The SBA is an independent agency of the federal government and its purpose has remained the same since its creation in 1953. According to their website the purpose of the SBA is “To aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.” The primary way in which the SBA does this is not by providing grants, but by administering low interest loans, or loan guarantees, which give small business owners like you access to start-up money from private lenders all over the nation. These are loans that you might not otherwise be able to get without the guarantee from the small business administration. The SBA does not directly provide you with small business financing, they are an intermediary and they contract with private lending institutions in every State. A loan guarantee from SBA gives a bank the added security it needs to lend you money. If the borrower’s business doesn’t get off the ground as quickly as planned and the business ends up defaulting on the loan the SBA will repay all or part of the loan – usually about 40% of the loan will be guaranteed.

This type of financial assistance may not be as good as free grant money, but if it is money you can actually get your hands on reasonably quickly, on decent terms, and the repayment schedule can fit within your budget, then it’s a great deal and probably your best option as far as financial assistance from the Small Business Administration. If you need a line of credit at any point in your business start-up or expansion, be sure to check out these SBA resources. Keep in mind that even if in the past you have been unable to borrow money elsewhere, it doesn’t mean you won’t be able to get business financing now. A loan guarantee from SBA will help you secure financing when it would otherwise be unobtainable based on your credit, perceived ability to repay the loan and other factors. They also have programs and ways of streamlining the application procedures necessary to provide financial assistance to the small business community.

This article was written by Michael Marlowe, chief editor of www.GovernmentPro.com -a new site dedicated to providing non-biased information about government grants, loan guarantees, cash benefits, financial aid, unemployment, and other government and private financial assistance programs. Visit the site to read one of the newest articles Finding Grants And Free Money You Qualify For

When I say, “revolving credit,” I’m referring to any credit account you have where the monthly payment can vary. Credit cards are the most common form of revolving credit.

Of course, “revolving credit” refers to almost everything in your wallet or purse that’s plastic that you can use to buy something. This includes American Express, Discover, MasterCard, or Visa credit cards. This also includes retail store cards such as Macy’s or Target, and gasoline cards.

The exceptions are check cards and debit cards. These little dudes may be plastic and have a MasterCard or Visa logo, but they aren’t really credit cards. They’re more like plastic checks than anything else. Debit cards have nothing to do with your credit scores.

Why your credit reports can show that your credit cards are maxed out when they’re not

In my case, my credit scores were lower than they should have been because I was using my personal credit cards for my business. An easy fix…I just applied for a corporate card and began using only that card for anything business related. (You should do the same if you have a small business.)

A few small business leases were also reporting as revolving accounts on my personal credit reports. Those were simple to resolve by just paying the small amounts off.

Then, I did a quick analysis of my credit reports.

The only way to really discover if revolving credit is lowering your scores is to do a quick analysis of your revolving credit accounts. (I’ll show you how at the end of this newsletter.) That’s how I found the big culprit that was destroying my credit scores…

Beware of home equity lines of credit

When I analyzed my credit reports I got a big surprise…I discovered several of my home equity lines of credit (HELOCs) were being misinterpreted as credit card accounts.

This was fooling the FICO scoring model into thinking that I had an enormous amount of credit card debt. But of course, I didn’t.

What I learned was that HELOC accounts can look exactly like a credit card account on your credit reports.

When I was trained by Fair Isaac Corporation, I got a different story. I was told there are two situations when a HELOC won’t be mistaken as a revolving credit card:

1. When the original amount of the line of credit is more than $50,000
2. If the account has a narrative attached to it (e.g., equity line of credit or real estate)

Even though Fair Isaac claims the above is true, I didn’t find that to be the case with my HELOCs.

It’s bad enough that my HELOCs were being mistaken as credit cards…but to make matters worse…all of my HELOCs were maxed out!When a HELOC is mistaken as a credit card, and it’s maxed out, then it looks like you have a high-limit credit card and you’re using all of its available credit—which lowers your credit scores. Ouch!

