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5 Awesome Ways to Build Business Credit Score

Build Business Credit Score to Get the Funding You Need

Business owners hear it all the time.  You need business credit to run a business.  You shouldn’t run your business using personal credit.  Business credit is the best way to ensure you can get the funding you need to build and grow your business.  The problem is, you don’t hear a lot about what business credit is, how to get it, or how to build business credit score.

Did you know you can’t automatically build business credit score?  That’s right. It isn’t like your personal credit score where accounts are automatically reported. You have to be intentional when you want to build business credit score.  In fact, if you have not been intentional, you may not even have business credit yet, despite the fact that you own a business.

How Do You Get Business Credit?

Before you can even begin to build business credit, you have to establish your business as an entity separate from yourself.  Here is how that happens:

You have to incorporate

This is the most decisive first step in separating your business credit from your personal credit.  When you cease operating as a sole proprietorship and incorporate your business, it will be easier for credit agencies to recognize your business separately. You have a few options.

  • C Corp

This is the most definitive separation, but it is also the most complicated and expensive.  Before choosing this option, be certain there are reasons other than establishing business credit that it needs to be done.  If it isn’t necessary for some other reason, there are other, less complicated, and less costly options.

  • S Corp

This option basically offers the same separation as the C Corp, but taxes are paid at the personal level, rather than requiring the business to be taxed as well, resulting in double taxation.  It is also cheaper than incorporating as a C Corp.  If you aren’t required to file as a C corp, this is a good alternative.

  • LLC

Forming a Limited Liability Corporation results in less liability, thus the name, and offers enough separation to serve the purpose of establishing business credit.  If you are not required to be a C Corp or S Corp, this is the easiest and most cost-effective way to create the separation of business and personal credit needed.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

Get an EIN

You need to apply for an EIN and stop using your Social Security Number as the identifying number for your business.  Your SSN is tied to you, personally, and it is virtually guaranteed that anything connected credit-wise will end up on your personal credit reports.

The process for applying for and EIN is easy.  The IRS has an online form, and as soon as all the information is verified you receive your number.  It typically happens almost immediately.

Get a DUNS Number

Dun and Bradstreet (D&B) is the most widely used business credit reporting agency.  They issue each business on file a 9-digit DUNS number.  Application is easy and free, and once you have that number, you will be even closer to establishing credit for your business separate from your own.

Separate Contact Information

Your business needs its own phone number.  This way, when you apply for credit, you can enter contact information that is separate from your own.  When information is reported to agencies, sometimes the phone number is an identifying factor.  If you and your business share a number, that just decreases the level of separation.

Be sure you get your business phone number listed in the directory under the business name.

Business Bank Account

There has to be a dedicated business bank account.  Run all business transactions through this account.  Resist the temptation to pay personal expenses from it by paying yourself a salary instead.

build business credit score credit suite2

What if You Already have Business Credit?

The next question is, how do you build business credit score if you have business credit already, but it is bad?   How do you improve your business credit score?  It is impossible to improve on anything if you do not know what you are starting with, what you have to work with, and what you have control over.  Let’s break down where exactly your business credit score comes from and what it means.   This is important to  get a good starting point.

Dun & Bradstreet

Dun & Bradstreet offers several different types of business credit reports.  In fact, there are six different reporting options in all.  They all offer different information related to credit worthiness.  It takes all of them to get the whole picture.

The report most used is the PAYDEX.   This is probably because it is the easiest to understand.  It is the options most like the consumer FICO score.  It measures how quickly a customer makes payments and ranges from 1 to 100.  Scores of 70 or higher are acceptable.   For reference, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.

Experian Commercial

Experian uses what it calls Intelliscore as its credit ranking.  There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk.  Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.

Experian Commercial offers a number of other scores as well, similar to Dun & Bradstreet.

Equifax Business

Equifax gets its business credit data in ways similar to D&B and Experian.  They get Net 30 type industry trade credit information from a wide variety of suppliers that provide products and services to businesses on an invoice basis.

In addition, they use financial data with this industry trade data, and they add in utility and telephone payment data.  They also use public records information.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

 Equifax Business credit scores include:

  • The Small Business Credit Risk Score for Suppliers

It is scored on a scale of 1 to 100, with 90+ indicating that a business has paid its obligations as agreed.  An 80 to 89 means they are 1 to 30 days past due, 60 to 79 indicates they are 31-60 days overdue, 40 to 59 is 61 to 90 days past the payment date.  It  just goes down from there.

  • Business Failure Risk Score

This score indicates the chance of a company paying its bills late on the following scale:

  • 497 – 816: 25% or less chance of payment being overdue
  • 452 – 496: 26 – 50% chance of payment going overdue
  • 415 – 451: 51 – 74% chance of delinquent payments

FICO SBSS

The FICO SBSS is the business version of your personal FICO credit score. It is becoming increasingly more common for lenders to use this score, rather than the Experian or even the D&B PAYDEX business credit score.

Unlike your personal FICO, the SBSS reports on a scale of 0 to 300. Of course, the higher the better, but most lenders require a score of at least 160.

This is a lot different from other business credit scoring models because it combines your business credit score, personal credit score, and other financial information such as business assets and revenue. It is a total global financial picture rolled into one score.

How Do You Know What Your Score Is?

Unfortunately, there are not a lot of ways to find out what your business credit score is without paying. Find  out how to get business credit reports for free here.  Most options do not work on a continual basis however.  You will eventually have to pay.

The prices are not cheap. Here are the prices for the top 3 business credit reporting agencies:

  • Dun & Bradstreet reports range in price from $61 to $229 per report.
  • Experian reports are $49.95 per report.
  • Equifax is $99.95 per report.

As for your FICO SBSS, that is a whole other story.  You cannot really get a copy of it because it will be different from lender to lender.  They system calculates a score based on what the lender tells it to look for.  This means the lender can weight certain aspects of the calculation. For example, if one lender says that they want the personal credit history to be heavily weighted and another prefers to focus on another type of debt, those two lenders will have two different scores.  Meanwhile, another lender may leave out student loans all together.  The next may not want any personal credit information at all.  With the huge number of possibilities, you could feasibly have a different FICO SBSS score every time.

With Credit Suite, you can monitor your scores with Dun & Bradstreet and Experian for a fraction of the cost. Get more information here.

5 Way to Build Business Credit Score

Once you understand  where it comes from, what it is, and what it means, you can get to work and build business credit score.  Here are some of our favorite tips.

1.      Get more accounts reporting

The fastest way to build business credit score is to get as many accounts as possible reporting on-time payments.  The fastest way to do this is to work with starter vendors.

These are vendors that will offer net terms on invoices without a credit check.  After you pay, they will report those payments to the credit agencies. As more and more of these vendors report your payments, your business credit score will start to grow.

Another way to get more accounts reporting on-time payments is to ask vendors you already work with to report.  You pay things like rent, utilities, and your telephone bill each month.  Sometimes if you ask them, they will report those payments.  They are not required to though.

2.      Dispute Mistakes on Your Credit Report

This is one thing that a lot of business owners do not realize they can do to build business credit score. Once you are able to see your business credit report, be sure to dispute any mistakes you find.  Do this in writing.  When you send the letter, you have to be very detailed about what the mistake is.  Be clear about the correct information, and send copies of supporting documents.  These are documents like receipts and cancelled checks. Additionally, use certified mail to send dispute information.  .

Dispute your or your business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute mistakes on your or your business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

3.      Do Business with SBFE Members

The Small Business Finance Exchange collects information from its members for their database.  They then provide this information to partner credit agencies.  These credit agencies can then distribute that information to other SBFE members seeking credit data on potential borrowers.  Consequently, by doing business with members of the Small Business Exchange, you ensure that the credit agencies have as much information as possible related to your business.

4.         Work on Credit Utilization

It’s important to remember that using too much of your available credit can cause problems.  Your credit utilization, as indicated by your debt-to-credit ratio, needs to stay as low as possible.  So you cannot use up every bit of credit you have.  Carrying balances close to your limits will raise this ratio.  As a result, your credit score will go down.  Granted, you need to carry balances and make payments to get those payments reported.  However, avoid getting too close to your limits.

5.         Don’t Forget About Your Personal Credit Score

Despite the fact that business credit is separate from your personal credit, there are some business credit reporting agencies, like Experian Business and FICO SBSS, that use your personal credit history in the calculation.  As a result, it is possible for a poor personal credit score to have a negative effect on your business credit score.  So don’t neglect it.

