How Credit Building School Helps Students

How Credit Building School Helps Students

Here is exactly How Credit Building School Helps Students. We teach students the exact method to build personal credit, business credit and successfully complete diy (do it yourself) credit repair. 

In this modernized day of our time, we all know that technology took its own place. Some are catching up with what is trending, some are not.

But believe it or not, most people prefer to be in line. There is nothing wrong with keeping up with the trend but there are a lot of things that you need to keep in mind also.

In particular, these people are mostly students, teen, young adults, and millennials. In this generation, we all have our whole freedom to choose for ourselves and what we are going to set in our minds.

As a responsible young adult, you need to set your standards and goals correctly in order to aim what you are aiming for and to be the successful person you want to be in the future.

Different attitudes and perspectives of a young adult may differ for some reasons such as environment, current living situation and sometimes family situation.

The mentality of money and credit specifically should be the same for everyone. The criteria rarely change.

Earn more money than you spend. Pay your bills and debt in a timely manner. These simple rules will make for a high credit score and a manageable budget.

In the present time, parents give their children a credit card for school purposes and for personal needs – and wants as well, without thinking if they have enough knowledge on how to handle it or use it.

This is somehow a wrong practice for some because not all the teenager or students are the same in terms of being a responsible one. Others misuse credit cards and they are overspending most of the time without knowing the possible effect in their credit score in the future.

Overspending might be the cause if your credit score rating hit a bad score. You, as a student and young adult, might have a hard time rebuilding it compare to the adult one.

If you are responsible enough at your early stage in your life, you will not be facing this kind of trouble with your credit card. They say that when you are in your college, it is the perfect time for you to build your own credit score, but others do not know where to begin.

That’s why there is credit building school that will surely teach you on how to build your own credit score and will also help you to rebuild your credit score from bad credit. As a student, you might be wondering what credit building school is and how it will help a student like you.

Credit building school refers to a company that is designed to help people who have a poor credit or who have little or no credit history. Having a good credit score makes fast approval for credit cards and loans at better rates and terms.

Credit building school will teach you how to repair your credit. If you misuse your credit card and go shopping again and again without thinking how it will affect your credit score, there is a higher possibility that you will hit a bad credit score.

If this happens, you can ask for help from credit building school. Ask them to guide you and help you on how you can repair your credit rating. Rebuilding a credit score is not as easy as you think, it may be more difficult for a student like you to rebuild it.

It does not happen overnight, an hour or days but it will take months or even years rebuilding a bad credit score. Some instances might occur when misusing a credit card and you will be the one who will suffer in the future. So, you need to be very careful in every decision and spending that you will charge on your credit card.

One of the most exciting parts of being a young adult is becoming financially independent. But learning how to do so is a very challenging one. Building a good credit is a must for each and every one of us.

There are simple ways on how you can build your own credit in a good hit.

First, you need to be an authorized user on your parents’ account.

This can help you to build your own credit score by “piggybacking.” In piggybacking, your parent will make you an authorized user of his or her account. If your parent has a good credit score, your credit gets a boost.

Second, open up your own credit card. If you can provide your own income, it may be time to open up a credit card under your name. It is better for some to have a source of income while studying.

In that way, you are able to save the extra money and you can put it in your bank account in the future. You will be able to prepare in buying something that you can call your own like car, house and other important things that will be a great help to you in the future.

Having your own credit card under your name means, the responsibility of handling your credit card wisely and paying off your debt falls fairly on your shoulders.

Third, get the right credit card for you. Once you are able to qualify for a regular card on your own, it is important to keep in mind that not all credit cards are the same.

Before you apply for a credit card at a certain company, you need to do the research on which company offers the most benefits: a lower interest rates, reasonable credit limit, no annual fees, and clear billing policies.

Fourth, use the credit card for occasional, small purchases. Since responsible card use and on-time repayments will help you to build a good credit score, while also discouraging the bank from closing your account due to inactivity, do not just leave the plastic sitting in your wallet.

In order to build a good credit history, you should be able to charge only the goods and services that you think you can repay on time.

Fifth, avoid big-ticket buys, except in case of emergency. We all know that a credit card is a valuable financial tool. However, a student like you must be able to manage your own card responsibly and orderly to benefit from using the tool.

Keeping your debt levels low will ensure that in case of an emergency you have enough credit that you can use on your card. For example, if your tire blows out or your cell phone drops off in the toilet, you can purchase a new one for replacement without exceeding to your credit limit.

Sixth, pay off your balances each month.

When you are new to building a good credit score, it is important to do your best not to carry a balance on the card. Use only the card for purchases you think you can afford and pay off each balance every end of the month.

If you carry a balance, you will need to pay also an interest fee. So, make sure that every purchase you make are worth buying and you can repay it on time.

Seventh, pay all your other bills on time.

Paying all your bills from apartment rentals to your internet service consistently and on time is very important. If you think that only credit card can affect your credit score rating, think again.

Library fees, traffic fine, taxes, and other dues can make a difference too.

Eight, do not co-sign for your friends. Do not ever try to do this. Because if your friend slips off – by taking too much debt or missing payments to the bank, the co-signer can quickly see their credit ruined.

The co-signer will not only be liable for everything charged if his friend decides not to pay, but also his credit score will be affected.

Ninth, do not apply for several credit cards at one time. Now that you have your own credit cards with you, do not go wild. If you apply for several credit cards in a short period of time, your credit score will fall down.

Credit building schools also offer business credit building. This can help students with small business to guide their way in business. Not only students but for the people who have their own businesses.

If an individual has a credit score that needs to be taken care of, businesses have it also. Credit building school will help and guide your business to attain a good credit score. If your business credit is separated from your personal credit, it would not impact your personal utilization score.

Credit building school shows you also how to build a credit score from scratch. Maybe You are wondering how long it takes to build a good credit score from scratch.

Luckily, building a good credit score from scratch does not take too long. According to one of the major credit bureaus, the Experian, it only takes between three to six months of regular credit activity for your file to create enough credit history for a credit score to be calculated. Building credit can be tricky and challenging.

If you do not have a credit history, it is hard for you to get a loan, a credit card or even an apartment. I will explain to you some ways on how to build a credit score from scratch.

First, apply for a secured credit card.

If you are building your credit score from scratch, you will need to start applying for a secured credit card. This means that your secured credit card is backed up by the cash deposit you make upfront.

The deposit amount is usually the same as your credit limit. You can use it just like a normal credit card. If you fail to make payments on time, your cash deposit will be used as a collateral.

Second, apply for a credit builder loan.

It is exactly what it sounds like. Its main purpose is to help people build credit. Basically, the money you borrow is held by the lender in an account and not released to you until the loan is repaid.

Third, get a co-signer. It is also possible to get a loan or an unsecured credit card using a co-signer. But make sure that you and the co-signer are fully aware that he or she might take full responsibility in paying your whole debt if you fail to pay it off.

Fourth, become an authorized user of someone else’s credit card. A significant other or a family member may be willing to add you as their authorized user on their credit cards. In that way, you will be able to enjoy access to their credit card and you will be able to build a credit history, but you are not legally obligated to pay for your charges.

You and the owner of the card should come up to make an agreement on how you can use the credit card before adding you as an authorized user.

Lastly, get credit for the rent you pay. Rent-reporting services such as Rent Track and Rent Kharma take a bill that you are already paying and put it in your credit report, helping to build a positive and good history of making payments on time.

I hope this article will help you on how to build credit scores from scratch and how credit building school can help you in many ways.

Having a good credit score is an advantage for you and for your current lifestyle as well as in your future. It can help your life easier, relaxing and more affordable.

So be wise and responsible enough for using your credit card because every decision you take and actions you do will affect your credit rating and will have an effect and damage to your living. Always remember to not hit a bad score because it is not easy and fast to rebuild it.

It will need your extra, time, effort and energy. So, instead of putting your extra effort in it, be a responsible credit card holder.

Derogatory Marks That Hurt Your Credit Score

Derogatory Marks That Hurt Your Credit Score

Several Derogatory Marks Hurt Your Credit Score. Here are the most familiar marks:

Public records
Collections
Judgments
Late payments
Closed accounts/Charge-Offs

Given the fact that every time we came out to a decision, it will always affect our credit score. Your credit score and underlying history are one of your most vital parts of your financial life. Your credit score follows you forever, and it will play a huge role in many major financial situations throughout your life.

Many people think that a credit score only really matters when it comes to being approved for a loan or credit card, but it goes far beyond that. Your credit score is a three-digit number that is based on the information in your credit report. After taking into account all aspects of your credit report, a mathematical formula is used to determine what your score should be, the higher, the better.

The leading credit score in the industry is FICO and range from 300 to 850. A credit score is a statistical forecast of individual credit risk, computed from a credit report and sometimes other information. Its purpose is to substitute for all or part of the human judgment involved in deciding who to lend money to because it is more accurate, faster, and less likely to discriminate against protected groups.

Credit scores are used by lenders as one of the main factors in decisions to approve or decline loans and to charge higher interest rates and fees to higher-risk customers. The credit score affects how large a mortgage a consumer can be authorized for, compared to their income, and whether the consumer can get cash out in a refinancing. In addition to determining interest rates, credit card issuers use credit scores to set initial credit limits and to decide whether to increase or decrease them later.

Credit scores are also used as an input to auto insurance premium calculations because there is a statistical relationship between credit scores and auto insurance claim rates: the lower an individual’s credit score, the more likely they are to make an auto insurance claim. Landlords use credit scores to help assess the financial reliability of prospective tenants.

The most commonly used type of credit score is an estimate of the odds against a consumer becoming 90 days past due on any account, having a debt go to a collection agency, declaring bankruptcy, or being subject to a new lien or court judgment, within the next two years. An increasingly common and somewhat controversial practice is taking place as employers check the credit of prospective new employees. The argument for doing this is that employers believe they can use credit history to determine responsibility.

There are situations where a bad credit history may be due to something entirely out of an individual’s control, but this is still something to keep in mind. Your credit scores determine a lot more than the loans you can get and the interest rates you pay. Insurers use credit scores to set premiums for auto and homeowners coverage.

Derogatory marks that hurt your credit score can cause landlords to deny you the ability to rent their apartments. Credit scores determine who gets the best cell phone plans and who has to make more significant deposits to get utilities. Credit scores are a financial tool, in other words, but whether they’re a lever or a hammer depends on how good they are.

You can leverage great scores into great deals — on loans, credit cards, insurance premiums, apartments, and cell phone plans. Bad ratings can hammer you into missing out or paying more. Since credit scores have become such an integral part of our financial lives, it pays to keep track of yours and understand how your actions affect the numbers. You can build, defend and take advantage of great credit regardless of your age or income.

Once your scores near 700 or so, you’re considered a good risk. When they’re over 760, you’re golden. You should expect the best rates and terms lenders have to offer since they’ll be competing hard for your business. Reconsider your auto insurance as well, notably if your credit has improved substantially since your policy was set up.

Your current insurer may not check your credit at renewal time; ask it to re-run your rates. It’s a good time to shop around as well. With all the money you save, you can make progress on important financial goals such as saving for retirement, boosting your emergency fund or getting out of debt faster.

That’s the real power of high credit scores. Instead of begging for loans, paying too much and trying to make do with what’s left over, you’ll finally have some options to get ahead. There are several reasons as to why you should maintain a good credit score, preferably above average.

The average credit score is said to be about 750 and anything below 750 is a bad credit score. Listed below are several reasons as to why an individual should maintain a good credit score. Lenders look to your credit score when determining your eligibility to grant loans.

A good credit score will instill confidence about you with financial institutions.

Credit cards – Before banks check your eligibility criteria for income and other factors, they check for your credit score. The banks require the individual to have a credit score of a minimum of 750 or more to be eligible for the credit card. The bank will reject the application right away if the applicant has a poor credit score.

The rate of interest- A good credit score will get the applicant a lower rate of interest when it comes to loans and credit cards.

Higher limits- A good credit score will not only get you a lower rate of interest on your credit cards and loans, but it will also help you in getting a higher loan amount with your mortgages, and lines of credit, even limits on your credit card. A bad credit score, on the other hand, will result in a lower credit limit.

For the future- Even if you don’t see yourself applying for loans or credit cards shortly, ensure that you still maintain a good credit score or credit history. A good credit score will come in handy when you apply for home loans/credit cards or other kinds of loans in the future. Having no credit score or credit history is just as worse as having a poor credit history or poor credit score.
If you have a good credit score, you can get loans and credit cards with ease.

Here are a few of the benefits of maintaining good credit:

Get The Best Credit Card! A good Credit Score entitles you to the best of Credit Cards. Get a feature-loaded card and reap the benefits.

Quick Loan Approval!  A good Credit Score works like an expressway for your loan application. Banks will approve your claim quickly and readily.

Better Interest Rate! With the backing of a good Credit Score, you can bargain for a lower rate of interest on loans and Credit Cards.