My HELOCs were lowering my FICO scores, and it was making it more expensive for me to get personal and business credit. This HELOC issue was a tough nut to crack. We were able to pay off a few of the smaller HELOCs. But we couldn’t afford to pay them all off. So we decided to refinance them into home equity installment loans (HEILs).

What’s better—a HELOC or a HEIL?

There are a couple of important differences between a HELOC and a HEIL. Once you understand the differences you can strategize on what’s best for your credit and financial situation.

Here are the differences:

- A HELOC is a revolving account. This means you can have variable monthly payments determined by the balance you owe each month. A HELOC also allows you to take some or all of the available credit out as you need it…just like a credit card.

- A HEIL is an installment account (just like a car loan or mortgage). This means you’ll have the same payment every month until it’s paid in full. A HEIL lets you take out only a fixed amount in one lump sum.

- A HELOC could be mistaken as a credit card account by the FICO scoring model because they report as revolving accounts. However, a HEIL cannot be mistaken as a credit card account because a HEIL appears on your credit reports as an installment account.

Because of the effect HELOCs may have on our credit scores, my wife and I are now committed to always using HEILs to tap equity in our properties even though the interest rates are usually higher.

How to protect yourself against holes in the credit system

Here’s a strategy you can use to insure yourself against the flaws we’ve been talking about in the credit system. If you want to tap into your home’s equity, apply for the highest HELOC amount you can qualify for. Just don’t use more than 10% of the limit. The most essential part of this strategy is your discipline after you’re approved. If you can keep yourself from going out and buying things with your new line of credit, you can really protect your credit scores.

This way, even if your HELOC is misinterpreted as a credit card, your credit scores can’t be hurt…in fact, it could even help them. So, a HELOC can be a good thing if your balance is extremely low or nonexistent.

My Wake-up Call

Had I not performed a quick revolving analysis of my credit reports—I never would have known my credit scores were suffering because of a simple credit misinterpretation.

Think about all of the things that can lower your FICO scores…late payments…too much credit card debt…too many inquiries, etc.

These are legitimate and understandable reasons why your scores would go down. But to lose points for a silly loophole in how HELOCs are reported is just…irritating.

It goes to prove what I’ve been teaching for more than 10 years now…having good credit takes more than paying your bills on time. Way more.

Stephen Snyder is the founder of the After Bankruptcy Foundation a non-profit organization that helps people recover after bankruptcy. He has helped thousands of people obtain a credit card after bankruptcy with a fair interest rate.

But you’re different. You’ve worked hard to improve your credit score by making sure you’ve paid all major credit cards on time every month without fail. But consider this: could a late payment to the local video store rental club unravel all you’ve achieved?

A record number of credit card companies have built “universal default” clauses into their agreements, which allow them to raise your interest rate if you’re late making a payment — even to someone else!

Is there such a danger lurking in the fine print of your credit card contract (blithly referred to as “the agreement” by the companies)? Is there a nasty surprise waiting inside your next monthly credit card statement?

Lately, news reports of more and more people becoming aware of the so-called “universal default” clause buried in the fine print in their credit card agreements; becoming aware not because they were curious about this heavy-handed new trend, but because they have been personally affected by the clause — a clause that sometimes spikes the monthly revolving interest rate up as high as 30%!

How could this happen, you say? Well, some credit card companies — apparently on a new search to implement new fees to increase corporate profits — have introduced this onerous high-interest penalty on their customers.

Is it fair? Not in the minds of those affected — and certainly not to those who have never even missed a payment due date with that particular company!

See, the universal default clause could affect you if you so much as get a late medical bill (which is a common occurance since hospitals in our part of the country are notorious for having outdated billing systems).

The trend is definitely on the rise. A recent survey detected nearly 4 out of 10 credit card issuers report that they apply the rule to their customers, even if those customers had no late payments on their own card! (How’s that for “customer service” ?!?!)

It could affect you if your credit score slips due to a late car payment, or a late utility bill, or a number of other reasons that you probably won’t know about until it’s too late and you’re faced with loan-shark-level interest rates on your total balance. It could involve a late phone bill or a forgotten $15-a-month book subscription service — easy to forget, yet hard to swallow when the higher credit card interest kicks in.