Follow These Tips and You Can Build Business Credit Score

Here’s the thing.  It will not do you any good to get more accounts reporting, correct mistakes, or work with SBFE members if you are not making payments on time.  Regardless of how much credit you have available and how little you are using, not paying will tank your score fast.  Hence, it will totally negate any progress you make to build business credit score.  You just have to pay, on-time, and consistently.

Whether you are starting from scratch or trying to build up a bad score, trying to build business credit score can be completely overwhelming.  Honestly, you have to start somewhere though, right?  These tips can help you find a good starting point, and from there you just keep swimming.

 

The post 5 Awesome Ways to Build Business Credit Score appeared first on Credit Suite.

Easy Business Credit – Use it 5 Ways

Easy Business Credit is Possible, Fast Business Credit is Not

Business credit is credit in the name of your business, not your own name. It is not connected to the business owner’s personal credit. Because of this, a business owner’s business and consumer credit scores can be very different.  There are many benefits to building business credit. Because business credit is distinct from the consumer, it helps to secure an entrepreneur’s personal assets in case of a lawsuit or business insolvency. It is easy to get business credit, but it is not fast.

Even start-ups can get easy business credit.  This is important, because visiting a bank for a business loan can be a formula for disappointment if personal credit isn’t top notch. By building small business credit, you can have a plan for success that does not involve your personal credit score or liability.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

How to Get Easy Business Credit

As already stated, simple credit for a business doesn’t mean fast business credit.  It also doesn’t mean you sit back and build it on autopilot.  You cannot build business credit passively.  You have to work at it, intentionally.  Work doesn’t sound easy, I know, but the process really is uncomplicated.

The whole thing moves more quickly  if you start by setting up your business to build business credit from the beginning. However, even if your business is already operating,  you have to do that before you can start working on business credit.  It will just be a slower process.  Your business has to be established as an entity separate from yourself.

Establish Your Business as An Entity Separate from Yourself

This is the vital first step.  If you do not do this, then everything you do to build business credit will only affect your personal credit score.  You will still not have a separate business credit score. Here is how you start with easy business credit, and separate your business from yourself in the eyes of creditors and credit agencies.

Set Up Your Business for Building Credit

  • Your business has to have its own phone number and address that is separate from your personal phone number and address. The phone number should be from a toll-free exchange. Be sure to list your business name with its own contact information in all of the directories, including 411.
  • Formally incorporate your business with the IRS. You get to choose from a corporation, an S-corp, or an LLC.  The one you choose will depend on the amount of protection you want and how much you want to spend.
  • Get an EIN. This is an identifying number for your business that functions similarly to an SSN.   Get an EIN for free at gov.
  • You’ll need a D-U-N-S number to start building easy business credit. That’s another identifying number assigned by Dun & Bradstreet.  They do not open a business credit file unless you have this    As the largest and most commonly used business credit agency, you definitely need a file with them.
  • Open a business bank account. Use it for all business expenses.  You can pay yourself a salary out of it if you need to, but it has to be for business transactions only, and it must be opened in the name of the business using the business contact information.
  • Make certain your business has a professional website. It is best to hire or barter with a professional for this.  A poorly put together website can do a lot of damage, and having no website in this day and age is basically the same as not existing.
  • Get a dedicated email address for your business that has the same URL as your website. A free service such as Yahoo or Gmail will not work.

How Can You Get Easy Business Credit When You Have None?

It probably seems unrealistic that simple corporate credit is even a thing.  That’s because we all know that, with personal credit, it is hard to get credit without credit.  When you apply for credit, the creditors want to see a good credit score before they give it. Why is the process different for a business? Because there is a secret.  Lean in close so you can hear it.  The secret is the vendor credit tier.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

You must start with trade vendors.  There is no other door to simple company credit.  You can’t start with retail credit cards or a business loan from your bank. If you do, you’ll get a rejection 100% of the time.

Vendor Credit Tier

Trade vendors are those vendors that offer tradelines and report payments to the business credit reporting agencies.  This is what we call the vendor credit tier. They will often offer net 30, 60, or 90 terms on invoices without a credit check. It is not revolving credit.

Therefore, if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, such as within 30 days on a Net 30 account.

Not every vendor can help like true starter starter vendors do. These are merchants that will grant an approval with very little effort. Also, you want them reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.  This is key, as if they are not reporting, the accounts are not helping you build.

You need 5 to 8 accounts reporting from this tier to move up to the next one, which is the retail credit tier.  It takes a little time to reach this step, as some vendors may require  a minimum amount of time in business or minimum annual revenue even if they do not require a credit check.

There are several such vendors out there, but as a general rule these are some of the easiest to get started with.

Uline Shipping Supplies

Uline Shipping Supplies offers shipping, packing, and industrial supplies,  and they report to D&B.

They require a D-U-N-S number, so be sure you have that handled before you apply. They will also ask to see 2 references and a bank reference. In addition, they may require you to order a few things and pay for them before approving net 30 terms.

fast corporate credit Credit Suite2

Quill

Quill works well for this purpose also. They sell office, packaging, and cleaning supplies, and they report to D&B and Experian.

Because Quill reports to two separate credit reporting bureaus, you get two credit experiences with them. Consequently, they should probably be your first stop so you can open a credit file with both Experian and Dun & Bradstreet from the beginning.

They will usually put you on a 90-day prepayment schedule, and if you order items each month for 3 months, they will go ahead and approve you for a Net 30 Account.

Grainger Industrial Supply

Grainger Industrial Supply is likewise a true starter vendor. They sell safety equipment, plumbing supplies, and more.  They also report to D&B. You will need a business license, EIN, and a D-U-N-S number before they will approve you.

For under a $1000 credit limit they will approve nearly any person with a business license.

Retail Credit Tier

Once there are eight or more vendor trade accounts reporting to at least one of the CRAs, you can apply for credit in the retail credit tier. These include retail stores such as Walmart, Amazon, and Office Depot.

Another example is Lowe’s. They report to D&B, Equifax and Business Experian. They want to see a PAYDEX score, the main score from Dun & Bradstreet, of 78 or higher.

Fleet Credit Tier

After eight or more accounts are reporting your payments from the retail credit tier, you can apply for cards in the fleet credit tier. These are companies like BP and Fuelman. Use this credit to buy fuel or to repair and maintain vehicles.

An example of a company in this tier is Shell, which reports to D&B and Business Experian. They need to see a PAYDEX Score of 78 or more, and they require a 411-directory business phone listing as well.

Shell might claim they want a certain amount of time in business or revenue. The truth is though, they will still approve you without meeting those requirements if you have enough vendor accounts reporting before you apply.

Cash Credit Tier

If you handle the credit you get in these tiers responsibly, then the cash credit tier will be your next stop. This includes cards from Visa and MasterCard that are not related to a specific retail store.  This is the top tier.  If you make it here and handle the credit you have in this tier responsibly, you will have a strong biz credit score that will help you run and grow your business.

When applying credit in any of these tiers, be sure to use your EIN and not your SSN.  Your SSN and birthdate should only be for identity verification purposes on these applications.

Easy Business Credit vs. Fast Business Credit

As you can see, the process of establishing and building business credit is not hard.  It is actually pretty simple if you follow the steps in order.  It’s a snowball effect that does not happen overnight though.  As you get approval for more accounts, more accounts are reporting, and you will be approved for even more accounts.  As positive payment history is recorded, your score will continue to build and grow stronger and stronger.

Share our foolproof business credit building checklist and tell your friends about how you’re building business credit the quick and easy way.

It is a process similar to building muscle.  It’s easy in that all you have to do is eat right and work out.  Results do not come quickly however.  It definitely takes time to build company credit just like it does to build muscle.  During the process, you also have to keep an eye on things, similar to stepping on the scale and measuring your waist.

Monitor Your Progress

You have to know what is happening with your credit. If you don’t, you will not really know how many accounts are being reported from each tier, and you will not know when the time is right to move on to the next tier.  You also need to make sure to correct any inaccuracies ASAP. This is more difficult with corporation credit than with personal however, as there is no free annual report available for your biz credit like there is  with your personal credit. Monitoring costs money.

We can help you monitor at Experian and D&B for 90% less than it would cost you at the CRAs. See: www.creditsuite.com/monitoring.

At D&B you can monitor at: www.dandb.com/credit-builder. At Experian, you can monitor your account at: www.smartbusinessreports.com/Landing/1217/. And at Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Experian and Equifax cost about $19.99; D&B ranges from $49.99 to $99.99.

5 Ways You Can Use Business Credit to Improve Your Business

Once you have company credit, a world of opportunity is open to your business.  There is so much you can do that is not possible without it.  Here are 5 ways to use it to further the success of your business.