Loans Made More Affordable! Loans come saddled with processing fees and many other charges. You can bargain your way out of some of these charges with a good Credit Score.

Credit scores indicate the likelihood that you will default on a credit card or loan obligation. Having a low credit means you’re a riskier borrower than someone with a better credit score. Creditors and lenders make you pay for this risk by charging you a higher interest rate.

If you are approved with a bad credit score, you will pay more in interest over time than you would if you had better credit and a better interest rate. The more you borrow, the more you’ll pay in interest. Creditors are willing to accept a certain amount of risk.

However, if your credit score is too low, they might not want to lend to you at all. With bad credit, you may find that your applications are denied. Many people don’t realize landlords check credit before approving a rental application.

Having bad credit can make it much more difficult to rent an apartment or house. If you find a landlord who will rent to you despite your low credit score, you may have to pay a higher security deposit. Utility companies – electricity, phone, and cable – check your credit as part of the application process.

If you have a bad credit history, you may have to pay a security deposit to establish service in your name, even if you’ve always paid your utility bills on time. The security deposit will be charged up front before you can create service in your name. Cell phone companies check your credit too.

They argue that they are extending a month of service to you, so they need to know how reliable your payments will be. If your credit’s wrong, you may have to get a prepaid cell phone, a month-to-month contract where phones are typically more expensive or go without one at all.

If you are leasing or making payments on your cell phone, you may have to pay more upfront for a new phone or your fees may be higher if you have bad credit. Certain jobs, especially those in upper management or the finance industry, require you to have a good credit history. You can be turned down for a job because of negative items on your credit report, exceptionally high debt amounts, bankruptcy, or outstanding bills.

Insurance companies check credit. They argue that lower credit scores are linked to higher claims filed. Because of this, they check your credit and charge a higher premium to those with lower credit scores, regardless of the number of applications you’ve filed.

Bad credit itself doesn’t lead to debt collection calls. However, the chances are that if you have bad credit, you also have some past due bills that debt collectors are pursuing. Many new businesses need banks loans to help fund their startup.

A bad credit history can limit the amount you’re able to borrow to start a new business, even if you have a solid business plan and data supporting your business success. Banks check your credit before giving you a car loan. With bad credit, you might get denied a car loan altogether.

Or, if you’re approved, you’ll likely have a high interest rate, which leads to a higher monthly payment, especially if you buy from a “no credit check” or a “buy here, pay here” car lot.
Now that you already know the importance of having a good credit score, how credit score affects your life and the factors that may affect you on having bad credit, it is also essential for you to know what are the derogatory marks that affect your credit score.

A derogatory item is considered harmful and typically indicates serious delinquency or late payments. Derogatory marks are negative, long-lasting indications on your credit reports that generally mean you didn’t pay back a loan as agreed. For example, a late payment or bankruptcy appears on your stories as a derogatory mark.

These derogatory marks generally stay on your credit reports for up to 7 or 10 years (sometimes even longer) and damage your scores. If you have a lower rating coupled with a derogatory mark, you may have a hard time getting approved for credit or may get less-than-ideal credit terms. But the good news is that the impact on your credit of all derogatory marks decreases over time.

A derogatory mark can land on your credit reports in two ways. A creditor or lender may report negative information to the credit bureaus, which is then translated into a derogatory mark. Or the credit bureaus can add public records to your credit reports.

These may include bankruptcies, civil judgments, and tax liens. A derogatory mark typically affects a higher score more than it will a lower score. Also, a minor derogatory mark, which can be caused by late payment, generally damages your scores less than a significant derogatory mark, which can be caused by something like a foreclosure.

The amount of time a derogatory mark stays on your credit reports depends on what type of target it is. The chart below covers the different kinds of derogatory marks and how long they will likely remain on your credit scores.

Derogatory Marks That Hurt Your Credit Score explained.

Public Records
A section on your credit report is reserved for public records. These are entries that are also on file with a local, county, state, or Federal court. After serious delinquency, your creditor may take legal action against you.

If the court finds in favor of the creditor, the move will become a matter of public record, and in some cases, the action will see it’s way to your credit report. Public records that can appear on your credit report include bankruptcy, judgment, or a tax lien. In some states, foreclosure and repossession are also public records.

These entries are also the worst types of entries to appear on your credit report because they show serious delinquency. Not all court actions are placed on your credit report. Divorce, for example, is a matter of public record, that doesn’t show up on your credit report or affect your credit score.

Typically only public records that stem from a debt affect your credit. If there are public records on your credit report, then this is going to leave a negative impact on your credit score. This may remain on your credit report for seven years or more.

Collections


When a creditor thinks you ultimately won’t pay what you owe, usually after several missed payments, it can write or “charge off” the account for tax purposes. After a creditor has charged off the report, it can sell it to a third-party collections agency. The collections company will try to get a payment from the borrower.

After an account is overdue by 120 days, it might be sold to a collection agency, which can put a new derogatory mark on your credit. A debt collection is a type of financial account that’s been sent to a third-party debt collector. Debt collectors are companies who collect unpaid debts for others.

The original company with which you created the debt most likely assigned or sold the account to the collection agency after you missed several payments and it was unable to get you to pay. It’s usually more cost-effective for companies to hire debt collectors than to continue to spend their resources pursuing payment on delinquent accounts.

When they’re trying to get you to pay your debt, debt collectors will call you, send letters, and notify the credit bureaus of the collection account. If they have your work phone number, debt collectors may even call you at your place of employment unless you let them know your employer doesn’t approve of those calls.

Some collectors have been known to show up at a person’s home in their attempt to collect a debt. Surprisingly, that’s legal. Debt collectors might even call your cell phone if you gave the number to your creditor to contact you. Debt collectors can only call you between the hours of 8 a.m. and 9 p.m. your local time.

Debt collectors may call you several times a day, especially if you’re dodging their phone calls. However, collectors are forbidden from calling you back-to-back in an attempt to annoy you. When a debt collector has a hard time reaching you, they may call your friends or neighbors to make sure they have the correct contact information for you.

They’re allowed to do this, but they’re not allowed to reveal that they’re collecting a debt and they can’t contact the same person more than once. Any financial account can be sent to a collection agency if you become delinquent on the payments.

When an account goes to collections, it will typically also be listed on your credit report and used to calculate your credit score. Unfortunately, debt collections bring down your credit score and can continue to affect your score even after you pay off the balance.

Judgments


If you’ve lost a civil lawsuit that requires you to pay debt or damages, it can appear on your credit reports. Maintaining a good credit score helps your ability to obtain financing for a home or business, but it also impacts many other areas of your life. Your interests rates are higher with lousy credit.

Your insurance rates are even higher while holding horrible credit profile. Deposits for utilities are higher if your credit score is low. Judgments are one of the factors that can cause your credit score to drop.

Judgments are nasty items to have on your credit report as they can cause problems whether or not they are paid. Judgments on your credit report make it very hard to get any other types of loans without massive down payments, huge fees, and maximum interest rates. Once a creditor obtains a judgment, they can attach bank accounts, garnish wages, and file liens on any other property you may own, including your home, land, cars, and boats.

Removing judgments from your credit score may be possible if you have paid the judgment. They will not come off automatically, but you should contact your creditor and have them file court documents indicating that the judgment is paid and also contact the credit reporting agency on your behalf. A judgment can hang over your head for a long time.

The statute of limitations for collecting a debt using a judgment varies by state and changes a lot – periods of five, 10 and 20 years are common. And it gets worse: Many states allow creditors to renew a judgment, and some allow multiple renewals. State requirements to renew also vary. You may need to consult a lawyer to see which statute applies to your judgment.

Late Payments


An account payment that is past due is generally the only form of a “minor” derogatory mark. After the debt is reported late, its severity may increase every 30 days it’s not paid. Banks and issuers consider payment history when evaluating your credit risk and deciding whether or not to approve you for credit.

A long-standing history of on-time payments suggests that you are a responsible and reliable borrower; a deplorable history of on-time payments indicates that you may not repay debts and could result in a costly loss to the bank or issuer. Being unreliable with bills is a red flag to financial institutions, and several things can occur when you pay late.

Paying late is a dangerous credit habit that could lead to more damaging credit actions, such as neglecting an account until it becomes delinquent or sent to collections. A credit account in collections may remain on your credit report for seven years and cause even more damage than a late payment.

One of the scariest things about a late payment is having it reported to the credit bureaus is knowing it’s going to hurt your credit score. The new fee penalties you can pay and be done with, but once a late payment is on your credit report, it will be there for up to seven years.

Revealing your mistake to anyone who checks your credit report during that period. Because of the way late payments are reported, you get somewhat of a grace period for being late without having it affect your credit.

If you’re only a few days or a couple of weeks late on your credit card payment, you can dodge having the late payment placed on your credit report as long as you make up the debt before the 30-day mark. Make sure you make the full missed payment to keep the late payment from being reported on your credit report.

Closed Accounts


Bank accounts don’t have to be forever. You might want to close an account because you’ve found a better account, you’re relocating to a new state where your bank has no branches, or because your unsatisfied with your old bank’s customer service. Before you move on from your bank, you probably want to know if closing a bank account affects credit scores so you can take precautions if necessary.

The good news is that closing bank account doesn’t affect your credit score. As long as there are no issues with your account, you can switch to a new bank without worrying about damaging your credit score. Many people mistakenly believe that all financial information, including bank account activity, is factored into their credit scores, but that’s not the case.

Your credit score is calculated based only on information included your credit report, and your bank details aren’t reported to the credit bureaus. In some cases, a closed account can work against you, most especially if the account was closed with delinquency and reflects negatively on your credit report. In this scenario, if you could remove the account from your credit report, your credit history would likely improve.

Now that you already know the derogatory marks can affect your credit score, it is best to avoid it while you still can. It is also better if you will focus on building a good credit score rather than hurting it because sooner or later, you will be the one who will suffer the most in the future.

Beginners Guide to Business Credibility

Beginners Guide to Business Credibility

In order to have a business that can receive funding, you must establish business credibility. There are about several rules that apply to anyone starting a business anywhere in the United States of America Here is the list of things you must do to establish business credibility:

Choose Your Business Name

Establish a Legal Entity

Purchase Virtual Business Address

Domain Name + Email Address

Business phone number + 411 listing

EIN – Employer Identification Number

Business Bank Account

Business Licensure

Business Merchant Account

We have a course that teaches you how to start your Establish business credibility and receive business credit and funding. Click Here To View or Purchase The Course.

We all know that starting up a business might be crucial and challenging. By any chance, everyone wants to have their own business – including you and me.

Starting a business means you need to have an extra source of income or just simply business is your passion and you are just into it. It also says that you need to prepare yourself for any possibility that would be considered as an outcome – either positive or negative.

Engaging in business acquires you to have a knowledge of certain products or services that you are marketing. Competition is everywhere and anytime in this line, and you have to be unique to be successful, you need to know every consumer’s need to be recognized.

To run a business, you need to be fully aware and see a lot of business terms which cannot be explained by a standard dictionary. You need to be resourceful to gain a lot of things you might need to know.

Being innovative is also the key to have a better output. If you are planning to start a business and increase its credibility, continue reading this so you will have enough understanding about this field.

One of the best things about starting a business is being able to choose what is a suitable name for your business. But it is not as easy as you think it would be.

Beginners Guide to Business Credibility Steps.

To start a business, you need to choose first your business name. Always select a comforting name or somewhat familiar that appeals to have pleasant memories so that consumers will respond to your business with an emotional level.

Do not ever give it a try for a business name that is too long and confusing. Stop yourself from those cute sound that only you, yourself can understand. Keep it simple, basic but will have an impact on customers.

Avoid any unusual spellings and make it easy to pronounce and remember. Make some sense and give the consumers a clue on what is your business all about.

If you want to have a great business name, start by considering the importance of the name in your branding efforts – because your name is the extension of your brand.

You might also want to consider getting inspiration from mythology and literature to sound unique but still presentable. Keep n mind that you can be able to trademark the name.

Be also specific and do not use any generic name that does not mean anything. Lastly, your business name should not be already taken. It is better if you prepare for at least three business name so that you are ready if the one you come up with is already made.

To check if your business name is already taken, go online first and check DTI’s e-Business Name Registration System or e-BNRS. Next, verify if your domain name or social media username is not yet taken.

Second, purchase virtual business address. A virtual office caters address and sometimes communication services for a fee, without providing dedicated office space.

It is different from executive suites and office business centers as they have their own physical office space and meeting rooms. A virtual business office is much cheaper than renting a physical office space.

For instance, if you have hit the roadblock and you have an online business, you need a business mailing address. But the main problem is you do not have a physical office since you are working from home.

Therefore, you do not have a mailing address that you can give to your customers – unless of course you give your home address to them, but that is not a good idea.

The thing here is, you will need a lot of official documents to have a business address. If you want to sound professional to your customers, it is a great idea to have an official sounding place of “residence.” So, here is the solution and a few options that you can choose from.

