Credit Improvement

Your Personal Credit Really Does Matter!

Why Your Credit Matters:

Know that very few lenders (traditional lenders or non-bank private lenders) will provide business loans (new credit or consolidating credit) to borrowers whose credit score is under 640 FICO.

Even if you think you can by-pass your poor personal credit history by building business credit - lender's know these tricks too - and always pull your personal credit

This leaves borrowers with very few options.

In addition to some of the credit improvement tips below, borrowers can also seek out federal help in the form of government grants designed to help them improve their financial situation and improve their lives:

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Too Much Debt:

For borrowers with just too much debt and who are looking to find some relief from their creditors - seek to improve your credit history now - long before you approach your bank or lender. Benefits include:

1. Better credit mean better access and ability to obtain financing for yourself or your business,
2. Better credit scores can mean lower interest rates and lower insurance rates,
3. Get it done now and not have this issue come up again in the future as you try to move forward with your business. The last thing you want is to have a great opportunity presented to you or your business only to have it slip away due to a bad credit score!

There are many ways that potential borrowers can improve their credit - whether their credit is bad due to past mistakes or whether they just have not established their credit as of yet.

In either case, all it takes is a little time and effort and a simple dedication to stick to a plan.

If you just have too much debt - which in turns hurts your credit - many banks and lenders won't even talk to you. However, there are a few resources that just might be able to help you through debt consolidation:

• Unsecured Personal Loans - If you qualify for these types of loan, you can use these funds to pay off your other debt.
  
  
• Peer-to-Peer Loans - These personal loans are great ways to pay off your debt as you really get to explain to your potential lenders how you got into this situation and how their help can get your out.

Just make sure that if you can consolidate your debt (for lower monthly payments and freeing up additional income) - set a plan in place and stick to it. It you don't stick with your plan - the only one you hurt is you!

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Improve Your Credit:

The following are a few simple ways to re-establish a positive credit score:

• Immediately work to pay-off any and all public judgments including collections or charge-offs. Once paid off, ask these creditors to remove any negative items on your credit report or make it part of your deal when you pay them back,
• Pull your credit report and scrutinize it closely. If there is an item(s) that is not yours start a dispute claim with the credit bureau to get these items removed, and
• Start rebuilding your credit by either securing a new credit card or loan. Make sure you pay these as agreed and use them sparingly. This will start to create a positive credit history going forward from this point.

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Build Your Credit:

The following are a few simple ways to establish or build a positive credit score:

• To establish credit, you must have at least three (3) trade lines. However, these three trade lines are not very hard to get,
• For your first trade line, apply for a small department store charge card like with JcPenney, Old Navy, Sears, etc. When approved, use the card very sparingly once or twice and immediately pay off the amount,
• Your second trade line could be from a cell phone account in your name. Go down and open your own cell phone account and pay it as agreed.
• For your third trade line, take a small amount of money - say $300 to $500 - and put it in a savings accounts with your bank (make sure you covert the minimum and don't pay maintenance fees). Then, ask for a loan against that account. This is a secured term loan account. When approved, don't spend the money and in a month or two, use the same funds to pay off the loan.
• Just make sure that you first pay each of these as agreed and do not abuse them or you will destroy your credit as soon as you start to establish it.

In the end, if you want any lenders (bank or other wise - including trade or vendor credit) to take you serious, know that they first want to ensure that they will get paid back, meaning have you paid back other's who have taken a chance on you in the past - all shown from your credit history.

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