Take Advantage of Special Pricing

Often times you can find a great deal on goods and services if you purchase in bulk.  A diner may be able to get a 10% discount on certain high use spices, or a retailer may be able to get a great deal on certain inventory items by purchasing more than the standard amount.  The diner can save on expenses, and the retailer can cut the cost of goods sold.  Both situations have the potential to increase the bottom line, but there is usually a significant cash outlay involved.

Bridge a Seasonal Cash Gap

Do you run a seasonal business?  If you specialize in holiday items, toys, camping equipment, or any number of other things, your revenue may be higher during certain times of the year.  This can make for some pretty tight off-season budgeting issues.  Having strong business credit allows you to bridge those gaps with ease.

Earn Rewards

If you choose your cards carefully, you could make a substantial dent in expenses with credit card rewards.  The key is to find the rewards that best fit your needs.  If you earn cash back for certain expenditures or for spending at specific types of businesses, be sure those are things you spend on and places you spend at frequently enough to make a difference.  It doesn’t do you any good to earn cash back at restaurants if you prefer to eat at home.

Repair and Replace Equipment

If you have strong company credit, there will be no reason to stress or even have to go through a loan process each time you need to repair or replace equipment.  Need a new computer, printer, or industrial refrigerator.  Your corporate credit cards can handle that, and you can take care of the problem right then, without depleting cash on hand.

Small Expansion or Maintenance Projects

If you need to replace a window, upgrade your air conditioner, or  install new lighting, you can do so quickly and easily without the hassle of a new loan and without running your cash reserves too low.

Easy Business Credit Is Possible: Use it Wisely

Getting business credit isn’t hard, but there is a specific process that must be followed.  Trying to do things out of order will result in denials every time.  If you take the time and work the process however, you can have the company credit you need to handle whatever is thrown at you.

 

 

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5 Amazing Ways You Can Get a Free Credit Score for Business

Get a Free Credit Score for Business – We Show You 5 Easy Ways to Do It

You can get a free credit score for business. There are 5 that entrepreneurs should understand.

Keeping your credit scores high is essential, so be sure you don’t miss any of these. You need to be proactive to get and improve any free credit score for business.

1. Free Credit Score for Business: Dun & Bradstreet’s PAYDEX

A PAYDEX Score from Dun & Bradstreet ranges from 0 to 100. This score has a basis in payment data which is on report to the bureau. Or it is on report to data-gathering companies partnering with the CRA. https://creditreports.dnb.com/m/business-glossary/paydex-score.html

D & B uses this data, along with a credit score and Financial Stress Score, so as to advise how much credit a loan provider should extend to your business.

Obtaining a Free Credit Score for Business from D&B’s PAYDEX

To get a PAYDEX score, you need to apply for a D-U-N-S number by using Dun & Bradstreet’s website. The number is at no cost. Plus the CRA will require to have reports of your payments with four or more merchants.

Your firm’s PAYDEX score reveals if your payments are usually made promptly or ahead of schedule. As you may expect, a higher number is better.

PAYDEX Score Information

The scores break down as follows:

  • 80 – 100: A low risk of late payments
  • 50 – 79: A medium risk of late payments
  • 0 – 49: A high risk of late payments

D&B Business Credit Scores

Your company’s credit rating ranges from 1 to 5. 1 is the best score. This matches your business with other companies with comparable payment histories. The score shows just how often those firms tend to pay without delay.

This information can actually help loan providers to identify your company’s standing. Yet it does not really show every one of the payment records from your business.

Financial Stress Score

The Financial Stress Score also runs from 1 to 5. It matches your business with other companies sharing comparable financial and company characteristics.

These resemblances are in areas such as size or amount of time in business. This score shows just how regularly those businesses have a tendency to pay on time. As before, 1 is the very best score. This score is a more comprehensive examination of the business landscape, versus an analysis of your company’s real payment history.

An amazing PAYDEX score for your company is 80 – 100.

Find out why so many companies are using our proven methods to improve their business credit scores.

2. Free Credit Score for Business: Experian Credit Scores

Experian’s scoring system is called Intelliscore Plus. http://www.experian.com/business-information/credit-risk-management.html

What is the Intelliscore Plus Free Credit Score for Business?

The Intelliscore Plus credit score is a statistically based credit-risk assessment. The essential purpose of Intelliscore Plus is to aid companies, investors, and possible future loan providers make wise judgments regarding who they should or should not do business with.

Like an automobile dealer makes use of a customer’s FICO score to swiftly identify just how much of a credit risk a potential customer may be, the Intelliscore Plus credit score can offer insight on just how much of a credit risk a business or business owner might be.

Intelliscore Plus Credit Score Range

The Intelliscore scores vary from 1 to 100. So the higher your score, the lower your risk class. The chart below details each Intelliscore Plus credit score range as well as its associated meaning.

Score Range/Risk Class

  • 76 – 100 Low
  • 51 – 752 Low – Medium
  • 26 – 503 Medium
  • 11 – 254 High – Medium
  • 1 – 105 High

Computing an Intelliscore Plus Credit Score

In the credit world, Intelliscore Plus is regarded one of the most dependable tools in effectively forecasting risk. Among the ways Intelliscore Plus maintains this claim to fame is by acknowledging the significant variables that show if a business is likely to pay their debts.

Though there more than 800 business and owner variables constituting an Intelliscore Plus credit score, the variables can be broken down into these essential elements:

Payment History

The bureaus call this recency however in the real world, it’s nothing more than your current payment status. This includes the number of times your accounts become delinquent, the number of accounts that are currently delinquent, and your overall trade balance.

Frequency

Similar to payment history, frequency make up the quantity of times your accounts have been sent to collections, the quantity of liens as well as judgments you may have, and any bankruptcies connecting with your business or personal accounts.

Frequency can also include information connecting to your payment patterns. Were you regularly slow or tardy with payment? Did you begin paying expenses late, yet over time, stopped doing so? These variables will certainly all be taken into consideration.

Monetary

This particular facet focuses on exactly how you use credit. As an example, just how much of your offered credit is presently in use? Do you have a high proportion of delinquent equilibrium in comparison with your credit line?

If you’re about to begin a company or are rather new to this game, the checklist above may appear a bit overwhelming. If you haven’t begun or don’t have a lengthy history of company-based purchases, exactly how will Intelliscore Plus rate you?

Intelliscore Plus handles these situations by using a “blended model” to develop your score. This implies that they take your consumer credit score right into consideration when determining your company’s credit score.

Find out why so many companies are using our proven methods to improve their business credit scores.

3. Free Credit Score for Business: Equifax Business Credit Scores

The Equifax Credit Risk Score originates from a model which they use to place specific risks. Equifax uses these details in its calculations, consisting of the depth of the credit details Experian can obtain the length of your company’s credit history, as well as your firm’s payment delinquency history. http://www.equifax.com/business/equifax-risk-score

http://www.equifax.com/assets/USCIS/efx-00178_efx_risk_score.pdf

http://www.equifax.com/assets/USCIS/efx-00164-9-13_efx_bni.pdf

Equifax then sectors some five separate scorecards together, by using statistical analysis. In order to enhance their precision, Equifax suggests combining their Credit Risk Score with their exclusive Equifax Bankruptcy Navigator Index.

The Bankruptcy Navigator Index helps forecast the likelihood of your business declaring bankruptcy in the next 24 months. Equifax bases its predictive model on over 270 million different accounts.

Equifax shows three separate company determinations on its business credit reports. These are the Equifax Payment Index, your business’s Credit Risk Score, and its Business Failure Score.

Equifax Payment Index

Comparable to the PAYDEX rating, Equifax’s Payment Index, which has its measurement on a scale of 100, shows how many of your firm’s payments were made punctually. These include both data from credit providers and suppliers.

However it’s not indicated to forecast future habits. That is what the other two scores are for.

Equifax Credit Risk Score

Equifax’s Credit Risk Score analyzes just how likely it is your business will become severely overdue on payments. Scores vary from 101 to 992, and they examine:

  • Available credit limit on revolving credit accounts, e. g. credit cards
  • Your business’s size
  • Proof of any kind of non-financial transactions (e. g. vendor invoices) which are delinquent or were on charge off for two or more payment cycles
  • Length of time since the opening of the earliest financial account

 

Find out why so many companies are using our proven methods to improve their business credit scores.

Equifax Business Failure Score

Finally, Equifax’s Business Failure Score looks at the risk of your company closing. It ranges from 1,000 to 1,600, assessing these aspects:

  • Total balance to total current credit limit average utilization in the previous three months
  • How much time since the opening of the oldest financial account
  • Your business’s worst payment status on all trades in the previous 24 months
  • Documentation of any non-financial transactions (e. g. supplier invoices) which are past due or have gotten on fee off for two or more billing cycles.