First is the private mailbox. This is the least expensive option so far where you can sign up to get a private mailbox number to your local post office. Sadly, your address will have a “P.O. Box” number on it.

Aside from that, you cannot receive any packages from other carriers such as UPX, FedEx, etc. which might be a big setback. The cost of this primarily depends on the physical size of the mailbox and the amount of time you need it for.

However, there is also a private mailbox from other places, such as PakMail and UPS, which may cost a little more than the usual but they do not have a P.O. Box number on the address and can freely receive any packages from all the carriers.

Your next option will be a virtual mailroom. This is where you can sign up with a service that equips you with a business mailing address in a specific city of your choice, and they will upload and scan the images of your mail to a secure website where you can view it yourself.

A virtual mailroom can cost a little bit higher than the private mailbox. But take note that it offers a more prestigious address and convenient service for your entire business. Earth Class Mail is one of the examples of a well-established virtual mailroom service provider, and it costs around $50 per month.

Last but not least is the virtual mailroom. This is the most expensive option you will have but take note that it provides all the features that a virtual mailroom offers along with other additional services like office space and conference room rentals and a virtual receptionist.

This means that not only a prestigious address you could have but also the ability to meet the clients and hold meetings in an actual office space in a prime location.

If you get to choose this option, you get a more professional and traditional image that would impress your customers. The virtual office is the most recommended choice as it does everything you need just like a real office do.

The most popular virtual office is the Davinci, and it has many locations. It starts at around $60 per month. Now that you already know that the virtual office is the best option that you have, the following are the steps on how to purchase it.

Step one is to find a virtual office solution. Step two, choose a physical location for your mailing address. Step three, pick and customize the services you need. Step four, purchase the service and step five is you need to complete the US postal form 1583.

The third one is you need to establish a legal entity. Legal entities refer to an association, partnership, corporation, proprietorship, trust or an individual that has legal standing in the eyes of the law.

A legal entity has a legal right to enter into a contract and an agreement, incur and pay debts assume the obligation, sue, and be sued in its rights and to be held responsible for its action.

A business entity is known to be an organization that is created by one or more natural persons to carry on a business or a trade. Some are considered for federal tax purpose to be not separate from its original owner.

There are three basic types of legal entities in which business can be administered:

(1) Sole proprietorship – it is a form of legal entity wherein the one and one and only owner are involved. No unique documents are needed to establish a sole proprietorship, and it is not even a distinct legal entity, separate from its owner.

Therefore, the owner is the only person that is liable for the debts and liabilities of the business, but the owner also has the right to control everything that is related to the business.

(2) Partnership – it is a form of business entity that is particularly owned by two or more persons. The partnership is not taxed as a separate entity though it does file an “informational” tax return and all the profits and losses flow through from the partnership to the individual tax return.

A general partnership, limited partnership, joint venture, and a limited liability partnership are the several types of partnership.

(3) Corporation – it is a separate legal entity by its shareholders, managed by a board of directors and operated by its officers. It is a big business to be exact.

There are several kinds of corporations, including S Corporations, C Corporations, Professional Corporations, Professional Associates, Close Corporations, and Limited Liability Companies.

Fourth, you need to have a business phone number and 411 listing. Communication with customers is an important thing. It is better that they will reach you easily for some question, clarifications and inquiries. Communication through a phone call is better than a text or chat.

It is way more precise than means of chatting through typing. Get a business phone number. It is an achievement and a step in the right direction for any entrepreneur or small business owners.

It shows professionalism, reinforces buying confidence for a potential customer and builds better brand awareness. Here are some steps to get a business phone number set up on your cell.

The first step is choosing your business phone number. You will need to decide whether it is a toll-free vanity number or a local one. The toll-free option is perfect for branding and it easy to remember for potential customers.

Check, your desired number for availability. You will need to see and check if the vanity number you prefer is still available. The second step is to create a custom greeting for your new number.

After you have reserved your number and created an account with Grasshopper, the next step is to record your preferred custom greeting. You can upload your custom greeting with your voice, or you might consider text-to-speech software if you want to have a random or different artificial voice.

The third step is to add extensions to your employees. This is absolutely a handy feature and Grasshopper offers you an unlimited number of extensions. These extensions can be used to forward your caller to the right person or department in your business.

The fourth step is to change your default voicemail message. Just like customizing your main greeting, it is better also to customize your away greeting or essentially your voice mail message.

This is what your customers will hear when you miss their phone call, and they are asked to leave a voice message. Step five id change your on-hold music. This is not necessarily music.

It is way better if you make your on-hold music to be some of your promotions and other features in your business. Lastly, test your new phone number or business number.

It is essential to test it first before handing it to your customers. You will also need to know how to answer phone calls professionally confidently. It is also a good idea to test it numerous times to see how it works.

So now you already have your business phone number with you, the next step you will do is to be able to list it in 411 listing. Here are the easy ways on how to get registered with a national 411 listing directory.

(1) Call your business’s local phone service provider – you can locate it in your business phone bill.

(2) You need to verify your authorization to make changes to your business phone account – the customer service representative will ask you several security questions that may include your account password.

(3) You can now request to the customer service representative to add your business phone number to 411 information directory – keep in mind that some local phone companies may, charge a service fee for making this change to your account.

Fifth is you should have a domain name and an email address. As per Wikipedia, a domain name is an identification string that defines a realm of administrative autonomy, authority, and control within the internet.

Domain names are usually formed by the rules and procedure of the Domain Name System. Any name that is registered in the Domain Name System is automatically a domain name.

It is a user-friendly naming system that allows you to quickly guide along the route of web servers and web pages. It is easy to use a domain name rather than type the whole IP address whenever you want to access a specific webpage – it is also easy to remember.

There are different types of domain names – Top Level Domain (TLD) which is the highest level in the Domain Name System structure in the internet, country code Top Level Domain (ccTLD), generic Top Level Domain (gTLD), internationalized country code Top Level Domain (IDN ccTLD), second level, third level and subdomain.

Getting a domain name acquires registering the name you want with an organization ICANN through a domain name registrar. There is also a certain registration fee for that service that costs around $10 – $35 each month. In business, having a domain name gives you credibility.

Only a few people are willing to do business with a company that does not own a domain name. If you get a domain name that is connected to your company, the tendency is people will easily remember the name of your site and can return to your site without having to consult their documents back.

It tends to give your website an aura of respectability. Keep in mind that you have to renew it annually for the same amount and also you will need a credit card or PayPal account for the domain name.

If you are wondering how to create an email address with your domain name, I will show you how. First, log in to your blog hosting control cpanel or control panel. Second, click on Email Accounts in the Email Section.

Third, enter the details for your new account and click Create Account button. Fourth, you will see a notification that you successfully created an account. An email address is also essential in starting a business it helps you to communicate easily with your potential buyers and even to your employees.

Sixth, you need to get an Employer Identification Number or EIN. It refers to a nine-digit number that is assigned by the IRS. It is primarily used to determine the tax accounts of employers and others who have no employees at all.

The IRS also uses this number to identify taxpayers who needed to file various business tax returns. Employer Identification Number is also known as Federal Tax Identification Number – and is used to identify a business entity.

All businesses need to have an Employer Identification Number. Here is the step-by-step instruction on how to get a business Employer Identification Number. (1) Determine your eligibility.

You may apply for an Employer Identification Number online if your principal business is located in the United States or U.S. Territories. The person that is applying online must have a valid Taxpayer Identification Number such as SSS, ITIN or EIN. Take note that you are only limited to one EIN per the responsible party, per day.

(2) Understand the online application. You must be able to complete this process in one session because you will not be able to save or return at a later time. Your session will expire after 15 minutes of inactivity. So basically, you need to start over.

(3) Submit your application. After all the validations are done, you will get your EIN immediately upon completion. You can now save, download or print your EIN confirmation notice.

Remember that you cannot register online for an EIN if the responsible party is an entity with an EIN previously obtained through the internet. But there also other methods for that and you may look on the internet if that happens.

Seventh is the business licensure. Business licensure refers to the permits that are issued by the government agencies that allow individuals to conduct business within the territory.

Licenses and permits are mandatory. Before you get excited about having a business, you need to compile those as soon as possible. The importance of a business license is to ensure the financial health of the young company is in good standing.

In addition to that, having a license allows the owner of the business to file for a yearly tax return supporting the legitimacy of the said business. Here are some examples of licenses and permits that you need to complete to operate a business.

(1) Fire Department Permit
(2) Air and Water Pollution Permit
(3) Sign Permits
(4) County Permits
(5) State Licenses
(6) Federal Licenses
(7) Sales Tax License
(8) Health Department Permits.

Now you already have an idea of what are the permits and licenses you need to complete based on your business; you may start working on it to start a business of your dream legally.

Eight, you need to establish a business bank account. Having a business bank account means that your business records are organized. Either small business or large company business, you need this business bank account.

With this, you can have certain taxes and deductions or can accept credit cards, you will look professional, and you will build a bank relationship. Always remember that it is important to separate our account from your business account.

All of the business – either big or small needs a system to manage its money. Business accounts are used to locate the cash balance, money owed to creditors, money owed to business and payroll paid to employees.

However, if you do not have this one, you may have difficulties in trading and managing your business successfully.

Ninth, you need to have a business merchant account to be able to gain potential customers who are fond of using credit cards and debit cards. If you wish to accept credit and debit cards, you need to have this thing called merchant account.

It is a bundle of services, software, and hardware that automates the process of accepting card information and transferring funds to the merchant through a readable micro-gold chip.

If you wish to increase your merchant account eligibility, I’ll show you how:

(1) Ensure a positive credit rating.
(2) always be honest about past and previous merchant account, liens, judgments, and bankruptcies.
(3) Be willing to pay higher fees or accommodate special account requirements.
(4) Shop around for the credit card processor that best suits your needs a merchant account is also established under an agreement between the merchant and an acceptor acquiring bank for the settlement of payment card transactions.

Beginners Guide to Business Credibility Continued.

In every business you wish to start or have it on your own, you need to consider a lot of things. Credibility is essential in the field of business. It is much like the respect that needs to be earned.

All companies, regardless of how small or big it is, need to display honesty and credibility to gain the trust of the customers. To be credible in your industry, you need to be trustworthy, be competent, be expert in your field, be consistent, be genuine, be sincere, be respectful, be accountable and be loyal.

Always be that someone who can analyze the situation and develop several possible solutions. Still, do your best at all times and do anything that you can do for your business to be successful.

Have your mind set in aiming your goal and focus on the things that you are doing. Credibility refers to the judgment that the audience and consumers make about how believable your business is.

If you gain credibility in your business, people will have trust in your products and services. They will go back to you again and again because they believe in the product and services that you are marketing.

As the trust company ages, credibility has meant to become everything. That included your credibility, the credibility of your brand, the credibility of your business and the credibility of the products and services.

There is no other way to substitute credibility – either a significant amount of advertising budget or a PR. Only your actions and the quality of products and services you are marketing will do the talking.

In that way, you will have numerous potential customer that will trust your products, and you will be a successful one in this industry. Do not be afraid to show what you can and always be open to the positive and negative feedback about your business.

With that, you will be able to know what is not right in your business and you will have the chance to enhance it. The customer is a big part of your business, always return some respect for them.

That concludes our Beginners Guide to Business Credibility. Did I miss anything? As a beginner do you completely understand how to start a business? Feel free to comment, like, share to let me know what you think. I hope this helps.

The Credit Analysis Process

The Credit Analysis Process

The credit analysis process is a very detailed study of a person or entities creditworthiness. An underwriter is the one who performs a credit analysis.

There is a high level of scrutiny involved because usually there are securities and sums of money being put at risk. If you want to purchase a home in America you will undergo the credit analysis process.

That is the reason you are asked to submit so many documents that verify your income, employment, bank statements, and identity.

Borrowing money from someone or from the bank companies requires self-discipline to be able to perform his/her obligation duly. This obligation means you are able to pay your debt off on time.

Paying your debts or balances on time is a massive part in building a good credit score. Your credit score will also determine if you will be able to get approved for a loan.

It will give the creditors a hint if you are a good payer or even a responsible one. Creditors do not just lend you money without having a credit profile check or a background check itself.

You will undergo a lengthy process. So, be always careful about your credit score because that really means a lot in yourself and in your living.

However, the credit analysis process will help the creditors to evaluate you as a borrower or your loan request or a corporate debt issue to determine whether you are capable of performing your financial obligations.

This means that it evaluates your credit profile so that they will decide whether you can pay off your debt or balances on the agreed period of time. Credit analysis is done by which one calculates the creditworthiness of a business, organization or a single person.

Credit plays a significant role in the modern economy and the global financial system. The expansion of credit has been a principal contributing factor to the global economic development, and it is often described as the lifeblood of the economy.

There is more to that definition that credit analysis process would be. It has a lot of works to do in credit analyzing.

