The more you desire to start or expand your business, the more important your individual credit becomes. Yes, that’s right— your business credit relies on your personal credit. A shabby personal credit report can have a negative impact on how much you may be able to borrow and, more importantly, how much interest you will end up paying.
Before you can achieve better purchasing power you need to know all the information that appears on your report. This includes everything from current and historical borrowing data to payment habits. After obtaining this information, you can determine if your habits or inaccurate information are hindering your purchasing power. These steps need to be taken before making a significant purchase or applying for any type of credit.
Tips for optimizing your credit report
- Never exceed, approximately, 45% of you allowable credit. Credit cards are getting near their maximum allowable limit isn’t a good sign to inquirers.
- Multiple credit inquiries are unfavorable. Try to keep this number below five-to-six per year, and have them not all grouped together.
- Find the source. Whenever you are turned down for credit, the proposed credit provider must give you the source of the information that caused the refusal. This allows you to get your report from whatever agency they used (free for a period of 60 days from their decision).
- Remember: all information including late payments, collections, bankruptcy, foreclosures, etc. are kept on the report for seven-to-ten years.
So you think you have excellent credit?
It pays to check periodically to determine if any information in which you may not be aware of has negatively affected your score. Errors and discrepancies frequently appear and would be unknown to you if you have not developed a habit of periodically checking with the bureaus. By following this procedure it will allow time for you to correct or fix these problems prior to attempting to get financing.
Check your personal credit report at least once a year. Carefully review your reports to ensure all the information shown on your credit report actually belongs to you and that the balances are current and correct. There are three major credit bureaus to be should be concerned with. Contact each credit bureau directly online. Each of these have a small cost associated with the report:
Also check out these two:
- http://www.annualcreditreport.com is a free site allowing you to get one report from each bureau annually. These reports do not contain your credit score, but for a small fee (usually under $20) the score can be obtained.
- Another good site is www.myfico.com. They also have a small fee.
Be cautious and stay with the above choices.
There are untold numbers of sites that advertise the availability of your credit report and score and are quite often shown as being free. Be cautious of all these since you must supply your Social Security number and do not know their security level. Additionally, many will automatically sign you up for a monthly fee for a variety of services.
If you find any errors or discrepancies on your report, notify the credit bureau immediately. They are required to make a full investigation. If the information cannot be verified in writing, within a short period of time, it must be removed from the report.