Equifax Scoring Analysis

For the credit risk as well as business failure scores, a rating of 0 means bankruptcy.

An amazing Equifax score for your firm is as follows:

  • Payment Index 0 – 10
  • Credit Score 892 – 992
  • Business Failure Score 1400 – 1600

4. Free Credit Score for Business: FICO Business Credit Scores

FICO uses its SBSS (Small Business Scoring Service) Score to integrate consumer bureau, economic, application, and business bureau data. FICO then validates their SBSS models for transactions such as Line of Credit transactions, Term Loans, and Commercial Card obligations which go up to $1 million. Their idea is to examine how your company pays back all kinds of loans. http://www.fico.com/en/node/8140?file=6045

Business credit providers make use of the FICO SBSS score as a tool to determine whether they should authorize a loan to your business at all.

The SBA uses this score too, to authorize or approve company loans. It has a basis in your company and consumer credit history as well as not simply your business’s financial health.

The score factors in the evaluation of the risks inherent in your company’s credit applications. With SBSS, lenders make their determinations in a matter of hours, instead of days. Lenders are more confident in their lending judgments, and your company gets quicker decisions on your loan applications.

The SBA’s Participation

The FICO Small Business Score or SBSS score is the main figure that the SBA thinks about while figuring out to approve a loan, especially when it involves the SBA’s 7(a) loans.

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Computing a FICO SBSS Score

The FICO SBSS Score shows the likelihood or probability of you, the candidate, covering your month-to-month bills in a timely manner. The score runs from 0 to 300. A higher score means lower risks and commonly generates more favorable credit terms. The score originates from your company as well as personal history of credit use together with your company’s financial data. Variables also include your company’s age, and its years or complete time in business.

Since 2014, all SBA 7(a) loans must go through a business credit score pre-screen, as well as for SBA loans, you could perhaps not get an approval if you had a score less than 140. However the cutoff was typically set to 160, and frequently, a score below 160 meant a rejection. A lot of lending institutions will only accept scores over 160 or 180, to lend as much as $1 million. But a rating lower than 160 or 180 can still qualify you for a smaller loan.

The formula for the FICO SBSS Score is as follows:

  • The last year of PAYDEX scores from Dun & Bradstreet
  • Amounts and types of any judgements against your firm
  • The amounts and kinds of any liens against your company’s real or personal property.
  • Your firm’s available resources
  • Your company’s profit
  • Plus other, less distinct monetary information

If you have no document of company credit and had a modest or short time in your business, then the possible greatest FICO SBSS score you can possibly anticipate is 140.

Usage and Sorts of SBSS Model Lenders

A FICO SBSS rating includes the choice to opt for certain models which are market-specific for enhanced and better decision making. As an example, one model is an agricultural leasing and lending model. Another model was made especially for Canada. Additionally, the insights of the SBSS score provide support for the SBRI (Small Business Risk Insight, from Dun & Bradstreet) and the SBFE (Small Business Financial Exchange) information repositories.

Validating the SBSS models is necessary for credit lines, commercial cards, as well as term loans of as much as one million dollars. If you are asking for one million dollars or less from bank financing, then there are chances that your SBSS score will be under review.

The Kind of Information in the Score

The SBSS provides the credit issuers of businesses different information blends to make sure that they can analyze your company’s credit risks. For instance, a specific issuer of credit can choose only to assess a concept proprietor’s application data, or the credit issuer can choose to consist of one or multiple business bureaus’ information.

Or the credit issuer can only decide to prioritize one element over another. This intelligent rating originates from various business bureaus on an automated basis, in any type of order or whatever priority the issuer of the credit chooses. As a result, if the loan provider chooses the score of Dun & Bradstreet’s PAYDEX as its default, the SBSS will pull that set of data.

SBSS Credit Offer Index: Just How It Works and Why It Is Important

The Credit Index is an aspect of the FICO SBSS Credit Score for your small business, made to aid credit issuers understand your capacity. It works as the standards against all businesses with comparable profiles.

The SBSS Credit Offer Index includes economic application details, business bureau documents, and credit bureau information for consumer. It provides a percentile ranking of the present against other smaller companies with identical or similar features and total requested money from all those businesses.

The Updated SBSS

Reporting agencies like Experian power the newer FICO SBSS Score model. The SBFE data might be used to prepare for charge-offs, bankruptcy, or three plus cycles overdue or misbehavior over a duration of two years.

5. Free Credit Score for Business: SBA Credit Scoring

The SBA’s tool has a basis in FICO. Their idea is to speed up their credit decisions for loan approvals. The tool uses several information sources and over one hundred combinations of company and consumer analytical models. They use a designated cutoff. https://www.sba.gov/offices/district/mo/st-louis/resources/small-business-loan-credit-scoring

Their general stats on their over $60 billion profile show that companies with ratings at, or above the assigned cut-off will have excellent payment history. So in a way, this isn’t a free credit score for business – it’s more of a score derived from other scores.

Just How Do You Enhance Your Business Credit Scores?

The big question has arrived, and while there is no golden solution, these concepts can definitely assist you increase your rating.

Make Your Payments on Schedule

Your payment patterns and history are a driving force in your overall credit score. Over time, paying your bills promptly will help establish your company as one that pays their financial obligations. This will inevitably help push your rating up as well as show other firms you are a low risk.

Keep Your Debt-to-Income Ratio in Check

The more debt you have on your plate, the more invoices you have, and the less disposable income you have. If your total debt approaches or exceeds your income level, then you’re more than likely to be seen as high-risk.

Keep your financial obligations in check and consistently pay them off to keep a healthy balance between what you make and what you owe.

Use Your Credit

Keeping your financial obligations low remains sound advice. Still, opening and sensibly benefiting from business credit accounts can help you broaden your available credit and improve your credit score.

Maintain a Healthy Personal Credit Profile

By now, you know that your own personal credit is fair game when it involves your Intelliscore Plus rating. Running a company is difficult work, however don’t let your personal finances suffer. Make certain that you remain on top of your individual monthly bills, stay clear of unnecessary credit inquiries, and refrain from compromising your personal credit for business needs.

Check Your Credit Reports

Regardless of what your credit score is, it is critical that you continue to be attentive and evaluate your personal and business credit reports. This can help you locate possible problems and stay educated by yourself credit profile.

Free Credit Score for Business: Takeaways

When you recognize where to check your free credit score for business, you have a much better chance of getting on top of it, and staying there.

 

 

The post 5 Amazing Ways You Can Get a Free Credit Score for Business appeared first on Credit Suite.

3 Common Sense Ways to Get Start Up Business Loans for Women

And a Bonus Secret that Will Help Get Start Up Business Loans for Women More Easily

There is a storm brewing in the distance.  Can you see the clouds building?  Can you hear the thunder rolling? There is electricity in the air.  Animals are acting strange.  They know the tide is turning.  Women are taking the business world by storm as more and more women owned businesses are starting up each year.  As a result, more and more are looking into start up business loans for women.

The problem is, despite the growth in women owned businesses, females still seem to get an unfair slice of the funding pie.  For some reason, women and women owned businesses are seen as a greater funding risk than men and businesses owned by men.

How then are female entrepreneurs ever supposed to get up and running?  While we cannot erase a sexist system overnight, a lot can be said for being completely prepared when going to apply for a startup loan.  If the choice is between a female applicant that has all her ducks in a row and a male applicant that just threw things together, then the female applicant at least has a better chance than she would otherwise.  Consequently, it pays to be prepared.

Here are 3 Common Sense Ways to Get Start Up Business Loans for Women

There are a lot of things that any borrower can do to make their odds of loan approval higher.  Here are just a couple:

Learn business loan secrets with our free, sure-fire guide.

1.      Get Your Finances in Order

Every lender is going to need to see a number of things related to finances to ensure you are able to repay the loan.  Most noteworthy are the following:

  • All income sources
  • Balances of all bank accounts
  • Any other assets, income producing or not
  • Tax returns for the past three years

Certainly, if you are planning on getting a secured loan, they will need all the information on whatever assets you intend to use for collateral.  That means titles, liens, registrations, etc.  Having these things ready to go can be very beneficial to you during the application process.  It can make things go much smoother.

2.      Have an Awesome Business Plan

This often gets missed, even though it is vitally important.  You can’t just throw it together, even more so when looking for start up business loans for women. Sometimes an application will have a series of questions or a template to fill out meant to act as a business plan, but this is not what you want to use.