If you think that borrowing money from the lenders is as easy as pie, think again. Nobody wants to have no guarantee of paying back when you owe something from someone most especially the money.

If you need to have a loan from bank companies, you have to make sure to meet all their requirements and qualifications about that matter. In that way, that would be easy for you to borrow money from them.

Borrow what you think you can afford to pay off. In return, you will avoid having trouble in the future. Also, borrow just for the projector thing that is worth it and will surely give benefits to you so that you will be able to pay back your accumulated money from the bank company.

Always be the disciplined one in every action you do especially in borrowing money from someone or from any bank companies because it will also affect your credit profile which will be shown in your credit history.

The primary objective of this is to determine the risk of default (which is called to be the credit risk) equitably to enable Credit Committees to take what is the right decision regarding the sanctioning of the credit facilities.

The precise measure meant of the risk of default not only helps in determining appropriate collateral security to alleviate the possible risk but also on deciding the right pricing for the chance. Credit analysis is also about the ability to identify the risks in a lending situation.

As per WallStreetMojo, credit analysis is a process of drawing conclusions from available data – both qualitative and quantitative regarding the creditworthiness of an entity, and making recommendations regarding the perceived needs, and risks.

It is also concerned with the identification, mitigation, and evaluation of risks associated with entity failing to meet financial commitments.

Here is the overall Credit Analysis Process:


(1) Proposal
(2) Inspection
(3) Financial Scrutiny
(4) Market Review
(5) Presentation of Proposal
(6) Sanction for Assessment
(7) Data Collation
(8) Analysis of various parameters
(9) Credit Rating
(10) Presentation for Sanction
(11) Terms & Conditions Established
(12) Proposal Approved

It is not definitely your attractive personality and deadly charm that makes you an excellent potential borrower.

There is something more to that story. The following are the 5 C’s that Credit Analysts are looking for:

(1) Character – this part is where the general impression of the protective borrowed is being analyzed. The lender forms an instinctive opinion about the trustworthiness of the entity to pay back the loan.

Background, experience level, market opinion, discrete enquires and other various sources can be a way to gather qualitative information, and then the idea can be formed.

(2) Capacity – lenders must be sure that the borrower can pay back the loan based on the agreed amount, terms and conditions.

As for the business loan applications, the financial institution reviews the company’s previous cash flow statements to decide how much amount of income is expected from the operation.

This is the most important of the five factors in the credit analysis process.

(3) Capital – it is known to be the borrower’s own skin in business. This is considered to be as a proof of the borrower’s commitment to the company. This is a measure of how much the borrower is at risk if the company fails.

Good capital goes on to build up the trust between the lender and borrower. The lender also evaluates a borrower’s capital level when regulating creditworthiness.

Most of the bank companies prefer a borrowed with a great quantity of capital because it merely means that he has some skin in the game.

(4) Conditions – it refers to the terms of the loans itself. Business lenders study and review requirements such as strengths and weaknesses of the overall economy and what the loan is all about also its purpose.

Financing equipment, working capitals, and expansions are the common reasons that are listed on the business loan application.

The lenders do consider various factors, such as macroeconomic condition, industry health, and currency positions before putting the requirements for the facility.

(5) Collateral – it refers to the personal assets guaranteed by a borrower as a security for a loan. It is also known as guarantees. However, guarantees are documents promising repayment of the loan for someone else if the borrower fails to repay a loan.

Getting enough collateral or guarantees as may allow fitting cover partly or wholly the loan amount bears immense significance. This is a way to eliminate the risks. Banks measure collateral quantitatively by its value and qualitatively by its anticipated ease of liquidation.

Each financial institution or companies has its own different ways and methods in analyzing a borrower’s creditworthiness, but the use of the 5 C’s of credit analysis process is common for both individual and business credit applications.

Segmentation of Credit Approval Process The individual steps in the process and their implementation has a noticeable impact on the risks together with the credit approval.

It is essential to take a closer look at the borrower’s economic and legal situation as well as the cooperative environment. The quality of credit approval processes depends on two factors, a transparent and comprehensive presentation of the risk when granting the loan on the one hand, and an adequate assessment of these risks on the other.

However, the level of efficiency of the credit approval processes is a vital rating element.

Due to the considerable differences in the nature of different kinds of borrowers, such as a private person, listed companies, sovereigns, etc. and the assets to be financed including residential real estate, production plants, machinery, etc. as well the significant amount of number of products and their complexity, there cannot be a uniform process to assess credit risks.

So, it is necessary to make a distinction, and this section entirely describes the principal criteria which have to be taken in to account in determining the differentiation regarding the risks and efficiency.

Probability of Default


The likelihood of default is the financial term that refers to the possibility of default over a certain extent. It administers an estimate of the possibility that the borrower will be unable to meet its debt obligation.

The probability of default is used in a variety of credit analyses and risk management framework. The likelihood of default or also knows as PD in abbreviation is a measure of credit rating that is assigned internally to a customer or a contract with the aim of estimating the probability of default within the year.

The likelihood of default is acquired through a process in using a specific scoring and rating tools. The scoring mechanism is an analytical instrument focused on determining the probability of default according to features of the contract-customer binomial.

It is used to approach the management of retail credit: consumer, mortgages, credit cards of individuals, loans for businesses, etc. There are different types of scoring: reactive, behavioral, proactive scorings and bureau scoring.

The main aim of responsive scoring is to forecast the credit quality of loan applications submitted by customers. It attempts to predict the applicant’s probability of default if the transaction were granted (they may not be BBVA customers at the time of application).

The level of sophistication of the scoring model and its capacity to adapt to the economic context enables it to incorporate more accurate customer profiles to the risk measuring tools and improve their ability to identify different levels of creditworthiness within specific groups (young people, customers, etc.).

The result is a significant improvement in the screening capacity of tools in groups of particular importance to the business. Right management of the reactive, behavioral, proactive and bureau tools by the Group allows gathering updated risk parameters adapted to economic reality.

This results in accurate knowledge of the credit health of operations and/or the customers. This task is indeed relevant in the current financial situation, as it allows identification of the contracts and customers that are in difficulties, and thus the necessary measures can be taken to manage risks that have already been assumed.

While rating tools are focused on wholesale customers: companies, corporations, SMEs, the public sector, etc., where the defaults are predicted at the customer rather than contract level.

The risk assumed by BBVA in the wholesale portfolios is classified in a standardized way by using a single master scale for the whole Group that is available in two versions: a reduced one with 17 degrees; and an extended one, with 34.

The master scale aims to discriminate the credit quality levels, taking into account geographical diversity and the different risk levels in the different wholesale portfolios in the countries where the Group operates.

The information provided by the rating tools is used when determining on accepting operations and reviewing limits. Some of the commercial portfolios managed by BBVA are low default portfolios, in which the number of defaults is low (sovereign risks, corporates, etc.).

To obtain the Probability of Default estimates in these portfolios the internal information is supplemented by external data, mainly from external rating agencies and the databases of foreign suppliers.

The probability of default is likely to be linked to the expected loss, which is defined as the probability of default, the exposure at default and the loss gave the default.

The likelihood of default is also the risks that the borrower will be impotent and evasive to pay off its debt in full amount or agreed time. There are a lot of alternatives for estimating the probability of default.

Default probabilities may be supposed from a historical database of an actual default using modern ways and techniques like logistic regression.

The likelihood of default is used along with the loss given default or LGD and the exposure of default or EAD in different kinds of risk management models to predict possible and potential losses faced by lenders.

To sum up, the higher the default probability, the higher the interest rate the lender will charge to the borrower.

Loss Given Default


Loss given default or simply LGD in appreciation refers to the share of an asset that might be lost if a borrower defaults.

It is a similar parameter in risk models and also a setting used in the calculation of the economic capital, regulatory capital or expected loss under Base II in banking institutions.

The loss of given default analysis has become compulsory for analyzing any kinds of credit. In an understandable and straightforward term, loss given default is the amount of damage incurred by a lender when the borrower defaults at a loan.

For instance, a bank, says HDFC, which lends $1 million to Ms. Craig to buy an apartment worth $1.2 million. The apartment is provided as collateral to the bank or mortgaged.

Before the actual disbursement and approval of the loan, HDFC performs due diligence on Ms. Craig’s credit profile.

It would check her past credit history and will review whether she has repaid her earlier financial obligations promptly, ensuring that her salary adequately covers the interest and principal payments on the loan, and determining the fair market value of the property.

Assume that Ms. Craig is fired by her employer. Since the loss of her job led to end her revenue stream, Ms. Craig defaults on her EMI’s.

In the absence of the new job and insufficient funds, Ms. Craig decides to get rid of the loan and give up the ownership of her newly bought house. Given the fact that Ms. Craig has defaulted, HDFC would then need to auction the house and use the proceeds to recover its loan amount.

Imagine that the prices in that area have declined undoubtedly, as a new construction are announced in other areas.

So, HDFC will be able only to recover $900,000 from the sale of the house. In this scenario, the bank would be able to recover 90 percent of its loan amount. So, the loss given default will be 10 percent.

Loss given default is known to be another of the key metrics used in quantitative risk analysis. It is exemplified as the percentage of the risk of exposure that is not expected to be recovered in the event of default.

Similarly, it can be useful enough for determining the estimated value of a non-performing portfolio in the hypothetical event of outsourcing its recovery or prioritizing possible recovery actions.

Exposure at Default


Exposure at default or EAD is the total value a bank exposed to when a loan defaults. It is also the parameter used in the calculation of economic capital or regulatory capital under Base II for a banking institution.

It can be defined as the gross exposure under a facility upon default of the obligor. Exposure at default is also known as the amount that a bank exposed to at a time of default of its borrower.

As a company goes towards its default, it will basically attempt to increase its leverage. This is logical because the reason is generally a liquidation problem.

Liquidity is an excellent ability to fulfill the short-term financial obligation. A company has a good cash flow if its liquid assets are worth more than its short-term liabilities.

The exposure at default model will look at the company’s ability to increase its exposure while approaching the default. It is another input required to calculate expected loss and capital.

It is also defined as the outstanding debt at the time of default. The exposure at default is acquired by accumulating the risk that is already drawn on the operation to a percentage of an undrawn risk.

Now that you already have the knowledge about the three types of defaults, you need to study well before having a credit loan. Every action you will make needs a similar study to have a positive output.

Securing a loan through the bank is not only about getting the borrowed money. In that case, you are being checked. Your identity and your credit score will also be verified.

Also, you need to understand and analyze how the credit process works. Credit process is the process of evaluating an applicant’s loan request or a corporation’s debt the issue to determine the likelihood that the borrower will live up to his or her obligation.

In other words, the credit analysis process is the method by which one calculates the creditworthiness of an individual or an organization. Here are the steps during the information collection stage.

(A) Collecting information about the applicant – The first step in credit analysis is to obtain data of the applicant regarding his/her past record of loan repayment, character, individual and organizational reputation, financial solvency, ability to utilize the loan, etc.

The bank may inquire into the transaction record of the applicant with the bank and other banks. The repayment history of loans previously granted may also reveal useful information in this regard.

(B) Collecting information about the business for which loan is required – The loan officer should know the purpose of the loan, the amount of the loan and if it is possible to implement the project by that amount.

The banker should make sure the project is feasible. It is crucial that the project has good potential and the applicant has a good plan to execute the project.

(C) Collecting information about the recovery process – The loan officer should obtain information about the sources from which the borrower would repay the loan.

Information for this purpose may include the profitability of the project, the payback period, the sensitivity of the project cash flow to different economic factors, etc.

(D) Collecting information about the security – Banks, most often than not, lend money against personal and non-personal securities.

A bank would always prefer getting the loan repaid by the borrower to realizing the loan from the sale proceeds of the security. However, should the borrower default in repaying the loan the lender will have to fall back on the security.

Hence, it is always advisable to know information like price stability, etc. about the security before advancing the loan.

(E) Collecting additional information if needed – When the loan under consideration is for a significant amount a bank may find it necessary to gather further details like the overall business activities in the economy, probably political and economic condition of the country, efficiency, and candidness of the management team, likely effect of local and international competition on the project, etc.

The following are the steps during the information analysis stage:

(A) Analyzing the accuracy of information — The information given in and along with the application is analyzed to judge their accuracy.
In this regard, the analyst would scrutinize the national identity card, driver’s license, trade license, partnership deed, corporate charters, resolutions, and other legal documents attached with the application.

(B) Analyzing the financial ability of the applicant – In this stage, the financial strength of the applicant is taken into consideration. The financial solvency of the applicant and his skill and capability are essential factors in this regard.

(C) Analyzing the effectiveness of the project – One aspect of credit analysis is the analysis of quality, purpose, and future prospect of the project for which loan has been applied. The banker will be at ease to grant loans if the project is productive, expandable, and of course profitable.

On the other hand, if the project is in a declining stage, is up against the intense competition, or is confronted by adverse conditions the bank is likely to be reluctant to grant any loan.

