bookmark_borderTypes of Credit Lenders

When you do this your personal credit isn’t even looked at nor is it used for the lending decision but this is about the only exception in the business funding space.

All other funding types including advances look at and care about your personal credit. YES, you can get approved for cash flow financing and merchant advances with bad credit but your repayment terms won’t be nearly as favorable then if you had good personal credit.

SBA loans, conventional loans, most other long term loans, and credit lines do require good personal credit for approval in most cases. Collateral and asset type based financing doesn’t care about personal credit as much. This is if financing only looks at collateral for approval, not financing where collateral is required for approval.

There is no FCRA in the business world, so lenders will never disclose to you that they pull your business credit when you apply for business financing. But they DO pull your business credit!!!

Just think, you are applying for money for your business, and your business has its own credit profile and score. So of course they will want to see how the business pays its bills on top of how you do as the owner. There is A LOT of money available for business owners, more now than there has ever been in the past. You just need to know what type of financing to go after, once you know that you can more easily find what you need.

Not having establishes business credit makes you look like a rookie, a startup, a “non-established” business. This will lead to denial so insure you have at least 5-10 reported accounts and that you are paying them as agreed.

You actually have three types of credit: Personal Credit, Business Credit and Bank Credit. All three should be good to give you the best chance of approval.

bookmark_borderFactors That Impact Max Credit Score

  • Your Residence – Creditors also want to know where you live. Owning your own home, whether or not it is mortgaged, is a definite plus. They’ll also take into consideration how long you have lived at your present and past residences. Moving often does nothing to help. But if you have generally lived at a particular residence, whether owned or rented, for at least two to five years between moves, you are considered to be a more responsible and stable individual.
  • Your Marital Status – Being married has a positive impact. Creditors consider a single person a higher risk, so being married is better when it comes to your credit record. But don’t get married just to improve your credit. If you are a married person with 1 to 3 dependents, creditors consider you to be a lower risk and so you’ll have a better chance of obtaining credit when you need it. Why? Possibly because you are seen as a more responsible person if you are married with children.
  • Your Open Credit Accounts – The number of open credit accounts you have impacts your credit score. Ideally, you should have 4-6 credit cards and one installment loan. As a general guideline, opt for 2-3 major credit cards and 2-3 store credit cards. An installment loan can be an auto loan, student loan or a small installment loan arranged through a credit union (emphasis on small).

The two things you should be able to see here are stability and responsibility. Creditors extend credit to those they see as having a stable job, living in a stable home, having stable relationships and showing a stable credit history. In order to obtain stability, you need to learn responsibility. This is not to say there aren’t other factors that affect your credit score, but this article is intended to give you a general idea of some of the factors that do impact your score. Again, you can attain your max credit score by learning what affects it. Having bad credit is not a sin, but that should not deter you from taking steps to improve it.


bookmark_borderInfo of Business Credit Myths

Still some business owners overlook the importance of a healthy profile and score or don’t know anything about business credit all-together. Because of this many business owners start believing the myths surrounding instead of the real facts.

One of the myths is that the credit isn’t real credit with real merchants, or creditors. The reason for this myth is that although most major merchants offer business credit, most do not promote that they offer it.

There is no reason for a company to advertise they have credit where the applicant has no personal liability. Home Depot offers a commercial account. But in almost all cases, the applicant is willing to provide their social security number when applying and is willing to take on the personal guaranty for the debt.

So it doesn’t make sense for Home Depot to then offer the applicant a card with no personal liability if the applicant is willing to sign and give their guaranty and accept the liability.

Still, Home Depot does offer business credit with no personal guaranty even though they don’t advertise it.

Many merchants are the same, they offer business credit but don’t promote that they offer it. Business credit with no personal credit check or guaranty is available through Lowes, Home Depot, Office Max, Staples, BP, Shell, Wal-Mart, Sam’s Club, Costco, Radio Shack, and thousands of other major merchants.

Most merchants do offer business credit, even though the myth says they don’t.
Another myth about business credit is that credit limits are low and rates are very high. This myth couldn’t be further from the truth.

Credit limits on business credit accounts are notably much higher than consumer cards. A business owner can secure credit cards with $10,000 limits even after having a score for only a few months. This is impossible to accomplish with personal credit.

And with 5-10 accounts reporting on the report a business owner can qualify for multitudes of business credit cards with limits of $10,000 or higher. A business owner can build massive amounts, much faster than consumer credit.

And the interest rates and incentives are similar, if not better on corporate credit than consumer.

There has been much news recently about the record incentives that corporate credit cards are offering business owners currently. These incentives are so good that corporate credit commonly has higher limits and better terms than most consumer accounts.

Another myth is that if a company pays all its bills on time, its credit history is strong and in good standing. Unfortunately, while paying bills on time is important, your timely payments only help your credit rating when your business works with creditors who report the payments to reporting agencies.

bookmark_borderFix a Credit Score

Understand your score.