A professional small business development plan should include:

The Overview

  • An Executive Summary – This is a complete summary of the business idea.
  • Description – The description goes into further detail than the summary, describing the business. What type of business is it? What product or service will it offer? This is where you work to get others excited about your business.
  • Strategies – Lay out your plan for getting started. Do you have a marketing plan, area in mind for location, or idea of how many employees you will start with? What is your ramp up plan?

The Plan

  • Market Analysis – This actually includes two parts. All that market research you did goes here:

o Analysis of audience: What need will your business fill, and for who? How will your business fill the need? This is where you will include that information.

o Competitive Analysis: Is there a business already filling this need? Is there room for more? What makes your business better than theirs?

  • Plan for Design and Development – How is all of this going to play out, from start to finish. Step by step, what are you going to do? This section includes more detail than the strategies section.
  • Plan for Operation and Management – Who will own the business and who will handle daily management? This could just a statement that you are the only owner and the manager, or it could be a complete plan for a partnership plan or board or directors’ format. It depends on how you intend for your business to work. Will you be the hire a manger? This is you would say that.

Show Them the Money

  • Financial Information – A lot of new business owners get lost here. How do you have financial information if there is not a business yet? This is where you detail your funding plan. How much money do you have? Where did it come from? How much more do you need? How will you use the funds? A complete set of financial projections will go here also, typically for out to at least five years in the future. If possible, it is best to have an accountant compile your projections.

To get ahead of the competition even further, hire a professional business plan writer if you can. They can work with you to gather all the necessary information and compile it into the traditional, acceptable format. As someone trying to get start up business loans for women, you need every advantage you can get.

If you cannot hire a business plan writer however, there are a number of resources that can help you. The Small Business Administration offers a template, and your local small business development center can help as well.

Learn business loan secrets with our free, sure-fire guide

 3.Get Certified as an Official Woman-Owned Small Business

This tip is unique to women owned businesses, meaning it is another advantage you can have over businesses run primarily by male entrepreneurs.  While this certification does not mean you are guaranteed anything in the realm of start up business loans for women, it could be a determining factor depending on what variables the lender may be working with.

How to Get Certified

There are two options for businesses who wish to qualify as a certified woman-owned small business (WOSB).  The Federal Contract Program will let business owners self-certify.  The other option is to work with one of the four SBA approved third party certifiers. There is no advantage of one over the other, except that it is free to self-certify, while there is a fee for a third-party certification.

What is Required to Self-Certify?

The first step is to look over the requirements for eligibility.  Number one is that a business must have one or more women who are U.S. Citizens in control through ownership (at least 51%) and management.  They cannot just be an owner but the primary manager be male, nor can the primary manager be a female but the owner be a male.  This ownership must be direct and non-conditional.   The day to day of the business has to be handled by a woman, and a woman must make the long-term decisions related to the business.  In addition, the female must hold the highest position of office and cannot be employed outside of the business.  This woman must also work full time during business hours to qualify.

What Does Certification Get You?

The certification program is designed to make women owned businesses more visible as such.  It doesn’t afford these businesses any sort of special treatment and it is not a charity program.  It can, however, make them stand out to those contractors and lenders who are working to reach goals specific to certain types of businesses, including those owned by women.

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Where are These Loans?

Okay, so if you are looking for start up business loans for women, you probably think a traditional bank is your only option. It’s really not.  In fact, depending on your situation, it may not even be your best option.

The thing about traditional loans from standard lending institutions is that you generally need to have security, a lot of income, and a stellar personal credit score.  If you have all that, great!  However, many entrepreneurs looking for start up business loans for women do not have all three of these things.  That can make getting loans from a regular bank difficult.

Non-traditional Lenders

These are lenders that generally function online only.  In addition to faster processing and approval times, meaning you get your funds faster, they also often have less stringent credit and income requirements.  It is actually often easier to get start up business loans for women from a non-traditional lender.

The thing to remember is few lenders offer loans specifically for women.  The key is to overcome the gender gap in business loan approvals as a whole.

Where Are the Best Places to Look for Start Up Business Loans for Women?

Learn business loan secrets with our free, sure-fire guide

You need to shop around for the best options for your specific business, but this list is a great place to start.

Grameen

Microloans are a great option for start up business loans for women, and Grameen is one of the few lenders that offers microloans specifically for women.  The loan amounts range from $2,000 to $15,000, and they also offer financial training and support.

Payments are reported to Equifax and Experian, meaning these loans help borrowers build their credit.

SBA Partner Lenders

These are going to be traditional lenders that partner with the Small Business Administration to offer loans to those that may not typically qualify.  The SBA does not offer loans themselves, but rather they secure loans for borrowers with partner banks, thus allowing for a little more wiggle room when it comes to income and credit score.

That doesn’t mean these loans are easy mind you.  While interest rates are typically lower, and the minimum credit score is somewhat lower than what a bank would typically require, the application process is notably lengthier and more complex.  The reduced interest rate and lower credit minimum makes it a good option for start up business loans for women however.

SBA Loan Programs

There are multiple loan programs available through the SBA.  The best option for many women as far as startup loans is the SBA microloan program. Similar to Grameen, it offers smaller amounts of money, up to $50,000, for micro businesses and startups.

start up business loans for women credit suite2

Kiva

Kiva is a rare bird. They offer loans to businesses, but their platform is much different than that of traditional or even nontraditional lenders.  It is a breed of its own.  Rather, it is sort of a cross breed between crowdfunding and lending.  They offer loans with a 0% interest rate. Even though you have to pay it back, it is absolutely free money. They do not run a credit check either. The only requirement is that you have to get at least 5 family members or friends to donate money for your business, and you yourself have to give at least a $25 loan to another business on the platform.

Bonus!  Use All Available Resources

Since we already gave you three ways to get start up business loans for women, I’ll offer up a bonus tip.  Use all the resources available to help you find all the funding you need.  There are a ton of places to find support, networking, and even money to help you get your business off the ground and growing.

This agency helps female entrepreneurs by offering programs that SBA district offices coordinate. These programs include counseling, federal contracts, business training, and access to capital and credit.

These centers seek to level the playing field for all women entrepreneurs, who still face unique obstacles in the business world.

This is a federal advisory council that is non-partisan in nature.  It serves as a source of advice and counsel to the Small Business Administration, Congress, and even the President.  It is the government’s only independent voice for female business owners.

All it Takes to Find Start Up Business Loans for Women Is a Little Common Sense

Here is what it boils down to.  There are not a ton of startup loans specifically for women, but there are some ways that women can increase their chances of loan approval with just a little common sense.

  • Know what lenders are looking for and be prepared.
  • Have a killer business plan that is both complete and professional looking.
  • Get certified as a woman owned small business.
  • Bonus! Use all the resources available to you.

Of course, business credit can do a lot to boost your chances as well.  And find out more about building business credit.

 

 

 

 

 

 

 

The post 3 Common Sense Ways to Get Start Up Business Loans for Women appeared first on Credit Suite.

Financial Obligation Management Plans– Suggesting Ways to Survive the Quagmire of Debts

Financial Obligation Management Plans– Suggesting Ways to Survive the Quagmire of Debts

It is a false impression amongst lots of individuals that financial debt administration strategies can just be made use of for removing the existing pile of financial debts. As the name recommends, financial debt monitoring strategies might be utilized with benefit to take care of the financial debts to a specific degree. It should be recognized that an appropriate administration of financial debts makes financial debt loan consolidation as well as various other techniques utilized to combat the hazard of financial debts unnecessary.

The function played by financial obligation administration strategies in functioning with the financial obligations currently sustained might not be marked down. Lots of people owe their monetary survival to the financial obligation combination fundings that aided them counter insolvency and also various other financial debt associated troubles.

The writer has actually attempted to show the precautionary in addition to protective uses financial debt administration strategies via this post. Given that the protective component of the financial debt administration strategy is extra commonly utilized, we will certainly initially go over the numerous strategies to handle financial obligations that a private or company has actually currently sustained. The numerous financial obligation monitoring prepares that can be found in this group are as complies with:

– Debt loan consolidation lendings
The most traditional technique of dealing with financial debts is financial obligation loan consolidation financings. One facet that differentiates financial debt loan consolidation lending from various other financings is that the debtor obtains aid and also support from the financial obligation combination funding service provider in the negotiation of financial obligations.

– Debt debt consolidation home mortgage
Financial obligation loan consolidation home loan makes up a significant component of the financial obligation administration strategies. The benefit of the financial debt administration strategy is that money is offered for financial obligation combination at prices equal to a home loan, i.e. at low-cost price of rate of interest.