(D) Analyzing the possibility of loan repayment – The analyst looks at what effect the proposed loan will have on increasing the liquidity and income of the applicant.

The net cash flow is a good indicator of the ability of the applicant to repay the loan along with interest and other expenses within due time.
An analyst may also be interested to see the- interest burden and fixed charge burden of the applicant.

The third step would be the decision-making stage – Depending on the analysis the analyst identifies and measures the credit risk associated with a loan application and determines whether the level of risk inherent is acceptable or not.

If the analyst is satisfied that the risk is acceptable and is convinced that the loan will be repaid, he/she prepares and submits a recommendation to the appropriate loan approval authority for sanctioning the loan.

It is tough to lend money nowadays, even some of your family, friends, and colleagues cannot be fully trusted when it comes to money matters. As a lender, you need to have a lot of patience and absolute trust in the borrower.

That’s why credit analysis process takes its place to the next level to assure that the borrower has that capacity to repay what he or she accumulates. As a borrower, you also need to study a lot of perspectives and views to know what process you would be in.

So, always make sure that your project for the loan is worth the price and most especially worth the effort. The credit analysis process accumulates a lot of time. So, it is better if you borrow what you think is worth it.

Credit Report Scoring Factors 101

Credit Report Scoring Factors 101

Your credit score is calculated in the following:

Payment history- accumulates 35 percent of your credit score.

Credit utilization is 30 percent of your credit score.

The length of your credit history – is 15 percent of your credit score.

Applying for new credit or having an inquiry – is 10 percent of your credit score.

The types of credit you used – are also 10 percent of your credit score.

Take our free course for a quick refresher Credit Report Scoring Factors Course.

We all know that some of our decisions might always affect our credit score, from opening an account too late payments. If you have a goal to reach an individual score or just want to learn more about credit scores in general, it is essential to know which factor might have a good or bad effect to your credit score and how your actions could hurt or improve your creditworthiness.

In this article, you will be able to track which factors are essential and which only have a minor impact in your credit score. Your credit score is a vigorous number that affects your life now and in the future, in many ways that you may not even imagine.

Your score determines interest rates you pay for loans and credit cards and helps lenders to decide whether you even get approved for those loans and credit cards in the first place.

Paying our bills on time helps you avoid late fees and also helps your credit score to be healthy. A good payment history shows lenders that you have a record of paying on time. And the longer, the better.

Having a late payment or missing payment can negatively affect your credit score as do any collections, bankruptcies, and foreclosures. Protecting and building your credit score is more important than anything else and how you handle the following five factors can make a difference in determining your credit score.

First, your bill payment history. Your payment history concludes 35 percent of your credit score. Actually, how timely you pay your bills affect your credit score more than any other factors.

Some payment issues, like collections, repossession, charge-offs, bankruptcy, foreclosures or tax liens can devastate your credit score, making it almost impossible to get approved for anything that simply requires excellent credit.

The best and simple thing you can do for your credit score is to make your payments on time and complete each month. Having a long history of paying your balances on time is best for your credit scores while missing a payment can hurt them.

One of the best ways for borrowers to improve their credit score as a whole is by making timely, consistent payments. Second, your level of debt matters. Your level of debt determines 30 percent of your credit score rating.

Credit scoring calculations, such as the FICO score, look at some key factors that are related to your debt. The amount of overall debt you carry, the relation of your loan balances to the original loan amount and the ratio of your credit card balances to your credit utilization or credit limit.

As a protocol, you should keep your credit limit or credit utilization at 30 percent or less, meaning you should only charge up to 30 percent of any card’s available limit.

Having too much debt or high balances can hurt your credit score rating too bad and profoundly affects it. But the good news is that your credit score rating can improve as you pay down your balances.

Credit usage the is also a fundamental factor, and it is one of the few that you may be able to change to improve your credit health quickly. The amount of installments loan you owe – such as mortgage, auto loan, student loan or personal loan is part of the equation.

On the other hand, even more, significant is your current credit card utilization rate. Your credit utilization rate is the ratio between the total balance you owe and your total credit limit on all your revolving accounts – both credit cards and lines of credit.

A lower utilization rate is better for your credit score. Maxing out your credit cards or leaving some part of your credit balance unpaid can hurt your ratings by increasing your utilization rate.

According to Sarah Davies, the senior vice president of analytics, research and product management at VantageScore, says that for credit scores, your overall and total utilization rate is more critical than the utilization rate of a personal account.

However, utilization rates on an individual account can also affect your credit scores. This means that you should pay attention to not just your overall credit utilization, but also the use of personal credit cards alone.

Having too many accounts with unpaid balances might indicate that you are a riskier bet for a lender. Always keep n mind that you can pay your balances in full each month and still appear to have a high credit utilization rate.

The calculation uses the balances that your credit card issuers report to the bureaus, frequently around the time it sends you your monthly statement. You may have to make an advance or early payments throughout your billing cycle if you want to use a lot of credit and maintain a low utilization rate.

The importance of a category or a data point depends merely on the credit scoring model and your overall credit profile. For instance, opening a new account could have a more meaningful impact on someone who is new to credit than on someone with decades of credit history.

Third, the length of credit history. How old is your credit account? The age of credit is 15 percent of your credit score. It also considers both the age of your oldest account and the average age of all your remaining accounts.

Bearing an “older” credit age is better for your credit score because it really shows that you have a lot of experience in handling credit. Opening a new account or closing existing accounts can lower your average credit age.

So, basically, it is not a good idea to open numerous reports at once. Opening a new account could have the possibility to lower down your average age of accounts, which may badly hurt your credit score.

However, the hit to your scores could also be more than compensate by lowering your credit utilization rate and by increasing your total credit limit. Always make sure to make on-time payments to the new card and adding to your credits mixes.

Closed accounts can stay on your credit report for up to ten long years and increase the average age of your mind at that time. Once the account drops off your credit reports, it could lower this factor and a total possibility to hurt your score.

The impact could be more significant if the statement were also your oldest account. It is impossible for a person who is literally new to credit to have a perfect credit score, but it does not necessarily take long to achieve a high credit score.

A longer credit history provides more information and offers a better picture for long-term financial behavior. To improve your credit scores, if you d not have a credit history, you should begin using credit, but if you already have a credit, you should maintain long-standing accounts.

The age of your oldest account, the age of your newest account, the average age of your accounts and whether you have used an account recently – these are the variety of factors related to the length of your credit history that can affect your credit.

Fourth, the credit mix and types. There are two types of credit accounts exist the revolving accounts and installment loans.

Bearing both types of accounts on your credit report is better for your credit score because it determines that you have an experience managing different kinds of credit.

Having both types of credit – revolving credit card account and installment loans may help you improve your credit health. Since your credit mix is only a minor factor, you probably should not take out a loan and pay interest to add up to your credit mix.

But if you have only ever had installment loans, you may want to open a credit card and use it for some minor expenses that you can just afford to pay off each month.

It is even better if you have loans for different types of assets, such as a home or a car, in addition to credit cards, and maybe a personal mortgage or student loan.

Types of credit only comprise 10 percent of your credit score, so not having a particular kind of credit account, such as installment loan, would not devastate your score.

Fifth, the number of credit inquiries or your recent credit. The creditors may review your credit reports and your credit scores when you apply to open a new line of credit.

A record of this is known as an inquiry – which can stay on your credit report for up to 2 years. Soft questions, like those that come from checking your own scores and some loans including credit card pre-qualifications, do not hurt your ratings.

Hard inquiries are when a creditor checks your credit card before making a lending decision, can hurt your credit score even if you do not get approved for a credit card or loan.

But frequently a single hard inquiry will have a minor effect. Unless there are any other negative marks, your score could recover or even rise within just a few months.

The collision of hard inquiry may be more significant if you are new to credit. It can also be greater if you have numerous hard questions in a short period of time.

Each time you submit an application that needs a credit check, an investigation is placed on your credit report showing that you have made a credit-based use.

One or two inquiries would not hurt that much, but having numerous questions, especially within a short period of time can cost you many points off of your FICO score.

Always keep your application to a minimum to preserve your credit score. Do not ever be afraid to shop for loans, though. Credit scoring models recognize that consumers just only want to compare their options.

So having multiple inquiries for an auto loan, student loan, and mortgages from a single 14 day to 45 day period, depending on the loan and credit scoring model may be treated as a separate inquiry when calculating your credit score.

Some factors are commonly thought to influence your credit score, but they do not, not directly at least. Information like income, employment status, and bank balances can impact your ability to get approved, but they do not actually factor into the algorithm that calculates your credit score.

Marital status, age, and debit or prepaid card usage also do not influence your credit score.

There are numerous credit scores, and you may not know which one a lender is going to use when considering your application for something.

However, consumer credit scores, which are determined based on the application in your consumer credit reports, weigh factors in the same manner. If you focus on improving these factor, you could improve your credit health across the board.

Your credit score is calculated based on weighing information in your credit report. Although there are numerous scoring methods, most lenders use the FICO method also known as Fair Isaac Corporation.

The three main bureaus such as Equifax, Experian, and Trans Union worked with Fair Isaac as early as 1980’s to come up with the scoring method. A credit score is determined just like a grade in the school.

Think that how your teacher calculates your degrees by taking down your scores from tests, quizzes, attendance, homework and anything else that they want to use, weighing each one based on the importance, to come up with a final, single-number score.

It is just the same with the credit score. The difference is instead of using the score form pop up quizzes and papers, it uses the information in your credit report.

Your payment history is the most significant influencer on your credit score. It is precisely what it is sound like – the record on your credit reports of whether you pay your bills on time or not.

The amount of debt you carry is the second largest influencer on your credit score. Having a little amount of debt would not damage your scores, but you do not want to max out your credit cards if you are trying to improve your credit score.

The general rule is to keep the amount of debt you owe on your credit cards below at least 30 percent, ideally 10 percent of your credit line.

How long you have managed credit is one of the determiners of your credit score that you have very sufficient control over, as time is the biggest influencer.

This aspect of your credit score considers the age of your accounts, not your age. The various types of accounts that can appear on your credit profile are called your credit mix – which makes up about 10 percent of your credit score.

Revolving credit means you can have different payments each month based on a balance, like credit cards. While installment loan means a loan that has a fixed amount over a given period of time like mortgages and student loans.

Keep in mind that there is no “ideal” version of a credit mix. As what is right for you might not works as well with someone else credit profile.

It is not essential to have each one, but it is such a good idea to have a variety to show that you can manage responsibly different types of debts. The number of credit inquiries you make is basically a tracking whenever your credit reports are pulled.

This means that whenever your consumer credit file is reviewed, for a loan application or new credit card, it is primarily documented and this tells lenders how often you are shopping or purchasing for a credit.

There are a lot of myths about a credit scoring. But hopefully, I can make you understand the FICO scoring. In that way, you will be able to take action in building your credit score.

FICO is the most used method regarding scoring by the lenders. Understanding the secret ingredient can help you make a good score and create a healthy credit report.

A 700+ score and a robust credit report will help you keep the rest of your financial life cheaper by enabling you to get lower interest rates on loans and get approved for the top-tier financial products.

Making on-time payments could possibly get you being rewarded for it, and missing payments could lead you to punishment. Not all late fees are created equally.

If you are less than thirty days late, your missed payment will likely not reported to the bureau. Although, you are still subject to late fees and potential risk risk-based repairing, which can be very expensive.

Once you are thirty days late and over, you will be reported to the bureau. The longer you go without paying, the more significant the effect on your score. Sixty days late is apparently worse than thirty days late.

It can take anywhere to sixty to one hundred ten points off your score. The amount you owed is a part of your credit score. This part will look how much debt you have.

Your credit report uses a statement balance. So, even if you pay your credit card statement in full each month, it would still show as debt in your credit report because it uses your statement balance.

Utilization is such an important concept because if you utilize of credit made available for you or only your credit limit, it is like you do not have self-restraint.

Maxing out all your credit card is a big warning to lenders. If you are able to control yourself and restrain from purchasing too much, then you are showing discipline.

The key to having a good credit score is having a lot of available credit and not using it. It may sound strange but, I know, but that is the key to it. The easiest part of the credit score to get right is the length of credit history.

As long as you do not close your accounts, every day this part of your score improves – because all of your accounts become one day older. FICO will take a look at the age of your oldest account and the average age of all your accounts.

The most substantial product is the credit card. If you have your credit card with you and you manage it well, then sooner or later you will be rewarded in this.

Always remember that there is no greater temptation than having a credit card. If you withstand the temptation of it, you get the most point.

Lastly, if you get to open up a numerous credit card accounts in a short span of time, you will be sending a warning signal to the credit bureau. But this part of the credit score scares a lot of people.

They are frightened to shop for the best deals, simply because they are afraid of what shopping for credit would do to their credit scores.
Given the fact that your credit score is the most critical number in your daily life, you should keep it healthy to have a comfortable experience.