It’s a shame that these companies take advantage of the very people who are contributing to their record profits by basically playing hardball over trivial payments, especially when these payments do not affect those companies’ stream of regular payments in any way. They can profess that such behaviours present an unacceptable credit risk for their shareholders. But they should be ashamed of doing this to ordinary, hardworking middle class people who are struggling to make ends meet.

Three solutions come to mind:

(1) Get rid of debt now. Make the decision to read over the free information on this website and do whatever it takes to eliminate the balances on these credit cards, and once they are paid off, call the company and close the account.

(2) Be careful to make all your future payments on time, and aim to make them BEFORE they are actually due.

(3) Carefully, cautiously, painstakingly, read, read and re-read all future (even current) credit card agreements you are affected by. I’ve noticed a few of my card issuer’s have included new terms and agreements in recent credit card statements that specifically tell me they DO NOT follow this practice — but then go on to alert me to other penalties I could face if payments are ever late.

The solution for me — and hopefully for you — is to develop a satisfactory, working system to track all your debts, pay your bills on time, and take steps to reduce debt through the tips found on this website and at others. We’ve tried our best to link to good quality resources to help you in your quest.

There is a great new book we’ve come across, “Solve Your Money Troubles: Get Debt Collectors Off Your Back & Regain Financial Freedom” written by Attorney Robin Leonard and published by NoloPress, that offers a comprehensive solution to getting your finances in order. It’s a great resource.

Paul Richard, executive director of the San Diego-based nonprofit Institute of Consumer Financial Education was recently quoted as saying:

“Universal default complaints are definitely on the increase — at a disturbing rate. More than one-third of major credit card issuers now say they act on these clauses regularly.”

He added that many consumers were still unaware of the dangers because they either don’t read or don’t understand the credit card agreement. I, for one, would like to add an “Amen” to this last reason, as the language of these agreements seem like you’re signing away ALL of your rights!

Scott Bilker, author of “Talk Your Way Out Of Credit Card Debt” reports a growing number of credit card companies check your credit file at regular intervals, and if you’re late paying any other bills — not just theirs — they raise the low interest rates enjoyed at the beginning of your cozy credit relationship you started with them, and, in many cases, double or triple what you are charged to carry a balance!

Credit card firms have ways to review your credit report monthly, quarterly, even yearly. It is also true that some companies never do this (yet!). Experts note that customers who have made late payments on their accounts in the past can expect to get reviewed more often than those who always pay their bills on time.

The real worry growing is that this default clause can do lasting, unexpected damage to your FICO credit score in ways most people have never imagined. Sometimes it could happen at the worst possible time, like right when you are planning on buying a new car or a new home. Problem is, at the time negative marks appear on your credit report, the scores will drop, the damage is done, and only the passing of time and intensive effort on your part will be required to start the process of improving your credit history all over again.

More questions you need to ask yourself:

Do you carry a large credit balance? Transfer to a low fixed rate card that does not include the universal default clause buried in the fine print. If you are unsure, call the issuing company and ask.

Do you know what’s happening with your accounts? Review them carefully. Read over each bill when it arrives in the mailbox, check its due date, pay the bill RIGHT THEN, or mark on your calendar when to mail it (we recommend mailing it ONE WEEK BEFORE THE DUE DATE or else making the payment online THE DAY BEFORE IT IS DUE. For added safety, you can pay about 60cents at the U.S. Post Office to have your credit card check signed for. If you have 5 or less bills you pay this way every month, that would only add up to $36 for the year, and you’d have written proof as to when those payments were received if a dispute ever arose.

Do you know how to file a dispute with the companies you do business with? We are rapidly leaving behind the days when you can call up and ask for forgiveness for a late payment, it just doesn’t work well these days. But if you take action promptly to work out something with your lender or with your credit card issuer, then perhaps you have a chance to avoid these incredibly high interst rate surcharges. Don’t avoid the problem and wait to deal with it until after your account has been sent to a collection agency. By this time, your credit score is probably doomed to deflate.