– Debt debt consolidation with remortgage
While financial debt combination home loan involves taking care of the exact same home loan provider, financial obligation loan consolidation with remortgage entails moving to a home mortgage lending institution that provides a far better interest rate. In this financial debt monitoring strategy, the debtor or the debtor demands the brand-new home loan lending institution to consist of numerous financial debts in addition to the overdue quantity on the initial home loan for dispensation. Once again, this will certainly aid the debtor obtain less expensive money for financial obligation combination at the prices of a home loan.

– Debt debt consolidation via bank card
Credit history card as a financial obligation monitoring strategy will certainly be specifically beneficial when the borrower desires a quicker negotiation of financial debts. As in home mortgages as well as lendings, a credit report card individual need not wait for the financial obligation monitoring strategy to be authorized as well as approved.

– Debt debt consolidation with house equity financings
Residence equity finance is a protected financing taken versus the equity in ones house. A residence equity financing is a multi-purpose financing that can be utilized with equivalent benefit whether in a financial debt administration strategy or for making house renovations.

– Debt debt consolidation via financial obligation negotiation.
This type of financial debt administration strategy entails relating to a financial debt negotiation business. The financial obligation negotiation business undertakes to pay off the financial obligations while the borrower pays off the quantity with little regular monthly instalments to the financial obligation negotiation firm.

As reviewed over, the precautionary approaches are similarly vital techniques used to prevent the event of financial debts. Financial debt coaching intends to convey financial debt monitoring training to people as well as companies.

The protective financial obligation administration prepares having actually paid back the financial debts, do not offer enough warranty of the threat of financial debts not elevating its head once again. There is a requirement to finish the cycle of the financial obligations, as well as the preventative component of financial debt administration strategies will certainly be specifically handy on this matter.

It has to be recognized that an appropriate administration of financial debts makes financial debt loan consolidation as well as various other approaches utilized to battle the threat of financial obligations unneeded. One element that differentiates financial debt combination financing from various other finances is that the consumer obtains aid and also advice from the financial debt combination financing supplier in the negotiation of financial debts. Financial debt consolidation home mortgage makes up a significant component of the financial obligation monitoring strategies. Debt card as a financial obligation monitoring strategy will certainly be particularly helpful when the borrower desires a quicker negotiation of financial debts. Financial obligation therapy intends to convey financial obligation administration training to people as well as organisations.

The post Financial Obligation Management Plans– Suggesting Ways to Survive the Quagmire of Debts appeared first on Buy It At A Bargain – Deals And Reviews.

Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In

How to Tell the Difference Between Legit Creditors and Predators Out to Eat You Alive

Watch any animal reality show and you will see what happens between predators and prey.  In a similarly menacing way, some lenders actually prey on unsuspecting borrowers.  Not only do they leave finances in ruins, but often the trail of destruction trails across their entire lives.  They basically eat their prey alive.  How can you avoid falling victim to these devilish creatures?  We are going to show you how to tell the difference between legit creditors and predators, so that you can survive in the credit wilderness.

Know Thy Enemy: What is Predatory Lending

According to Investopedia: “Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Basically, just like predators in the wild, predatory lenders take advantage of the weak.  They look for those that are unassuming, easily tricked into coming closer, and without suitable defenses.  Then they pounce.

In the wild, predators often disguise themselves as something else.  Consider the venus fly trap.  To the fly, it looks like a flower.  The fly saunters over to enjoy the beauty, and snap!  It’s gone before it even knows what hit it.  That is the peril of a predatory lender.  It looks great, inviting even. Before you know it, however, they trap you.  The best protection you can have is to know the difference between creditors and predators.  Don’t be fooled.  Learn the signs and build your defenses.  Know thy enemy.

Common Signs that a Creditor is Actually a Predator

The only way to tell the difference between creditors and predators is to know the signs of a predator.  They are not that hard to spot if you know what tricks to look for.

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Payment is King

If you are trying to get a loan and the “creditor” continues to emphasize what your payment will be, while downplaying how much the actual loan is, that creditor might be a predator.  While a monthly payment is obviously important for budgeting purposes, you need to know all the terms of the loan.

A lender can use many tactics to ensure your monthly payment is where you need it to be to fit your budget.  They can increase the loan period, adjust terms, and add balloons to make things look much better than they really are.  The result is that you get a really bad loan in exchange for a temporary lower payment.

Burst the Balloon

Speaking of balloon loans, those are also a common predatory lending practice.  They use them to provide unsuspecting borrowers with a low monthly payment for most of the loan.  Most borrowers do not realize that they are typically only covering the interest for each month.

In fact, usually the principle isn’t reduced at all by payments until the very end of the loan.  The final payment ends up being a large “balloon” payment that should pay off the entire principal of the loan all at once.  Most of the time borrowers are not prepared for this, and they end up either refinancing or defaulting.

Unpack the Packing:  Unnecessary Baggage

Packing is another practice that predatory lenders seem to lean towards.  It involves them adding extras onto the loan.  You do not need these extras, and they add them without your knowledge.  The most common culprits are insurance products that are not necessary for your situation.  You pay for them without realizing it, and they offer you no benefit.

Excessive Points and Fees

It’s not uncommon for lenders to charge points and fees on a loan.  It is a practice that some use to increase profits.  As a general rule, one point is worth one percent of the loan balance.

Asking for more points and higher fees than is normal for the type of loan you are getting can be a sign of predatory lending.  If you feel that is what is going on, dig deeper.

How do you know what is “normal” and what is excessive? As a general rule, three points, or 3% of the loan amount or less, is a decent deal.  This includes appraisals and title insurance, which are necessary.  Research to see what is normal for your area, but know this is a good rule of thumb.

The New York Connection: Of Creditors and Predators and Judgements and Confessions

New York plays a unique role in the predatory lending drama.  Knowing this can provide a pivotal clue when trying to determine if you are about to become prey. In New York, state law is friendly to confessions of judgement. Cash -advance companies, which are a huge faction of the predatory lending family, almost always make borrowers sign one of these as a loan condition.

If a borrower signs a confession of judgment, they are basically agreeing to lose in a court battle if a dispute arises about repayment. Regardless of where these types of loans take place, almost all of them contain a New York confession of judgement.  If you see one of these in your loan documents, run.

Punishment for Paying Early

If they are going to charge a prepayment penalty, you should be wary.  Early payment is a good thing, even though the lender loses some interest.  It isn’t a deal breaker, but it should definitely cause you to look for other red flags and proceed with caution.

Obviously Seeking the Weak

Senior citizens, those with no credit or bad credit, minorities, those considered low income are all easy targets.  They are more likely that others to get tangled up with predatory lenders, according to a 2015 Center for Responsible Lending report. Stay away from lenders that advertise in a way that targets these populations.

Language such as “bad credit doesn’t matter” is a definite sign.  In addition, lenders that initiate contact unprovoked and those that try to rush your decision are bad news.

It’s a Bad Deal Now, but They’ll Fix It

Lenders that are searching for prey may try to get borrowers to sign on to a bad deal by promising to make it better in a future refinance.  Do not fall for this.  A bad deal is a bad deal.  Just walk away.

Loan “Flipping” is NOT the Same a House “Flipping”

Flipping a house in real estate terms can actually be very profitable.  However, loan flipping is something else altogether, and predatory lenders are great at it.  When they see you struggling, they offer a refinance.  While it may lower your payments, you end up paying points and fees again.  Eventually you end up owing more than ever on your house, car, or whatever it is you used as collateral.

It is a vicious cycle that can bury you quickly.

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The Payment Isn’t “All In”

This is typically and issue with predatory lending in mortgages.  Inquire from the beginning as to whether there will be an escrow account set up for your required tax and insurance payments.  Lenders that are not on the up and up will often make payments look super low because they do not include all the costs a borrower is responsible for.

What Are Some Questions I Can Ask to Help Discern Between Good Creditors and Predators?

Protecting yourself means recognizing these signs, they will not always be obvious.  Sometimes you need to look a little closer.  Asking these questions, whether to yourself or to the lender, can help you get to the root of the issue.

  • Is the offer too good to be true?

As with almost anything in life, if it seems too good to be true, it probably is.

  • What does the product truly cost?

If the lender doesn’t spell it out for you, do the math yourself.  If you need help understanding it all, find someone you trust that can walk you through it.  You need to know exactly what this loan is going to cost you.  That means all fees, points, insurance, and taxes need to be clear before you can make an educated decision.

  • Does the lender check my ability to repay?