Your credit scores are used for determining interests, for loan application and approvals, and insurance rates, when screening for employment and rental applications and determining eligibility for cellphone contracts.

But not everyone knows how credit scores are determined, and this is essential to understand. Your credit score is calculated in the following:

Payment history accumulates 35 percent of your credit score.
Amounts you owed is 30 percent of your credit score.
The length of your credit history is 15 percent of your credit score.
Applying for new credit or having an inquiry is 10 percent of your credit score.
The types of credit you used are also 10 percent of your credit score.

It is essential to have knowledge when it comes to computing your credit score because how you can maintain a good credit score if you do not know what the factors that might possibly affect it or not are.

Your own credit score is a valuable part of your financial picture. The lenders used to combine your credit score with the information in your credit report to assess your risk as a borrower.

If you have a high credit score, then it looks like you are less of a chance, but if you have a low credit score, there is a full possibility that lenders will question your ability to pay the amount you owe on time.

Credit history is also an important thing to consider. Not only for the obvious stuff like qualifying or get approved for a loan and getting a credit card, but also for less obvious things like renting a car, cellular telephone services, and perhaps even getting a job.

So it is vital to maintain or take good care of your credit score. It is already given that nowadays, loans are a necessary part of life for the most of us.

Building a solid credit history has a significant impact on your life now and in the future when you are considering to apply for a loan or even a prepaid debit card.

These days, good credit is used for more than just getting a credit card or loan. More businesses are making the case that you must have good confidence before they extend to you their products or services.

I hope that this article helps you understand what factors are in to be able to calculate a credit score. This article also helps you to know what are the things you need to do to achieve a healthy credit’s score.

You should always bear in your mind that having a good credit score is still better and hassle-free than having a bad or low credit score. With a good credit score, you can be able to enjoy your life comfortably and efficiently.

You do not need to worry about everything that is connected with credit, and you can have all the good deals in your life when you have it. Sounds exciting and challenging, right?

So, you need to work hard for it because no one else will enjoy it but you. You will only be the one who will appreciate its full benefit. Most of the things in your life now are already connected in your credit score.

So be careful in every decision and actions you are going to make in the future because it will always have a positive or negative effect on your living. It is not wrong to buy the things you want but always makes sure that you will think first if you are capable enough to pay it off when the due date comes.

In that way, you will not hurt your credit score. Self-restraint and self-discipline is also the key to this matter.

How To Increase Your Business Credit Scores

How To Increase Your Business Credit Scores

Business credit scores are increased simply by paying your bill(s) early. The same rules apply when issued credit on the personal side. Keep your credit utilization low and pay your balance in full when you can. Never pay late. If you must carry a balance pay on time.

Aside from having a personal credit score, your business has its own credit score also. It is a track of record of a business’s financial responsibility that creditors, companies, or financial organizations used to determine whether your business is a good candidate or not to lend money to or do business with. Building a business credit score is important of growing a business.

Having a good credit score can enable you to easily acquire financing, protect your personal credit and increase the value of your company. A strong business credit score can help you grow your business. Numerous investors, banks and companies rely on your business creditworthiness when setting loan terms, increasing lines of credit, determining insurance premiums and considering you as a viable partner.

Anyone can see or view your business credit score and it is not confidential so avoid insufficient and delayed financing which is the second most common reason for business failure. Numerous advantages are evident in such business credit cards including a higher credit limit. Creditors offer a better interest rate to businesses with a good credit.

You can obtain business credit without a need for a personal guarantee. This will help you reduce your personal liability and will protect your personal assets. It can help you stay ahead in the competition that you are in.

Business credit scores are increases simply by paying your bill(s) on time, or early. We have a course that goes into much more detail of how to build business credit and increase your business credit scores. By following the link you will access our premium course. Build Business Credit.

Business credit is also known as commercial credit. A business credit is scored on a 0 to 100 scale while personal credit score has a range of 300 and 850. Just the same with personal credit score, the higher the score, the lower the lending risk will be.

As an individual person, you will push yourself to reach a close credit score to 850, as a business owner 100 is the magic number.  It is important to build a good business credit from the start receive better loan terms, interest rate and negotiation leverage on payment periods with suppliers. Most of you are wondering who scores the business, right?

Well, there are three major business credit scoring bureaus which include Dun & Bradstreet, Equifax, and Experian. Each agency uses different methods in calculating a credit score, you cannot guarantee that your score will be identical across the board. But you can expect that there are all in the same general range.

Dun & Bradstreet uses PAYDEX, a score which ranges from 0 to 100 based on the payment history information Dun & Bradstreet has on file. The higher the score you get, the better your payment performance is. The Dun & Bradstreet PAYDEX score is their unique dollar-weighted numerical indicator of how a firm paid its bill over the past year, based on trade experiences reported to them by different various vendors.

The Paydex score is calculated based only on one single factor. Whether a business makes a payment within the agreed period of time to its suppliers and creditors. While a Delinquency Predictor basically predicts the likelihood the company will pay in an extremely delinquent manner during the next twelve months. Your Delinquency Predictor Score is used by the customers, suppliers, and banks to make decisions about your company or business.

Having a lower risk of Delinquency Predictor Score means you have a better chance of securing credit with your suppliers. The Delinquency Predictor Score is Dun & Bradstreet’s proprietary metric in evaluating the likelihood that a business will be extremely late in paying at least 10% of dollars owed, cease operations without satisfying its debt over the next twelve months and seek legal relief from creditors.

If there is a Delinquency Predictor Score, there is also a Financial Stress Score which goal is to predict the likelihood of business failure within the next twelve months. The score will range from 1,001 to 1,875 where 1,875 represents the lowest probability of business failure. This can be lead into filing for a bankruptcy.

A business or a company that has is financially stressed has ceased operations with a loss to creditors ceased operations following assignment of bankruptcy, is in receivership, reorganization, or has come up to an arrangement that is favorable and benefits the creditor and voluntarily withdrew from business operation leaving unpaid obligations.

The Dun & Bradstreet Supplier Evaluation Rating will conclude business operations or become inactive over the next twelve month period based on the predictive data attributes available of the business. It is easy to use risk metric that aims to help supply management professionals to assess the long-term risk of having a business with the supplier. The SER score ranges on a scale of 1 to 9, with 1 being the lowest level of risk and 9 being the highest level of risk.

The Supplier Evaluation Rating caters the most consistent risk ranking across the global. A strong Supplier Evaluation Rating or score can help win and maintain contracts. In order to keep your business in a lower risk perception and scale, there are several elements you need to pay attention to.

First is the payment management. How you pay off your invoices can have a positive and a negative effect on your Supplier Evaluation Rating. Refrain from paying off your balances late and if possible pay ahead of the due date for a maximum influence.

The second one is the company information. Various changes in your company operation either minor or major can impact your business’s Supplier Evaluation Rating score. New changes in the company management, an increase or decrease in the number of employees can factor into your SER rating.

The third is the public records. Any number of judgments, liens, lawsuits or bankruptcies can have a serious and negative impact on your SER rating. These types of records can signal that the business is having a financial shortage or trouble.

The fourth one is the financial standing. A business with an intact financials can be typically considered to be much less of a risk. Any changes made on your financials can trigger an impact to your SER scores.

So, you need to be extra careful in taking steps or making a room for changes as it will have a possible hit or damage in your Supplier Evaluation Rating.
In Dun & Bradstreet, there are numerous ratings that you need to consider in taking various steps in your business. In addition to the listed ratings above are the D&B rating and D&B Viability Rating.

Dun & Bradstreet Rating are ratings assigned to businesses that have supplied Dun & Bradstreet with a current financial statement. The D&B Rating can help you immediately determine a firm’s size and composite credit appraisal, based on the company’s fiscal or interim balance sheet and an overall evaluation of the firm’s creditworthiness.

A D&B Rating is a type of credit score which is used to assess the creditworthiness of a small business. Some of you might not be familiar with business credit score compared to the personal credit score. But they are with looking into if you are one of the business owners whether you check the current company’s status or check up a potential business partner.

Dun & Bradstreet actually offers numerous types of small-business credit scores. For instance, D&B Credit Rating, which measures overall business risk, Delinquency Predictor Score which measures the likelihood of non-or late payment or bankruptcy, Supplier Evaluation Risk Rating which measures the 12-month survival odds, Financial Stress Score which measures pressure on a companies balance sheet and the likelihood of shutdown within twelve months and lastly, the Credit Limit Recommendation which measures the borrowing capacity.

On the other hand, the D&B Viability Rating is a newly made evaluation tool that offers an extensive assessment of whether or not to do any business of a certain company. Only the Dun & Bradstreet Viability Rating sums up the most comprehensive measures of risk to deliver a most reliable rating analyzing the current and future health and growth of a business.

It is also a multi-dimensional rating that carries an exceptionally perceptive and reliable assessment of a company’s future viability. There are specific components of the D&B Viability Rating which are Viability Score, Portfolio Comparison, Data Depth Indicator, and Company Profile. Viability Score and Portfolio Comparison predictive rating range from 1 to 9 where 1 is the lowest probability of going out of business or inactive for the next 12 months compared to the other businesses.

Data Depth Indicator is a descriptive rating from A to G and H to M, where A is assigned to businesses with the highest level of predictive data including extensive commercial trading activity, compete for firmographics and comprehensive financial attributes while G is assigned to business with the lowest level if predictive data including simple identify data only.

Letters H to M is a special category that overrides the A to G rating giving their customers further insight when Dun & Bradstreet has a confirmation that a business has met one of six risk conditions. Lastly, Company Profile is also a descriptive rating from A to X and Y to Z.

Where A is being the largest, most established business with complete, comprehensive data reported in the D&B database while X is referred to the smallest, youngest businesses with basic firmographic data only. Y is assigned to a branch location and Z is assigned to a business that is a subsidiary.

Intelliscore PlusSM from Experian is a statistically based credit score with a 1 to 100 rage that takes numerous factors into account such as payment history, years in business and nee lines of credit opened. Intelliscore Plus is a business credit score created by Experian which is a credit reporting agency.

The score will range from 0 to 100, with a score of 76 or higher it is already considered a good score. Experian uses a variety of factors to determine your score including public and legal filings, credit history, and industry data. It is known as the Experian’s strongest business risk score.

It allows you to identify the risky accounts with pure confidence. Experian’s Intelliscore PlusSM is a predictive powerhouse that uses advanced statistical techniques to give you an unparalleled view of the business. It also allows you to expedite your decisions about credit by accessing their wide range of collection, trade, firmographic data, and public record.

Intelliscore PlusSM by Experian is considered the top contender in any credit-related score that will totally help you in your difficulties related to it. It predicts the likelihood of a serious credit delinquency within the next twelve months.

FICO Liquid Credit Small Business Scoring Service is recognized and considered as the industry leader in evaluating the risk of US small business credit applicants. FICO means Fair Isaac Corporation that is commonly correlated with personal credit scores, but it also issues a small credit score. It is widely used by the SBA, banks and other lenders.

It ranges on a scale from 0 to 300 which basically the higher score, the better. The minimum score to pass the SBA’s pre-screen process is 140 at the present time. The FICO SBSS gives small businesses credit grantors an exceptional ability to score virtually of any type of credit obligation they want. Their scores are merely used lines of credit, term loans and commercial loans up to $350,000 from the SBA.

Above are the explanation about the different companies that could help your business establish a good credit score. If the personal credit score is important to make yourself comfortable and have a good means of living when you are into business, the business credit score is also important.

It is a huge help for your business or company to have a good credit score so that you do not have any problem when it comes to loans and other things you might be needing in the future. Having a good business credit score will make your personal credit be protected and it will increase the value of your company. Always do an examination of your business credit score from time to time, ensuring that there are no errors.

As you can see there are many factors to a business credit score. There is no true standard for decoding the scores. Underwriters are the ones who ultimately determine what kind of credit and funding a business gets approved for.

The DIY (Do It Yourself) Credit Repair Process What is it?

The DIY (Do It Yourself) Credit Repair Process What is it?

The DIY credit repair process is when a person embarks on the credit repair journey on their own.

We Teach You How To Do IT Yourself With This Course.

In America today, living with bad credit is possible but I do tell you that it is tough. Having bad credit makes a lot of things difficult and impossible. It cannot get you to buy a new house, a car or even make a loan when you needed it the most.

It also brings hassle in yourself rebuilding it because it does not only takes a couple of days and weeks, but it takes a month in restoring it. While a better and good credit score opens up a lot of good things like employment opportunities and promotion.

A good credit score can make your life and your lifestyle livable. You might probably see credit repair advertisements on televisions or even heard them on the radio. But you do not need this professional to fix your own credit score.

The truth is you just need yourself in repairing your own credit score. Instead of hiring a credit repair company, just save your money. Improving your credit can help you save money, but it really takes time and patience for researches and implement what you have learned.