Do you have lists of your credit cards, balances, limits, interest rate and payment due dates safely tucked away where you can quickly find them? Get your financial house in order and come up with a master bill paying list to help yourself track which payments are due when. Usually, this is pretty easy, since most payments fall due on the same day of each passing month. A cheap calendar ought to work in a pinch.

Is the timing of your payments creating a hardship? If you are paid twice monthly, and your payments all come due at once in the month, perhaps you need to get in contact with your credit card companies and ask them to have your due dates changed to help you make the payments on time. I’ve found that most firms appreciate such a proactive approach and will do what they can to accommodate you.

Do you pay your bills ON THE DAY THEY ARE DUE or do you allow proper time for mail delivery? Maybe you can give yourself a comfortable cushion by paying your monthly bills when they arrive in your mailbox instead of piling them up on your counter or in a drawer in your desk and paying them when they are due. We all get busy. It’s easy to forget a due date every now and then if the information isn’t right in front of you. Better to keep the reminders in plain sight than to hide them away. Even better: write out the check the very same day you receive the bill, put in in the payment envelope with receipt, and place these in a hard-to-miss place in your home (perhaps under a magnet on your refrigerator?) No, you don’t have to mail the check until it’s due and you have the funds in your checking account (Never pay a bill until the money is in your account!!!), but getting into the habit of writing your bills out ahead of the due date will help you from falling into the late-pay trap.

Do you pay bills automatically by electronic draft or through online bill pay options? If not, consider experimenting. I used to say I’d never do this, but for the past 2-3 years, I don’t think I’ve paid for a stamp to pay credit card payments. I’ve always paid my bills online. It’s easy, and you can tie your payment schedule to e-mail reminders.

When you apply for a new credit card, do you read the fine print? Yes, those new juicy zero-interest intro offers look good at first, but you might be stepping into a financial landmine if the terms don’t offer you some protection from things like the universal default clause we’ve discussed here today. Never let your guard down and forget the fact that you are entering into a legally binding agreement… one that could cost you dearly if you’re not careful.

Steve Johnson is publisher of http://www.FindHow2.com, which offers free advice on cleaning up your credit report to help improve your FICO credit score, as well as numerous free “how-to” articles on debt management, refinancing loans, and saving money.

Unsecured business loans do not require a borrower to put collateral against the loan. An unsecured business loan is an ideal source of funds for tenants who do not have a property to put against the loan. Homeowners who do not want to put their property at risk can also apply for an unsecured business loan.

Business is filled with uncertainty; you may earn huge profits one year or big losses the other month. In such circumstances, when returns are uncertain, an unsecured business loan is the best alternative. Unsecured business loan can be used to purchase fixed assets which involve huge investment for starting up a new venture or to expand the existing business. Unsecured business loan can also be used to meet the working capital requirement of a business.

Amount that borrowers can borrow with an unsecured business loan depends on their credit history and the lender they choose to borrow from. Usually, loan providers offer an unsecured business loan within a range of $30,000 to $250,000.

Unsecured business loan does not involve the lengthy process of verifying the value of collateral as it does not engage one. Thus, it makes the money available sooner as compared to secured business loan.

Unsecured business loans are offered at a high rate of interest as the loan is not secured by any collateral. Lenders try to cover the risk of lending by charging a high interest rate.

If you are starting up a new business then you need to make a little more effort as you don’t have business financial statement which can pose to be a proof of your capability to repay the loan. You need to design a business plan to prove that there is no risk involved in lending money to you and you will be paying the monthly installment and the loan amount in full and on time. A well organized business plan makes it easier to borrow money from lenders.

Entrepreneurs who are running established business and need funds for expansion can borrow unsecured business loans. Entrepreneurs can continue using the property or the equipment against which the loan is borrowed.

Credit score is an important factor considered by loan providers while lending unsecured business loan. Higher the credit score, higher is the possibility of getting a large amount of loan quickly and that too at comparative low interest rate. A borrower can get his credit score evaluated from any of the credit rating agencies namely Experian, Equifax and TransUnion. Credit score is popularly known as a FICO score. It gives complete picture of an individual’s payment history, amounts owed by him, length of the credit history, types of credit used and new credit. A FICO score of 650 and above is considered to be a good score.