It is ridiculous to think you will get a loan without the lender ensuring you can repay.  It doesn’t have be a credit check. If they do not at least verify income or employment however, there is almost certainly a problem.

  • Does the lender help me build credit?

Not all lenders do this, but if they do help you build your credit score, it is a point in their favor.

  • Does the lender require electronic payments?

While there is nothing wrong with paying electronically, the requirement that electronic payments are the only way you can pay should throw up a red flag.

  • Have others complained about the lender?

Check out reviews online.  Look them up on the Better Business Bureau’s website at BBB.org.  Find out if others have had a good experience with the lender, or not.

Is Anyone Doing Anything to Separate Creditors and Predators?

In recent years there has be a push by legislators to put an end to predatory lending practices.  There have been safety nets in place for far longer however.  What is being done?  Does anyone care?  Actually, yes, they do.

The Truth in Lending Act

It really started way before now with the Truth in Lending Act of 1968.  This Act requires that lenders clearly communicate the sum of all payments, APR, and amount to be paid in interest and fees.  In addition, the total credit that is being extended must be made clear.  All of this has to be disclosed before a loan contract is signed.

Another component of the Truth in Lending Act is that a borrower has the right of rescission.  This means that with certain loans, borrowers have three days to cancel after signing.

The Consumer Financial Protection Bureau

After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau was born.  The goal of the CFPB is to help oversee federal laws that protect consumers financially.  They have resources that can help borrowers learn to decipher loan terms and risks, and also help them report and resolve any complaints they may have against lenders.

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Signs of a Good Lender

Telling the difference between good creditors and predators means more than just knowing how to spot the bad guys.  There are things to look for that can clue you in as to whether a lender is actually good, or if they are just not a predator.  There is a gray area, and even reputable lenders can fall into poor practices.

Knowing that, keep in mind that legitimate lenders will always check your ability to pay.  They may rely on a credit check or some other means.  In addition, they will not pressure you.  The best will actually offer tools to help educate you financially so that you can better understand the details of the loan.

Also, a good lender will have few complaints.  Consumers will almost always complain liberally if they feel like they were ripped off.  In addition to BBB.org, check out the CFPB Complaint Database and the Federal Trade Commission’s scam alerts.  While even good lenders get complaints occasionally, a long history of dissatisfied customers is a huge warning sign.

Other Ways to Protect Yourself

Like I said, the best way to know the difference between creditors and predators, and avoid becoming a predator’s prey, is to educate yourself.  Here are some additional sources for doing just that:

  • The Money & Credit page on the Federal Trade Commission’s website has tons of educational articles on a broad variety of topics including debt, credit and loans.
  • The Ask CFPB pageincludes answers to hundreds of questions related to personal finance, many of which you can apply to business finance as well.
  • The attorney general’s officein your specific state will be able to help if you need to submit complaints.  They can also help you understand consumer protections in your own area.

Learn the Difference Between Legit Creditors and Predators to Avoid Problems with Personal and Business Finance

Predatory lending is prevalent in the realm of personal finance, but that does not mean that business finances are unaffected.  Many business loans are dependent on personal credit scores, which a bad loan from a predatory lender can devastate.  This is one reason building business credit is so important.

The fact is, however, a bad loan is like a predatory parasite. It seeks out the weak, and once it attacks, it attaches itself to your finances and plagues every aspect of them, even slipping to the business realm if left unattended.  It can cause devastation that could last for years. Don’t let it happen to you.  Learn the signs, and make sure you can tell the difference between creditors and predators.

 

 

 

 

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Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In

How to Tell the Difference Between Legit Creditors and Predators Out to Eat You Alive

Watch any animal reality show and you will see what happens between predators and prey.  In a similarly menacing way, some lenders actually prey on unsuspecting borrowers.  Not only do they leave finances in ruins, but often the trail of destruction trails across their entire lives.  They basically eat their prey alive.  How can you avoid falling victim to these devilish creatures?  We are going to show you how to tell the difference between legit creditors and predators, so that you can survive in the credit wilderness.

Know Thy Enemy: What is Predatory Lending

According to Investopedia: “Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Basically, just like predators in the wild, predatory lenders take advantage of the weak.  They look for those that are unassuming, easily tricked into coming closer, and without suitable defenses.  Then they pounce.

In the wild, predators often disguise themselves as something else.  Consider the venus fly trap.  To the fly, it looks like a flower.  The fly saunters over to enjoy the beauty, and snap!  It’s gone before it even knows what hit it.  That is the peril of a predatory lender.  It looks great, inviting even. Before you know it, however, they trap you.  The best protection you can have is to know the difference between creditors and predators.  Don’t be fooled.  Learn the signs and build your defenses.  Know thy enemy.

Common Signs that a Creditor is Actually a Predator

The only way to tell the difference between creditors and predators is to know the signs of a predator.  They are not that hard to spot if you know what tricks to look for.

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Payment is King

If you are trying to get a loan and the “creditor” continues to emphasize what your payment will be, while downplaying how much the actual loan is, that creditor might be a predator.  While a monthly payment is obviously important for budgeting purposes, you need to know all the terms of the loan.

A lender can use many tactics to ensure your monthly payment is where you need it to be to fit your budget.  They can increase the loan period, adjust terms, and add balloons to make things look much better than they really are.  The result is that you get a really bad loan in exchange for a temporary lower payment.

Burst the Balloon

Speaking of balloon loans, those are also a common predatory lending practice.  They use them to provide unsuspecting borrowers with a low monthly payment for most of the loan.  Most borrowers do not realize that they are typically only covering the interest for each month.

In fact, usually the principle isn’t reduced at all by payments until the very end of the loan.  The final payment ends up being a large “balloon” payment that should pay off the entire principal of the loan all at once.  Most of the time borrowers are not prepared for this, and they end up either refinancing or defaulting.

Unpack the Packing:  Unnecessary Baggage

Packing is another practice that predatory lenders seem to lean towards.  It involves them adding extras onto the loan.  You do not need these extras, and they add them without your knowledge.  The most common culprits are insurance products that are not necessary for your situation.  You pay for them without realizing it, and they offer you no benefit.

Excessive Points and Fees

Predatory Lenders Credit Suite

It’s not uncommon for lenders to charge points and fees on a loan.  It is a practice that some use to increase profits.  As a general rule, one point is worth one percent of the loan balance.

Asking for more points and higher fees than is normal for the type of loan you are getting can be a sign of predatory lending.  If you feel that is what is going on, dig deeper.

How do you know what is “normal” and what is excessive? As a general rule, three points, or 3% of the loan amount or less, is a decent deal.  This includes appraisals and title insurance, which are necessary.  Research to see what is normal for your area, but know this is a good rule of thumb.

The New York Connection: Of Creditors and Predators and Judgements and Confessions

New York plays a unique role in the predatory lending drama.  Knowing this can provide a pivotal clue when trying to determine if you are about to become prey. In New York, state law is friendly to confessions of judgement. Cash -advance companies, which are a huge faction of the predatory lending family, almost always make borrowers sign one of these as a loan condition.

If a borrower signs a confession of judgment, they are basically agreeing to lose in a court battle if a dispute arises about repayment. Regardless of where these types of loans take place, almost all of them contain a New York confession of judgement.  If you see one of these in your loan documents, run.

Punishment for Paying Early

If they are going to charge a prepayment penalty, you should be wary.  Early payment is a good thing, even though the lender loses some interest.  It isn’t a deal breaker, but it should definitely cause you to look for other red flags and proceed with caution.

Obviously Seeking the Weak

Senior citizens, those with no credit or bad credit, minorities, those considered low income are all easy targets.  They are more likely that others to get tangled up with predatory lenders, according to a 2015 Center for Responsible Lending report. Stay away from lenders that advertise in a way that targets these populations.

Language such as “bad credit doesn’t matter” is a definite sign.  In addition, lenders that initiate contact unprovoked and those that try to rush your decision are bad news.

It’s a Bad Deal Now, but They’ll Fix It

Lenders that are searching for prey may try to get borrowers to sign on to a bad deal by promising to make it better in a future refinance.  Do not fall for this.  A bad deal is a bad deal.  Just walk away.

Loan “Flipping” is NOT the Same a House “Flipping”

Flipping a house in real estate terms can actually be very profitable.  However, loan flipping is something else altogether, and predatory lenders are great at it.  When they see you struggling, they offer a refinance.  While it may lower your payments, you end up paying points and fees again.  Eventually you end up owing more than ever on your house, car, or whatever it is you used as collateral.

It is a vicious cycle that can bury you quickly.