Bear in mind that it would take months to repair your credit in your own and you need to communicate with the creditors one by one. Don’t fall for their sweet words and promises that they will repair your credit card fast, easy and overnight – nobody does it before up to now even big credit repair companies. If you really want to fix your own poor credit, you can, and you should do it by yourself.

If you had a past overdue loan, years of significant credit cards balances, a foreclosure, and even a collections accounts, you probably have hit a below average credit or a total lousy credit. Having a bad credit score, you may not be able to get approved for a new credit account.

Although you may still be able to avail auto loan or mortgage, you will pay a much higher interest rate because of your poor credit score. Remember not to settle for scams promising a smooth and overnight credit repair. You can do it yourself. It is the total money saving decision if you have decided to do it on your own.

Doing it yourself might be confusing at times but always remember that everything you do in life or actions you do contains hardships and patience. You make sure that you go to every possible detail of it. Another thing to be reminded of is to use a different kind of highlighters to highlight relevant information and disputes if there are any. Here is some Do-It-Yourself credit repair process:

First, you should figure out where you stand. Before doing any do-it-yourself credit repair, you need to collect and get copies of your full credit reports and histories from all the three bureaus. To begin with, you need to know what you need to repair.

Getting your credit reports from these three bureaus are genuinely free. You can get it at www.annualcreditreport.com. Be careful on other websites that claim to offer a free credit report as the Federal Trade Commission (FTC) warns that this kind of offer is deceptive. You might also want to try free credit score tracking applications like Credit Sesame or Credit Karma.

Secondly, if you think you find an error, dispute them. When it comes to this matter, mistakes are not common, but they do happen. Of course, bad credit is just, your fault. You should never try to argue information accurately, but if you arrive to see errors – even the small ones, clean it up.

Here’s how to do it: If you have already the copy of your full credit report in hand, check first your identity information such as Social Security number, the spelling of your name and your address. Do also check your credit history. Next, review your list of credit cards, your outstanding debts, and your significant purchases.

If you see questionable items or if you found any mistakes, make a copy of the report and highlight all the possible errors. You also need to gather all and any information that you need to back up like bank account statements. This is very important!

You need to have proof because the bureaus won’t make any move if you do not have one. You must write and explain the mistake along with your documentation. Because of high technology, specific bureaus let you allow to send the disputes online.

You can submit it to them through the provided email but do not forget to have a copy for yourself. Thus, the reporting agency has a 30 day period to respond to your matter. According to experts, through the mail is the best way to send your disputes.

In the United States of America, there are credit repair companies that are called “The Big Three” merely because they already proved something and gained the trust of many Americans. These companies are the Experian, Trans Union, and Equifax. They will investigate and verify all the reports via email, via fax and via creditors itself.

Third, you need to stop the bleeding. You know yourself that you are rebuilding your credit score from bad credit. So, you need to ensure that you are not spending more than you can afford. Be reminded that there are three simple ways to do to repair a bad credit such as pay your bills on time starting now, pay off your debt especially credit card debt and do not apply for new credit.

To do these things, you can have yourself budgeting first and do not spend more than the amount you earn for each month. To know how much is your extra money, you need to start reviewing your tax return for the past two years to get how much you can actually have in a year. Then, subtract your monthly expenses such as house rentals, car payments and other insurances from your current income.

Next is, jot down your monthly spending habits such as gas, entertainment, and groceries. You need to start creating your limit when it comes to your monthly fixed expenses to save more money. For example, if you are spending $300 for groceries, try reducing it to $200 instead. There are ways on how to reduce it like buying stuff or products that are on sale, using coupons, buying generic brands and resist to buy branded products that you do not totally need.

Fourth, start paying all your bills on time. If you are really serious about fixing your bad credit score, you have to start in paying your bills on time, period! No other reasons even if it is a valid one. You need to assure that you pay them just on right time. Make a way on how you can pay for it.

Fifth, you need to pay down your credit card balances. If you have any credit card balances, consider making a room to pay down your debts little by little each month until you do not have any obligations to pay in your credit card.

You need to know how much credit limit you have and do your best to stay under your maximum limit when purchasing something. That is because all credit bureaus analyze your debt as a ratio. The lower the amount you charge in your credit card, the better than maxing out your limit. Pay these credit card and credit card debts bit by bit but remember that do not cancel them. It will affect your credit score.

Finally, do resist the temptation of applying, getting and having a new credit card even when the agent offers a discount on your purchases or so. Do not get tricked by the idea of it. Each time you apply for a new credit card, it will be listed to your credit report. But before that, they will also review your credit history. And when you have too many credit cards within two years time, your credit score will entirely suffer.

To rebuild your credit score on your own, you need to start the idea of credit monitoring. This is a good start to know if there are any errors in your credit reports or something. Monitoring your credit is also about controlling your purchase or how much you are charging it to your credit card. You need to understand every single information or even a single word or line in your credit report – don’t miss one!

Sometimes, it is quite complex and a confusing process, so you need to consult with a professional to ensure a more thorough clean up of your credit report and have a better result. Auditing your report on your own maybe time-consuming. Never lose your patience on it. Keep in mind that it has something to do with your li Credit repair companies are often paid by every dispute they will remove.

So, the more disputes you have, the higher the expenses. So keep practicing doing it yourself to lessen the costs that you already have. To also avoid this process, the credit repair process, take good care of having a good credit score.

In the first place, review and study the things and actions that will lessen your score – as the excellent credit score is significant in your life and means so much to it. Stop putting yourself in trouble in the first place. Think always of the possible results, positive or negative, of every decision you made. You are the only one who will suffer if you hit a terrible credit score and trying to rebuild it – remember it is not as easy as you think it is.

Not your family member, not your colleague and not someone else but you. Keep your life simple and accordingly. Do not go for the things you cannot afford. Do not go on trend if you cannot afford luxurious things.

In today’s life, the technology has upgraded more, and the cost of living got higher compared to the past few years. Be a wise one as long as you eat your meal three times a day or more, and you have everything you need in your life. Material things are just there upgrading and upgrading.

You can buy it anytime in your life when you have the chance of buying it and when you can already afford it. In most cases, purchase luxurious and material things are because of the trend or the product itself is being overhyped. It is not merely you needed it the most at the point in your life, but because others have it already, you want to have it also for yourself – and that is not a valid justification.

Sooner or later you will realize that a good credit score plays a huge part in your life. Because it is something that will help your life be more comfortable and meaningful in its own way. You just need to be wise and simple for now to have a positive lifestyle in the future.

Your life will be favorable on your side when you have this excellent credit score. I hope that this article explains further enough on how our repair your own credit in yourself – that you do not need to spend a lot of money paying off credit repair companies. That this article helps you think and understand the positive and negative effect of having a good and bad credit score.

To avoid hassle or trouble in life, make good decisions that will have a positive benefit in your life in the future. You need to discipline and control yourself when it comes to this matter. So you would not be regretting anything about it. Nobody wants a hard time, anyway. Decision making and self-discipline is a plus in everything.

The Difference Between Personal Credit And Business Credit

The Difference Between Personal Credit and Business Credit

The most significant difference between personal and business credit would be the that companies get up to 50x higher credit limits than consumers. The main reason for that is enterprises have a much larger appetite for credit than consumers.

Credit plays a significant role in our life nowadays most especially when you run out of money, or you need extra money for something important or something you merely want. The first thing that will come into your mind is the credit card. Most of the people have their own credit cards even people who are only at the early stage of their lives.

They can use it whenever they want or whatever they need to purchase. Having this kind of card is very helpful and useful to each and every one of us because it gives us the ability to buy something we need. We want the convenience of being able to pay it later. When the monthly due date arrives on your credit card statement. It refers to the amount of money you borrowed from the creditor and agreed to repay on a specific time.

It also involves a contract which means you and the creditor has an agreement. It is not just money involved when it comes to credit matters, but also the trust that the creditor gives to you. When the creditor lends you money, it means that he or she believes that you are going to pay off your borrowed money just in time.

Credit also refers to a borrowed money to buy goods and services when you needed them. We can borrow money and apply the idea of getting something now and pay later. So much to do with credit, right?

As for the creditor, the most crucial part for them is when the promised deadline for payment arrives especially when the person who borrows money from them do not have a word when it comes to paying off their debt. Credit can be borrow also from banks which they turn cash into credit card form. But be careful when you use it.

Do not be too overwhelmed buying products you do not need that much. Always make sure that purchase only products that you think you are able to pay off in the future deadline of payments to avoid the hassle or to avoid having penalties that will lead you to a bad credit score. Nowadays, credit is already part of your financial power.

If you wish to borrow credit, do not expect to pay it off in the same amount. It already includes an interest rate. Building accurate payment records can help you lower the interest rate when you decide to finance for a house loan, a car or new appliances.

Establishing a good credit at the early stage of your life means so much to your future. A lot of opportunities awaits you if you already understand what the point of having good credit is. In line with this, there two kinds of credit that you also need to know and to understand.

First is the personal credit. The personal credit is also known as the consumer credit. It refers to a debt that an individual obtains when acquiring or purchasing goods and services.

Personal credit includes purchases obtained with lines of credit, some loans and credit cards. It may also be known as consumer debt. The most common form of consumer credit is the credit card.

Personal credit may also be used by family emergencies like medical related, education purposes or even an unplanned vacation. It can also be used for household purposed like unexpected repair of appliances, purchase of new air conditioner, refrigerator, computer, etc.

The availability of credit cards can lessen the hassle in your life notably when you ran out of cash. It is a big help to you and to your family member. You do not need to borrow from one person to another asking if they have extra money.

Just always be careful about how you use it. Be cautious about the products you are charging to it. Make sure that you really need it because if you are just buying products without any agreeable reason, you may fall down into lousy credit.

Having credit is one of the needs in this period of time. Aside from it is a big help for each and every one of us, it can also help into our credit score if we use it correctly and wisely. Personal credit may be useful to us at sometimes especially for the important matters and unexpected one, but if we do not use it correctly, it can also be a burden to us.

It can lead us to debt that we need to pay off in a long period of time because of a high-interest rate. There are two types of personal credit: the first one is revolving credit and the second one is installment credit.

With revolving credit, the consumer is approved an agreed amount of credit and have the ability to use it anytime he or she needs it, as with a credit card. While the installment credit refers to the consumer that pays a specified number of payments if a fixed amount until the loan is entirely paid off.

A home loan cannot be considered as a personal credit because buying a real estate is viewed as an asset. If you have a credit card or directly owns it, that is already considered as a consumer credit because you use it to purchase material good and services instead of investment products like real estate.

In credit card, you only have a credit limit for which you are qualified for. You can use it for everything you want from home furnishing to dining out, electronics or any other material goods. It is entirely a big help, right? So if you’re going to prolong its use, you need to keep in mind its proper usage.

The second one is business credit. It is a kind of credit that is used by a business purpose rather than individuals for personal use. Business credit is available in all business sizes. From smallest business to the largest one. They can high interests to build a credit profile to improve future credit borrowing terms.

If you ever thought or even planning to start up your own business, you might be hearing the phrase “business credit.” Before you avail the business credit loan, you might undergo preparing and completing requirements they needed. It also has an interest rate and a time frame agreement for the payment.

There are also five types of business credit you need to understand before applying for it or availing it. First is the revolving credit. Most business credit cards are a type of this credit which is the revolving credit for a company which you can get secured or unsecured.

Revolving business credit you have a credit limit which enables you to make purchases up to that agreed limit only. You have two options which are to pay your balance in full or carry a balance and make a payment. Second is charge credit for business.

It means that your company also has a credit limit or they also set a credit limit but the difference is you need, and you are required to pay the total balance in full payment every month. This is a good thing because it refrains and prevents your company from accumulating debt since you are not able to revolve debt.

The third one is the installment credit. With this kind of business credit, a money lender loans your company a set amount of funds at you agree to pay back the amount and the interest in a regular monthly installment with a fixed payment for a set period of time.

The fourth one is the trade credit. Trade credit is also known as the vendor credit or the supplier credit. It means that when the business allows your company to purchase goods and services up to a set credit limit for a total outstanding amount on the invoice between 10 to 60 days depending on the agreed time frame and terms.

The fifth and the last one is the service credit. This means that all the agreements that your company has with the service provider are all credit arrangement. Somehow, you will receive an internet service, cell phone service, telephone service, web hosting, etc., with the agreement that your company will pay for every service for each month.

Business credit is needed if you plan to use credit for major purchases for your business such as travel costs, marketing expenses, for inventory or equipment or you just simply want to take advantage of the convenience that credit provides. Most companies will need this business credit at some point in their business time. Either starting up or expanding into a bigger one. Prepare yourself first and understand every stem of business credit before applying to it. Knowledge about this matter is essential before anything else.

I hope that this article will make you are and have knowledge about the difference between personal credit and business credit. Either way, you need to think first before applying for credit. Most especially, think of the importance of where are you going to use it. If you have both personal credit and business credit, you need to protect those actually.