Unsecured business loan can be borrowed from banks or financial institutions. But, in case you are looking for a fast and hassle free loan, you can borrow it from online lenders. With internet, you can access number of online lenders. It is very easy to apply for an online unsecured business loan; a borrower has to fill a simple online application form with some personal details such as name, loan amount and period for which you need the loan. Loan quotes are offered free or for nominal charges by most of the lenders. Collect loan quotes from several lenders and compare them to find the most appropriate unsecured business loan.

Success of any business in term of management involves proper planning, organizing, team work and coordination among the various tasks in an organization. Adequate capital with a well defined business strategy gives birth to big business tycoons.

Michael T. Brian is the author of this article. He is Masters in Business Administration and expert in finance. He writes about various finance related topics. To find Business loan bad credit , small business loans UK, business start up loan, Unsecured Business Loans

In practice, bad credit cannot prevent you from having bad credit business loans. Bad credit business loans can be difficult to find but they are certainly not impossible to find. Writing a good business loans application is key to getting it approved. There are a few things that the lender won’t neglect while providing you with business loans for bad credit. Business plan and its feasibility are crucial for bad credit business loans. Along with that lender will look for equity, collateral and repaying ability.

Now credit history is fundamental to getting a business loan approved. Since you have bad credit, you should start with your credit score. Obtain your credit report from any of the three credit reporting agencies – Experian, Trans Union and Equifax. Many people are unable to understand what the report and credit score signify. Credit score is given after studying the data in the credit history –

• Late payments

• The amount of time credit has been established

• The amount of credit used versus the amount of credit

available

• Length of time at present residence

• Employment history

• Negative credit information such as bankruptcies, charge-offs, collections, etc.

A Bad credit business loan lender will usually use a FICO score to identify your bad credit. Fico score ranges from 340-850. The lower your score is the chances are you might be seen as a greater credit risk. Any business loan borrower with a credit score below 600 is considered as bad credit. Here the business loans application will be approved with the added compensation of higher interest rates and down payment. Higher interest rate is attached to bad credit business loans. Research would be an investment worth it while finding a bad credit business loan. Comparatively low interest rates are possible for bad credit business loan.

You should be aware of your exact credit score before you apply for bad credit business loan. In case you have improved your credit score since you last saw, you can get lower interest rates. Credit repair may be a good step before you apply for bad credit business loans. Bad credit will not vanish immediately but there will be a gradual improvement. Don’t make credit repair without thinking for it may backfire. For shutting down a credit card because the interest rates are high, can harm your credit score.

Bad credit would not be the only criteria for getting business loan. If you can prove the ability to repay in spite of bad credit your loan will be approved. Bad credit business loan application should have

• nature of your business
• the objective of using the business loan
• business name
• Your social security number
• proof of ownership
• letters of reference
• contracts, tax returns
• financial statements, credit references
• Incorporation or LLC organizational document

It is important that a lawyer reviews your bad credit business loan application. Read the fine print and check carefully for things like hidden charges, including annual fees, bank charges, closing costs, commissions and balloon payments.

$50,000-$200,000 is the range for bad credit business loan. This will depend basically on your loan repayment ability. Try to make a claim that is practical for your situation. Failure to repay will have serious repercussions on your credit which is already marred.

A business loan works in exactly the same way as a personal loan, the only difference is that it is the business doing the borrowing, not the individual. Bad credit business loans are used for a variety of reasons, including starting a new business, purchasing an existing business or refinancing an existing business. Whether it is to alleviate cash flow problems or fund future activity, a loan can provide a business with instant funding.

You are in record a financial risk – you may not be that otherwise. Bad credit business loans are meant to argue against the record in favour of the creditability of the person himself.

After having herself gone through the ordeal of loan borrowing, Natasha Anderson understands the need for good quality loan advice. Her articles endeavor to provide you the wise counsel in the most elementary way for the benefit of the readers. She hopes that this will help them to locate the loan that beseems their expectations. She works for the UK secured loan web site uk finance world.To find a Secured or unsecured loan that best suits your needs visit http://www.ukfinanceworld.co.uk

Financing is a critical part of growing a small business. Nothing is more important to the health of a small business than having the right financing in place.