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The Payment Isn’t “All In”

This is typically and issue with predatory lending in mortgages.  Inquire from the beginning as to whether there will be an escrow account set up for your required tax and insurance payments.  Lenders that are not on the up and up will often make payments look super low because they do not include all the costs a borrower is responsible for.

What Are Some Questions I Can Ask to Help Discern Between Good Creditors and Predators?

Protecting yourself means recognizing these signs, they will not always be obvious.  Sometimes you need to look a little closer.  Asking these questions, whether to yourself or to the lender, can help you get to the root of the issue.

  • Is the offer too good to be true?

As with almost anything in life, if it seems too good to be true, it probably is.

  • What does the product truly cost?

If the lender doesn’t spell it out for you, do the math yourself.  If you need help understanding it all, find someone you trust that can walk you through it.  You need to know exactly what this loan is going to cost you.  That means all fees, points, insurance, and taxes need to be clear before you can make an educated decision.

  • Does the lender check my ability to repay?

It is ridiculous to think you will get a loan without the lender ensuring you can repay.  It doesn’t have be a credit check. If they do not at least verify income or employment however, there is almost certainly a problem.

  • Does the lender help me build credit?

Not all lenders do this, but if they do help you build your credit score, it is a point in their favor.

  • Does the lender require electronic payments?

While there is nothing wrong with paying electronically, the requirement that electronic payments are the only way you can pay should throw up a red flag.

  • Have others complained about the lender?

Check out reviews online.  Look them up on the Better Business Bureau’s website at BBB.org.  Find out if others have had a good experience with the lender, or not.

Is Anyone Doing Anything to Separate Creditors and Predators?

In recent years there has be a push by legislators to put an end to predatory lending practices.  There have been safety nets in place for far longer however.  What is being done?  Does anyone care?  Actually, yes, they do.

The Truth in Lending Act

It really started way before now with the Truth in Lending Act of 1968.  This Act requires that lenders clearly communicate the sum of all payments, APR, and amount to be paid in interest and fees.  In addition, the total credit that is being extended must be made clear.  All of this has to be disclosed before a loan contract is signed.

Another component of the Truth in Lending Act is that a borrower has the right of rescission.  This means that with certain loans, borrowers have three days to cancel after signing.

The Consumer Financial Protection Bureau

After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau was born.  The goal of the CFPB is to help oversee federal laws that protect consumers financially.  They have resources that can help borrowers learn to decipher loan terms and risks, and also help them report and resolve any complaints they may have against lenders.

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Signs of a Good Lender

Telling the difference between good creditors and predators means more than just knowing how to spot the bad guys.  There are things to look for that can clue you in as to whether a lender is actually good, or if they are just not a predator.  There is a gray area, and even reputable lenders can fall into poor practices.

Knowing that, keep in mind that legitimate lenders will always check your ability to pay.  They may rely on a credit check or some other means.  In addition, they will not pressure you.  The best will actually offer tools to help educate you financially so that you can better understand the details of the loan.

Also, a good lender will have few complaints.  Consumers will almost always complain liberally if they feel like they were ripped off.  In addition to BBB.org, check out the CFPB Complaint Database and the Federal Trade Commission’s scam alerts.  While even good lenders get complaints occasionally, a long history of dissatisfied customers is a huge warning sign.

Other Ways to Protect Yourself

Like I said, the best way to know the difference between creditors and predators, and avoid becoming a predator’s prey, is to educate yourself.  Here are some additional sources for doing just that:

  • The Money & Credit page on the Federal Trade Commission’s website has tons of educational articles on a broad variety of topics including debt, credit and loans.
  • The Ask CFPB pageincludes answers to hundreds of questions related to personal finance, many of which you can apply to business finance as well.
  • The attorney general’s officein your specific state will be able to help if you need to submit complaints.  They can also help you understand consumer protections in your own area.

Learn the Difference Between Legit Creditors and Predators to Avoid Problems with Personal and Business Finance

Predatory lending is prevalent in the realm of personal finance, but that does not mean that business finances are unaffected.  Many business loans are dependent on personal credit scores, which a bad loan from a predatory lender can devastate.  This is one reason building business credit is so important.

The fact is, however, a bad loan is like a predatory parasite. It seeks out the weak, and once it attacks, it attaches itself to your finances and plagues every aspect of them, even slipping to the business realm if left unattended.  It can cause devastation that could last for years. Don’t let it happen to you.  Learn the signs, and make sure you can tell the difference between creditors and predators.

 

 

 

 

The post Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In appeared first on Credit Suite.

SEO Doesn’t Have to be a Long-Term Game: There Are Quicker Ways to Get Results

Everyone thinks SEO is a long-term game… that you have to wait months if not years to see results. And, maybe that was the case a few years ago when content was still king.

With Google making 3200 algorithm changes in just one year, their goal isn’t to make a website wait a year or two before they are able to achieve a top spot.

Instead, they want to show the user the right site as quick as possible. It doesn’t matter if the site has been around for 10 years, or 10 days.

How SEO has changed

It used to be that if you want to rank well, you would have to create tons of long-form content and build links.

Or have a really aged domain with history. But as Google has clearly stated, having an older domain or even a new domain won’t affect your rankings.

And sure, those things still matter today. But there are over 200 factors in Google’s algorithm.

In other words, there are other tactics that produce quick results.

For example, a few weeks I wrote a blog post about FAQ schema and how you can see the difference with your Google listing in 30 minutes.

Literally, 30 minutes.

That kind of stuff wasn’t possible before.

And SEO is no longer just a game of ranking on Google. There are tons of popular search engines like YouTube, in which you can get results in 24 hours.

Their algorithm is a bit different than Google’s in which if a video does really well in the first 24 hours of it being released, it will get shown more and rank higher.

In essence, you can take a top spot on YouTube in just days, no matter how competitive the term maybe.

You are full of it Neil?

Look, I’m not trying to say you can rank for “auto insurance” on Google within 24 hours or achieve unrealistic results, but you can drastically grow your search traffic in a reasonable time if you follow the right tactics.

It doesn’t matter if you have a new website or an old one.

So how do you get results faster? What’s the secret?

Well, I have a Master Class that will teach you how to double your traffic, but you’ll have to wait till Thursday.

I’m going to be introducing something new in which you can get more search traffic in 30 days.

All you have to do is take one simple action each day. And the action is so simple that it shouldn’t take you more than 30 minutes.

Stay tuned!

PS: Don’t forget to add the Master Class to your calendar. That way you’ll get notified on Thursday when it comes out.

The post SEO Doesn’t Have to be a Long-Term Game: There Are Quicker Ways to Get Results appeared first on Neil Patel.

Leave Debt – Ways To Solve Debt Problems

Leave Debt – Ways To Solve Debt Problems

If sinking in financial obligation, thankfully, there are very easy services to ending up being financial obligation totally free in a couple of years. Millions of individuals are living with thousands of bucks of credit rating card financial debt.

Develop a Realistic Debt Elimination Plan

If you have as well much financial debt, even more than most likely it collected over years. There are methods to remove financial debt over night such as financial debt negotiation, personal bankruptcy, and so on.

If you have $3000 well worth of credit scores card financial debt, identify just how much added you can pay for to pay on the cards each month. With a little sacrifice, it might be feasible to decrease and also eventually get rid of the financial debt.

Financial Debt Consolidation Loan

An additional method for getting rid of financial obligation includes using for a financial debt loan consolidation financing. Financial obligation combinations do not eliminate the financial debt, they will certainly remove credit history card financial debt.

Although a financial debt combination financing just moves financial obligation, as soon as your bank card are paid completely, you will likely discover a boost in your credit history. In choosing for a financial obligation loan consolidation, prevent making the exact same blunder two times. Building up brand-new financial obligation beats the objective of a loan consolidation.

Various other financial obligation loan consolidation alternatives entail getting a residence equity car loan, refinancing, bank card equilibrium transfer, or utilizing a financial debt loan consolidation company. You will certainly not get a swelling amount of cash if utilizing a financial debt administration firm. Instead, the company will certainly handle your financial obligations and also persuade financial institutions to decrease the rate of interest.

If sinking in financial debt, luckily, there are very easy services to coming to be financial obligation totally free in a couple of years. An additional method for getting rid of financial obligation includes using for a financial obligation combination finance. Financial debt loan consolidations do not remove the financial obligation, they will certainly remove credit score card financial debt. Also though a financial obligation loan consolidation lending just relocates about financial debt, as soon as your credit history cards are paid in complete, you will likely discover a rise in your debt rating. Various other financial debt combination choices entail acquiring a house equity financing, refinancing, credit score card equilibrium transfer, or making use of a financial obligation loan consolidation firm.

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