The first step on the path to positively affecting your credit score understands what goes into it. A credit score is based on several different factors in your credit history, including your payment history, how much you owe, how much credit is available to you, the length of your credit history, and the types of credit you have.

However, two things influence your credit score the most: on time payment of your bills and your available balance.

Get your debt under control.

Start with getting a handle on your payments and total debt. If it’s tough to keep up with credit card bills, call the card issuer to explain your situation and try to negotiate a payment you can afford. Once you have that in hand, try to keep a balance of less than 30 percent of your available credit limit.

Check your credit report.

Start making a habit of checking your credit score and looking through your credit report.

Apply For Secured Credit Cards

If you’re building your credit score from scratch, you’ll likely need to start with a secured credit card. A secured card is backed by a cash deposit you make upfront; the deposit amount is usually the same as your credit limit.

You’ll use the card like any other credit card: Buy things, make a payment on or before the due date, incur interest if you don’t pay your balance in full. Your cash deposit is used as collateral if you fail to make payments.

bookmark_borderCredit Cards for Teenagers

Citi Dividend Card for College Students

Earn bonus cash back on rotating categories each quarter, such as dining out, groceries and entertainment. Plus, 1% cash back on all other purchases. Online account management lets you monitor your spending and pay bills online. Enjoy 0% interest on purchases for the first seven months. There is no annual fee.

Journey Student Rewards from Capital One

Apply for this card and access your credit score monthly. Set up text or email alerts to receive payment and balance reminders. Earn 1% cash back on all purchases, plus a 25% bonus whenever you pay your bill on time. There is no annual fee.

Discover It for Students

The best credit cards feature bonus perks, such as no annual fee, no over limit fees and no foreign transaction fee. This student card has all these features and more. Earn 5% cash back on rotating categories throughout the year, and 1% cash back on all other purchases. Use the card for books, food, transportation and more. The more you use your credit card, the more opportunities to earn cash. Choose your own due date, and with $0 Fraud Liability, you’re never responsible for unauthorized purchases. Enjoy 0% interest on purchases for the first six months.

Capital One Secured MasterCard

This card has no application or processing fee. Submit a refundable security deposit up to $3,000 and receive a comparable credit limit. Capital One reports to the three major credit bureaus monthly, which helps build your credit faster. Make timely payments and qualify for credit limit increases with no additional deposit. Demonstrate a good credit history over time and you may qualify for an unsecured credit card with Capital One. Use this card wherever MasterCard is accepted. There is a $29 annual fee.

bookmark_borderAbout Merits of Credit Cards

A credit card can free the holder from the headache of obtaining funds. It is a good source of all-time money. But, it is necessary to educate students which card is best for them. Student cards invariably have low credit limits. This is done to put a cap on student spending. This will make the student self-dependent and help him/her take his own decisions when it comes to deciding his needs and his wants. Normally, a student spends on books, CDs, food, clothes and electronic accessories. Student cards which are jointly issued with a parent offer two bills, one to the parent and the other to the student. This enables the parent to check the spending patterns of their ward.

Student cards are fairly easy to get. All banks are falling over themselves to issue their own credit cards to students. This normally happens with students who are joining some professional course like engineering, medical, management, etc. Students from these courses generally need cash at a short notice.

There are other cards for adults, which offer many benefits to the user. Some of these benefits include no surcharge for fuel on certain petrol pumps, discounts on ticket booking on the Indian railway website, discount offers in dining at fine dining restaurants, preferential health insurance, accidental insurance benefits, discounts in film theatres, reward points on spending on the card, discounts on food at well-known outlets like Pizza Hut, Coffee Day, Dominoes, etc. Additionally, some cards also offer doctor-on-call, concierge services, cash back on paying utility bills, etc. There are a lot of credit cards from other banks or financial institutions, all of which have tie-ups with their partners through which they offer discounts to customers. Credit cards are particularly useful when we must cash at a short notice in the time of medical emergencies or calamities.

bookmark_borderReasons to Live Without Credit Cards

  • The higher cost credit accounts normally add a reward or award program. This works by your accumulating points on a per dollar spent basis and once you have enough points you can redeem on a variety of goods. Having rewards and awards benefit is just another thing on the list to do in a busy life, so get rid of your points and buying things you don’t really need.
  • Simplify your life and have less bookkeeping and account paying to do.The less accounts you have the less you need to look after, particularly if you are a busy business person.
  • To make payments easier just have a debit card attached to your relevant bank account which allows the card to be used as a credit account anyway. This way you can avoid any extra fees. Just be sure to have some money in your account.
  • By having these cards, you may at some stage miss a payment or overdraw your limit and be stung with fees or the big interest charges they have. Not having one avoids these fees.
  • For some it is just a recipe for disaster to have a credit card, each requires discipline and control. If this is not you or for younger people try cutting them up. It can be an expensive lesson to spend and spend with ease only to have year of repayment pain ahead of you.
  • Security risks are getting higher. Commonly unauthorised transactions occur recently in investigations and explanations, phone calls to phone centres yuck. Swipe coping and paywave security are not overly trustable. So beware your credit card security too.
  • Try transferring your card to a low interest period card transfer. Then once repaid; you can get rid of it.
  • Making the mistake of not repaying a credit account can end up as bad credit history for you. This will mean you may not get loans in the future.