Building business credit is about establishing on time, or early, payment histories and having those payment histories reported to the three business credit reporting agencies. Therefore, building your business credit takes time, careful planning, and being educated on what steps to take. The following are steps to Building Business Credit.

1. Create a Legal Business “Entity”. In order to create and build a “business credit profile” that is separate from your personal credit, you will need to structure your business as a Corporation or LLC. If you need help establishing your business entity, go to www.mycorporation.com and review your online options.

2. Apply for an EIN. Business credit is tracked using your business name, business address and employer identification number (EIN). You may apply for an EIN from the IRS online at www.irs.gov. Every corporate entity must file a SS-4 form with the IRS to obtain their EIN. Make sure you have properly established both your Federal and State business tax ID numbers under the exact business entity name.

It is important that every agency and trade credit vendor has your business listed with the SAME exact legal name and tax identification number. It is equally important that your exact legal name is consistent with the State, IRS, 411 Directory, power bill, phone bill, etc.

3. Establish a presence. Your business must have a physical office space that receives regular mail, even if it is at your home. The telephone number must be listed under the business name in the 411 directory and be answered in your business name. Also, your business should have its own email address and web site. Visit www.godaddy.com and register a business domain name.

4. Obtain Licensing. Following proper regulatory guidelines for operating in the City or Jurisdiction where you do business is critical for building good business credit. Obtain a business license, permits, registrations, etc.

5. Gather Financials. Begin to build your financial statements from the day you begin your business. A business should have a balance sheet and income statement for at least the last two years. If your business entity is brand new, but you’ve been operating as a sole proprietor or partnership, you may use those financials.

6. Get Bank References. Open a checking account under the exact legal name of the business and correct physical address with at least one bank. Ideally, a business will have a bank account that is a minimum of 2 years old. Moreover, having an average daily balance of $7,000 plus for the last three months will put the business in a good lending position.

Your banking history reflects how well you manage your cash flow. Lenders want to know the money made by your business is consistently capable of paying the debt in incurs.

7. Get Tracked. Dun & Bradstreet is the largest tracker of business credit in the United States. Once your business is setup and has been issued a Federal tax identification number, establish a profile with D&B and receive your FREE D-U-N-S Number at www.dnb.com. Most banks and lending companies will ask for your DNB number when applying for credit.

8. Begin Building. Once you have received your DNB number you are ready to apply for business credit. The idea is to establish five (5) favorable trade references. Trade references are just vendors such as; Office Depot, UPS, Stables, Fedex/Kinkos, T-Mobile, Chevron Oil, etc. To avoid getting your business profile flagged, do not apply with these vendors all at one time.

As your business begins to develop a credit profile, it will be ranked with a Paydex Score. A Paydex Score is the equivalent to your personal FICO score, but is calculated differently for a business. Business Paydex Scores range from 0 to 100. Unlike your personal FICO score, it makes a difference for every day you pay earlier than the actual due date. A Paydex Score of 80 or more will qualify your business for the best rates and terms.

In the steps above, I have guided you through building a favorable and separate business credit score. If done properly, it will take about six (6) months to have a decent score and in two (2) years your business credit should be able to stand on its own.

Blane Russell, President of Eagle River Mortgage. Established in 1997, ERM is now the largest independent brokerage in Idaho. Blane specializes in residential and commercial mortgage solutions. He is also a preferred lender with multiple resort communities across the northwest. His early experience in debt collections has provided a knowledgeable foundation for his continuous efforts in helping consumers repair their credit, gaining back the credit-worthiness they deserve.

Step 1: Pay your bills on time.
Late payments have a huge impact on your credit score. In fact, payment history is the number one factor in determining your credit score. Late payments can also severely impact your ability to fund a business or creative project. If you are behind on payments, get caught up and stay caught up. The longer you have a history of paying on time, the higher your score will be. There is a common belief that it’s okay to pay late as long as you are paying the balance in full. This is simply not the case. A late payment that paid an account in full will count against you the same as a late payment that paid only the minimum due. In addition, late payments on some types of accounts have more of an impact than those of others. For example, a late payment on a mortgage account will have a worse impact on a credit score compared to late payments on other types of accounts. Following is the prioritization of accounts in order of highest impact on credit score to least: mortgage loans, home equity loans, auto loans, installment loans, credit cards, and then other various account types.