A lot of small business owners use personal credit to run their business. On the other hand, if you are a sole proprietor, your personal credit and your business credit are approximately linked to the eyes of the other lenders and the banks. Basically, before charging goods or services to your credit, either personal or business, you need to think twice about its importance.

As for the personal credit, we all know that not everything you charge in your credit is essential. There comes a time that you just directly go to the mall because you are bored or nothing to do in your house so you may think that going to a mall is a good idea.

Yes, it is, but purchasing something that you do not need for some reason is a terrible idea. You are just wasting your money for something you do not need, and you are just adding balances to your credit balance itself. The only advantage of the credit, both personal credit, and business credit are you can make a purchase and pay for them later.

While the disadvantage of this personal and business credit is when you failed to pay off your balances within the time frame, and your credit score will suffer.

We all know that here in the United States of America, credit score is significant as it plays a massive part in our own lives. So, we need to protect it and prevent it from hitting a bad credit score.

Because rebuilding it from a low score is not that easy as if it can only take one night rebuilding it. It will take you months before restoring it, and that will also depend on your and eagerness to repair it.

You need a lot of information and knowledge about it – every single details and idea that connect it.

Be careful and be reasonable enough for every decision and action that you will make. So you will not regret something in the future.

Having a business is good, and nowadays, it is a need for everyone who aims to have a better future. But do keep in mind that you need to know first what is in demand or what will fit in the taste of the consumer.

With this idea as a first step, your business will grow in the future. You always need to know what the consumers want, or maybe you need to add a little twist to the taste of the consumer so you will have your own originality and your uniqueness.

You might also want to have an observation or survey first before starting a business. I hope that this article helps you differentiate the personal business and the business credit along with their different types.

Why Credit Repair Should Be Free

WHY CREDIT REPAIR SHOULD BE FREE

There are many things that we require in life and credit is one of them. When you first start school it’s free until you get to college. This is the American way of life. This isn’t the case for credit building and repairing. In order to get a nice apartment, you need credit, in order to get a car you may need credit, in order to buy a house you will need credit.

In today’s world, you may notice a lot of things you need in life requires credit this is why so many companies make you pay to build or repair your credit. Its simple companies build their business model based off supply and demand. Humans need credit, not all will do good with the credit, soon they will need to repair their credit and we will make them pay for it.

    • How to build credit at the lowest cost.
    • How to repair credit for little to no cost at all.
    • The budget for credit repair.
  • The part of credit repair that cost.

In general, you pay for two things: Less hassle and paperwork and Experience making effective disputes. The biggest part in dispute letters is making sure communicate what needs to happen if or when the credit bureaus receive your letters. The first part of that is pretty obvious.

If you don’t want to take the time to review your reports, file disputes and respond accordingly, you hire someone else. They do all the review and paperwork for you. Of course, they generally have to consult with you to figure out what’s an error and what’s legitimate. You may also still have to hunt down paperwork to prove the case. But, it does generally reduce your legwork during the credit repair process.

The second answer is a little harder to judge. As mentioned above, bureaus can reject disputes simply because they weren’t written the right way. If you worded something differently, it could lead to a rejection that would have been an approval. How you dispute information matters.

You can dispute all the information in your credit report, regardless of its accuracy or timeliness. Refuses or avoids explaining your rights to you.  The companies do not tell you your rights and what you can do for yourself for free.

If you hire a state-licensed credit repair attorney, they have experience making disputes in your state. They understand state regulations that control credit repair where you live. They also know how to write dispute in a way that leads to penalty removal.

That’s what you pay for when you pay a good credit repair company. In any case, if you have time, it’s worth it to try and make disputes on your own to avoid added costs. We have a free course that teaches you the exact steps you need to take. Anyone can do this and it is not difficult.

The Fair Credit Reporting Act is a federal law that controls what shows up in your credit reports; it also determines who can see them. In addition, it mandates that every consumer is allowed one free copy of their credit report once every twelve months.

Review your reports yourself- Now that you have your reports, identify the issues that contribute to a lower credit score. That’s any negative item listed in your report. These will fall into two categories: Negative information caused by a bad action you were forced to take or Negative information that’s incorrect – i.e. your account is in good standing, but your report says it isn’t.

Legitimate negative information cannot be removed legally until the penalty expires. If you miss a payment, the negative item it creates falls off automatically after seven years. Before that, you’re stuck working around the penalty.

However, credit repair deals with the second type of information – mistakes, and errors that don’t belong in your report. Disputing incorrect information to have it removed is credit repair. That’s all the process is and that’s all a company does on your behalf. If you dispute these mistakes yourself, you repair your credit for free.

Dispute the mistakes yourself

Truly free credit repair means you dispute all these mistakes yourself online or by mail. You can dispute these mistakes via registered mail, return receipt requested, but that will incur mailing fees. If you use the online dispute portal for each credit bureau, you avoid all charges.

In your dispute, be brief and concise. Tell them what the issue is and what should happen to correct it. Don’t tell them a story or try to provide additional “evidence” of your case unless they ask for it.

For instance, let’s say one of your accounts says you missed a payment on X date. You made that payment. In the dispute, you tell them the account, and then the month and year of the missed payment. Ask them to verify that you made the payment on time with the creditor. If they request it, provide copies of any documents that show you made a timely payment.

Make a plan to offset any other negative items

Once you dispute all of the mistakes, this is all you can gain through credit repair. After that, it’s just a matter of taking steps to build the best credit score possible. Make payments on time and keep your credit card debt low. These two factors make up about two-thirds of your credit score. Improving them goes a long way to offset the negative actions you took in the past.

-Be aware of credit repair scams

Warning signs for credit repair scams include companies that ask you to pay before providing services. The company may tell you it can guarantee a specific increase in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.

Secondly, if the company pressures you to pay up-front fees. The company wants you to pay before it provides any services. A simple rule to follow is “don’’t pay upfront. These money hungry companies make empty promises to remove negative information from your credit report.

They tell you that they can get rid of the negative credit information, even if that information is accurate and current. No one can do this. That is literally the lie they use to get desperate customers. 

Other reasons why credit repair should be free

  • People who need credit repair typically are already in a financial bind.
  • The lessons learned during the credit repair process are priceless.
  • You are basically paying for letters to be sent on your behalf.

The people most in need of credit repair often want something. Like a house, a car, or an apartment. Some want additional credit so that they can go deeper into debt. None of these things are worth the lengths people go through just to acquire them.

Learning about credit and the process in which to dispute inaccuracies are much more helpful than debt. Debt – is a huge factor of your credit score. Your DTI – or debt to income ratio is heavily weighted by lenders.

Letters can be purchased from just about anywhere. We actually have DIY Total Credit Repair Templates. The package contains everything you will need to properly dispute inaccuracies yourself.

Here are some of the features:

Direct credit bureau dispute templates, bankruptcy removal templates, chex systems dispute letters, collections disputes letters, direct creditor dispute letters, file an official complaint with the FTC, follow-up dispute letters, goodwill (late payments) letters, hippa dispute letters, how to answer a lawsuit, inaccurately reported items letter, inquiry removal tool, judgment removal letter, late credit card removal letter, remove tax liens, repossession dispute letters, request credit reports from credit bureaus, student loan removal letter, validate debt letter, request to describe investigation letters.

Break these bad habits before you go bankrupt!

Interpreting Personal Credit Reports

Interpreting Personal Credit Reports

Interpreting personal credit reports can be complicated. By now you should have credit monitoring. if you read my last post you would know that is the first step of the credit building school. Disclaimer: reports from various furnishers vary drastically. There is no real explanation for this other than that they simply are different from one another. Basically, a credit report is divided into four sections: identifying information, credit history, public records, and inquiries.

Identifying information can be any information that can possibly identify you. For instance, Current address, previous addresses, current employer, prior employers. Look at it closely to make sure it’s accurate. It’s not unusual for there to be two or three spellings of your name or more than one variation of any address on your file. Even your social security number can be wrong. Even detail on your report is important if your identifying information is wrong that a huge red flag.

Some credit monitoring services make this easy to read, others may bury it deep into your reports. Consider that when choosing between credit monitoring services. Other information might include your date of birth, telephone numbers, driver license numbers, and your spouse’s name.

The next section is your credit history. Sometimes, the individual accounts are called trade lines, credit lines, or accounts. Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. Each asterisk is important. If it has four asterisks on every account make note of that. You may have more than one account from the same creditor. Some creditors may even sell your account! Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:

  • The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a store credit card ie: target).
  • Whether the account is in your name alone or with another person (authorized user) or AU.
  • The total amount of the loan, high credit limit or highest balance on the card.
  • How much you still owe.
  • Fixed monthly payments or minimum monthly amount.
  • Status of the account (open, inactive, closed, paid, sold, transferred, etc.).
  • How well you’ve paid the account. (A general timeline of your payment history for the life of the account should be present)

The reports will also show your recent payment history and whether you paid as agreed each month. TransUnion and Experian credit reports also include the amount of each payment. Other comments under an account might include account closed by consumer, internal collection, charged off or default. Lots of comments or “remarks” can be added or removed from your credit reports.

“Charged off means the creditor has given up and is writing that debt off as a bad debt. The next section is public records, which is never a good thing to have on your credit report. The report lists only financial-related data such as bankruptcies, judgments and tax liens, all of which can trash your credit. Arrests, lawsuits and other information aren’t included.

The final section is inquiries. That’s a list of everyone who asked to see your credit report for the last 2 years. Any time anyone gets into your credit file a report is generated. It’ll post as a hard inquiry.

There are two types of inquiries, hard ones, and soft ones. Hard inquiries are initiated by you when you fill out a credit application. Soft inquiries come from companies that want to prescreen you for credit offers, or potential employers or current creditors monitoring your account. The soft inquiries only show on reports given to consumers. While hard inquiries are seen by anyone who accesses your credit file.

Dispute Any inaccuracy that you discover.

There’s a very high chance that you may find a mistake in your credit report. One in five consumers had an error on their credit report from the three major credit bureaus, according to a 2013 government study. One in 10 had an error so bad that it cost them more money on loans or insurance.

If you find a mistake, such as an account that isn’t yours or an erroneous amount, you’ll need to dispute it with the credit bureaus that are reporting it. The reports list a physical address for the credit bureaus. Only dispute in writing to avoid giving up your consumer rights.

The credit bureaus will investigate your dispute by contacting the creditors, which have 30-45 days to respond to your dispute. The disputed item will show up as disputed on your credit report until it’s resolved. If you feel your dispute is not handled well, you can file an online complaint with the Consumer Financial Protection Bureau, which will help facilitate the dispute process.

I have done so with what is called multiple rounds of disputes. Meaning every 30-45 days when the bureaus send me a response letter, if nothing has changed I dispute the item(s) again.

The best way I have found of interpreting personal credit reports is to know what each section is. Learn what each abbreviation on your credit report means. When the bureaus respond the letters are usually several pages. Read everything that is on your credit report. I believe they are meant to be confusing and inaccurate on purpose.

If there was a class on credit report reading, most people will fail that class. Hence the reason why most Americans have poor credit to fair credit scores.

If you know anything about the debt crisis Americans have had for quite some time you’ll also know that it is because people are over-leveraged. Most Americans are living paycheck to paycheck, no I am not alone. Although we need credit it is important to know every aspect of credit in order to better manage it.

Did you know that getting a pre-approval letter for anything is because your information is bought and sold openly? Did you know that if you have a student loan every lender in the world knows your personally identifiable information? they pay for it. You can get what is called a promotional suppression form from the credit bureaus hereby opting out of any pre-screenings for 5 years.

The pre-approval letters no matter how prestigious means they have already seen your credit file and think they can extend you credit. Why would you want credit that you did not seek? They know about you but you do not know about them. They know your habits and tendencies financially well before you are even aware. They capitalize off of your negligence and ignorance.

These banks are banking on you to carry a balance and pay late. Once you do other lenders judge you based on this history and can bury you in interest because of it. They know that you cannot afford to buy a car and a house with cash. They know you’ll need to finance a good majority of things. They also are in the business of lending money.

This is the reason why you need to know your credit reports better than they do. Learning to interpret your personal credit report is vital to your financial livelihood. By knowing you can plan accordingly. Credit is a game playing it by its rules is very rewarding. Not knowing the rules can leave you bankrupt.

A sad truth about interpreting personal credit reports is they do not make it easy. Credit bureaus have been breached several times. Your personal information has been compromised many times. Yet another reason to get credit monitoring so that you can be protected. I have lots of experience reading credit reports at this point in my life.

Join my free social community so that I can help you learn what I have learned. If you have read my last few posts you understand how I got to this point. You are not alone and it does get better. Add me on credit building school to get the help you need. I am extending my hand to help an undisclosed amount of users before I start to charge for my services.

As always thank you for reading if you stumbled upon my blog post. Thank you for reading this I hope it was helpful in your quest to learn and build your credit. Please share it with the world if you feel so compelled.  I would greatly appreciate it if you did that.