bookmark_borderLow Credit Score

  • Mortgage. Actually, it’s rather difficult to get eligible for a mortgage with poor credit score. Although, if you have managed to qualify for a loan, expect to pay higher interest rates. As a rule, applicants with a high FICO credit score (that is 740 and higher) might get eligible for a 30-year fixed-rate mortgage with an interest of 4%, while applicants with a low credit (that is 640) are likely to be charged an interest of 4.38% for this very loan. That comes out to tens of thousands of dollars in interest if the applicant with lower credit pays out the loan in full over thirty years.
  • Credit Card. Credit card is one of the financial options that are already coming with high interest rates. Although, if your credit score is not good enough, be ready to pay more. Experts say that even a slight difference in the rate of interest on your credit card debt may have a sufficient effect on your budget.
  • Car Loan. Car lenders, just as all personal loan lenders, will definitely charge a higher interest rate if you have a low FICO score. The car manufacturers are often advertising low interest rates on auto loans, but keep in mind that works only for customers with the best scores. So, the better the FICO score, the better a borrower looks to lenders.
  • Insurance. You might be really surprised, but insurers consider that drivers with excellent credit scores are likely to file fewer claims and get into fewer accidents. That’s why many insurers provide higher rates on auto insurance for those with low credit. Besides, homeowners insurers may also cost more because people with low score are expected to file more claims and this makes them riskier clients.
  • Apartment. Landlords also check credit scores, thus you may be considered as a risky tenant if your FICO score is not high enough. Thus, you can be made to pay a larger security deposit or charged a higher monthly rate.

Well, keep in mind that your credit score is extremely important, so don’t miss a chance to improve it as much as possible. Luckily, it is not so hard. Just do your best to make payments on time and repay your credit card as well as other debts. Don’t think that the response will be immediate. It may take from several months to a year or even longer. But your credit will be definitely improved.

bookmark_borderOrigin Of Credit Cards

The issue is these cards reduce the hassle of carrying cash, which can often create problems for many individuals, and most of the commercial establishments support credit cards for making payments. Today, you can use your ATM or debit card to make payments for groceries, book your tickets, buys products from internet websites, and even buy automobiles. There are different types of cards available. The major difference is with debit or ATM cards you make payments from your bank account, while in case of credit cards you make your payments first, and subsequently pay for the expenses – within a pre-designated period. The main issue with these cards is that they don’t come cheap. You are required to pay special charges for using them. If you fail to pay your monthly dues in time, which is very frequently the case with many individuals, you may have to pay hefty fines – even as high as twenty-three percent in addition to the main outstanding amount.

A thin plastic card, generally 3-1/8 inches by 2-1/8 inches in size, which contains your identification, signature, a picture, and other bank related information, and which is used to transact money can be broadly understood as a credit card. With these cards, you buy things first, and make your payments later on. The bank charges a token amount for using the transaction system. These cards are typically read by automated teller machines or ATMs, point-of-sale counters in super stores, and can be used for making online payments using the internet.

The very first universal card was introduced by an organization known as Diners Club, Inc., in 1950. The card became very popular since it could be used in a variety of ways while shopping in stores, and making your business related payments. Typically, the card company charged a nominal annual fee in the form of a “membership” on a yearly basis. Later, another company called American Express introduced a similar card with the tag line “Don’t leave home without it!” These companies pioneered the credit card systems, as we know and understand them today. Almost every banking institution offers credit cards to facilitate the monitory transaction process.

bookmark_borderImportance of a Credit Report

The simplest way to find out about your credit history is to order a copy online. You want a website that provides you with information from the three major credit bureaus;Experian, TransUnion and Equifax. These bureaus analyze your financial decision making; both past and present, and put that information into a report. A good website to use that provides this information is It only costs $1 to check and can provide you with invaluable information compiled into a credit report. Your report will not only provide your current credit score, but also your entire credit history.

A credit report acts as your credit references. A positive credit history tells potential lenders that you manage your finances well, i.e. borrow money and pay it back in a timely manner. A negative credit history tells lenders you have a difficult time managing your finances and instead are in debt, often not repaying them as agreed.

Credit reports help you by providing you with your personal financial history. This may include attempts at fraud made by others at your expense or errors made by varying lenders. The report can also provide you with information on good or bad decisions you may have made in the past. By staying up-to-date with your financial history, you can ensure you are making good choices, have the ability to detect if someone is committing identity theft and ensure there are no errors.

In addition, a credit report can explain why you were not approved for a certain loan or line of credit. Even though you had a great or excellent credit score, you still had a negative item or charge back on your credit report, so the financial lender refused to approve you.

You can also see how fast your credit score can be transformed. If you go ahead and start repairing your credit, you can watch how fast negative items can be removed and how fast you will gain points putting your score from bad or below 600 to above 700.