Consultants' Footsteps Along the Path. The goal of this newsletter is to provide relevant and succinct information on debt management to consumers and small business owners. It is designed to build upon previous issues, developing a clear path to financial freedom. Reader feedback is encouraged and thank you for the input you shared in regard to the initial launch of Footsteps Along the Path.

Please feel free to forward Footsteps Along the Path. If you have received this from a friend or colleague, and wish to be added to the newsletter distribution list, simply provide a response E-mail with this request. The same applies if you do not desire further contact, your name will immediately be deleted from the list.

In this issue:
*Article: "Life After Debt: Being Debt Free is Not the Same as Being Credit Worthy"
*Being a Consumer is a Powerful Thing: A compilation of news, views & reviews
*Consumer Alert: Electronic Underwriting Can Be Your Foe
*Answers from 6/13/03 Clear Path Quiz
*Free Upcoming Seminar: "Building a Business on a Plastic Foundation"
*Understanding the Correlation between Revenue, Profit, Cash Flow, Retained Earnings, and Income
*Topic for the next issue of Footsteps Along the Path

Life After Debt: Being Debt Free is Not the Same as Being Credit Worthy
Media bombardment of commercials and infomercials has lead the public to believe "nonprofit" debt counseling companies are the solution to financial woes. Credit Counseling services tout the relief of unmanageable debt, but never address the concern of "life after debt." If you have "walked through the valley of the shadow of debt" and anticipated a resurrected credit score after seeking aid from a debt counseling service, you will quickly realize being out of debt and being able to get a prime interest loan are not one in the same.

Why? Simply stated credit worthiness is your ability to get financing at a low interest rate and it depends on how well you manage your debts with history being of utmost importance. When an individual works with a national debt counseling company this is noted on his/her credit report. Often times, it is the creditor, such as Visa, that reports the info to the credit bureaus, not necessarily the debt counseling service, such as Ameridebt. Some lenders view this as a negative, relating to a person's inability to manage their finances and not "paying as agreed". However, if someone is deeply into debt with charge - offs ( not paying on the account) and late payments, her/his credit score will not be stellar anyway.

In addition, when a person enrolls in a debt repayment program, paper work must be completed and creditors need to be contacted. Often times, debt counseling services make tardy initial payments on behalf of their client, further injuring a credit score. Some debt agencies continue this behavior through the entire payback process.

Many people are curious at how "nonprofit" debt counseling services survive as a business. Nonprofit does not mean nonrevenue. Along with the debtor making "monthly donations" which go towards administrative fees not the outstanding credit card balance; credit counseling services are actually funded by the credit card companies for assisting debtors. Please be aware, that some debt relief services offer consolidation loans, not interest rate negotiations with individual creditors.

A multitude of issues and scams have arisen from debt counseling services. Assessing needs, providing education and budgeting assistance should be core to financial counseling. Unfortunately, many of these companies are not interested in this.

Clear Path Credit Consultants focus is debt management through education and consumer advocacy. It does not have an impact on a credit score because Clear Path empowers individuals to do for themselves what credit counseling agencies "claim" to do. Clear Path Credit Consultants balances being out of debt with credit worthiness.

Being a Consumer is a Powerful Thing
If a college age child is listed as an authorized user on a parent's credit card and the mother and /or father declares bankruptcy, it will also be noted on their child's credit bureau reports. What a way to start out life...twenty-two years old, a mountain of student loans and a bankruptcy! Always know the status of all credit accounts: individual, joint and authorized user. This info can be found on the initial credit card application form, credit bureau reports or contact the creditor.

Consumer Alert: Electronic Underwriting Can Be Your Foe
Lenders rely on electronic underwriting systems for efficiency, just as they do for your three digit FICO credit score to instantly reveal your credit worthiness. If errors or omissions cause your credit score to be lowered, an electronic underwriting system flags the loan as a higher cost loan or even subprime resulting in an increased loan interest rate.

What to do to prevent this: 1) pull your credit bureau reports (Experian, Equifax and Trans Union) three to six months in advance of applying for a major loan and correct all errors 2) always ask the lender what your credit score is. If the lender refuses to tell you...find another lender! 3) Always ask if you are being quoted the best interest rate, if not discuss with the lender the data that depresses your score. If the loan officer does not want to have this conversation, simply mention the FTC's regulation, "Adverse Action Notice", which forces the lender to divulge the source of harmful credit information. Use this to amend your credit bureau reports. Please be aware negative information can not be removed from a credit report only inaccurate information will be deleted. Armed with this knowledge, request the lender manually underwrite the loan or use a "rapid rescoring" process.

Clear Path Credit Consultants assists clients in understanding their credit bureau reports.

Free Upcoming Seminar:
"Building a Business on a Plastic Foundation"
August 9th
2:00 P.M.
Glendale Public Library (59th & Brown Street, Glendale AZ)
RSVP Kathy Hamel, Glendale Business Librarian, at 623-930-3552

"Credit card companies have discovered small business is good business and have tailored their products and services to fit the smallest of ventures. Discover ways to improve your credit, increase cash flow, along with evaluating credit card features. This presentation will aid start up companies as well as growing businesses by addressing: 1) utilization of personal credit during start up 2) development of credit in your business name and 3) procurement of a bank loan."

*Please note that even though this presentation takes place during the monthly Women's Business Builders meeting, men are welcome. All are encouraged to attend(Bookkeepers and CPAs this is a great presentation for your small business clients)*

Understanding the Correlation between Revenue, Profit, Cash flow, Retained Earnings and Income
As an entrepreneur, you established your business to do what you enjoy. However, a basic understanding of finance will aid you in making wiser money decisions. As Maya Angelou states, "When you know better, you do better." Permit Deborah Kuehn, MBA to analyze your current finances to make business and personal goals achievable.

Upcoming in Footsteps Along the Path
Business euphemisms and why most Americans are in debt

Deborah A. Kuehn is the sole proprietor of Clear Path Credit Consultants, a money management education service. Kuehn views herself as a consumer advocate that assists people in leading a debt free and credit worthy lifestyle. She has a MBA with a B.A. in Communications. Clear Path Credit Consultants' services include: spending plan development (budgets), cash flow budgets and forecasting, credit bureau report analysis, money management skills sessions, assistance with interest rate negotiations, along with community and corporate lectures.
"Clear Path Credit Consultants: Helping you sleep better at night."
PH: 623-580-9293

This issue is dedicated to Ms. Katharine Hepburn, who passed away on June 29, 2003. "May a flight of angels sing thee to thy rest" - W. Shakespeare

Written by Deborah A. Kuehn MBA
All rights reserved
Clear Path Credit Consultants is a registered trade name
Issue II
June 30,2003

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