Step 2: Keep your account balances low.
Amounts owed are the number two factor in determining your credit score. For the best results on your credit score, keep your balances below 40% of your available credit on your credit card accounts. Once your balance is above 40% of the available limit, you start losing points off your score. Often we see a client who has five credit cards, four of which have zero balances and then one that is basically maxed out. This could be a situation where all of the account balances were transferred to the account that offered the lowest interest rate. Consolidating debt onto one low interest rate card can be an excellent way to save money but, if this results in using more than 40% of the available credit on that one account, your score will drop. In a case where your number one priority is to improve your credit score, an alternative would be to distribute the balance across several of the accounts so that you do not exceed the 40% threshold on any of them. Another option is to contact the creditor and request an increase in available credit, resulting in an automatic decrease in the percentage of credit used (assuming you don’t increase your balance owed.)

Step 3: Pay down your debt.
It’s important to pay more than just the minimum payment due each month so that you can eventually pay off your debt all together. As your amounts owed are reduced, you may see a quick boost in your score. For example, paying down $750 on a $2200 credit card balance could raise your score as much as 20 points. Think of practical ways that will help you to pay down your debt. I suggest a two fold approach. First, think of areas where you can eliminate unnecessary spending, both business and personal. For instance, one area might be eating out. Eating out one less time a week could save you over $2000 a year (based on dinner for two at $40 total per dinner.) The second step is to make the debt reduction automatic. If you’ve eliminated $200 a month in spending, set up an automatic monthly payment on the account that has the highest interest rate and have that automatic payment include an additional $200 a month on top of your usual payment amount. You will find that this quickly adds up and results in noticeable improvements both in your debt situation and on your credit score.

Step 4: Keep your oldest accounts open.
Length of history is the third most important factor that goes into your credit score. The longer you can show you’ve been managing good credit, the higher your credit score will be. One mistake that many people make is to pay off an account balance and then promptly call to have the account closed. What they don’t realize is that, if this is one of their older accounts, doing so will actually cause their score to drop. Therefore, before you close an account, check the date it was opened and be sure to keep the older ones open.

Step 5: Fix errors on your report.
Errors frequently show up on credit reports and many have a negative impact on credit score. Because of this, it’s important to review your report annually and to address any such issues immediately. For advice on correcting errors, “7 Steps to Fixing Your Credit Report,” an article by Holden Lewis of Bankrate.com, is an excellent resource.

Don’t be discouraged by the fact that improving your credit score takes specific steps, work, and time. Each positive step you take will increase your credit score. People frequently see powerful changes within as little as 3 – 6 months. Ultimately, this will mean more opportunities and financial stability as you build your business and career.

Additional Resources
myFICO.com
The most comprehensive resource for credit education. Provides information, tools and products to help you become a credit genius.

AnnualCreditReport.com
An excellent resource that offers free credit reports from all three credit bureaus.

How to Go From Credit Repair to Credit Millionaire by Donna Fox. Covers credit repair and building business credit.

The Automatic Millionaire and The Automatic Millionaire Workbook by David Bach. Two resources on money basics, including credit, by one of the foremost money gurus.

The Money Book for the Young, Fabulous, and Broke by Suze Orman. Excellent resource on money, credit, planning, and investing for people in their 20’s and 30’s who are just starting out.

Michelle Webb, The Credit Coach, helps individuals getting ready to launch business or creative startups to reduce stress, save time & money, and reach their dreams faster by making them financially stronger for life while boosting their credit power today. Through extensive one-on-one credit coaching, she teaches you about credit and money, makes them easy to understand, and looks at the whole picture so you can draft a long term plan. Michelle knows the road to financial achievement and provides the resources to get you there! For more information on credit coaching services, contact michelle@yourcreditpower.com