Bad credit rating on your personal record will stink as much like bad breath to small business lenders as many business startups will rely on personal guarantees for startup funding.
Business Loan Credit Score 600 of this scale may mean a great deal to you, but your attitude and your money habits are what will cause so much worry and concern for most potential business loan providers.
To get your small-scale business off to a good start, you should get a copy of your credit report so that you can straighten your credit score before attempting to apply for business loans or funding that require a credit score check. Though personal credit score reports cost money, It is possible to find your credit report for free.
Once you get that credit report, let’s see if we can find a way to fix your credit. There is always things we can do now to prepare for a business loan that will be needed six to twelve months from today, and that works well better if you know what your debts are.
Chances are that some forgotten debts may still appear on your credit record, and if that is the case, then the first thing you need to do is contact your creditors and find out if they will work with you, or allow you to pay at a later date or a smaller amount. Pay the debts with interest penalties right away to save money. You can focus on bills that need to be paid immediately if you are able to pay other accounts off a little at a time.
When going through your credit report, make a list of any negative information that is listed. If you have errors there, contact the reporter and the credit bureau to have it corrected. Prepare a written explanation for any accurately reported negative items. You can then request that these explanations appear on your credit report, so any future companies that review your report can take them into account when determining your credibility.
There are certain rules and regulations that a collection company needs to follow. Learning what they are can help you ensure they are following the rules. An important one to keep in mind is that they are not allowed to yell or threaten you with prison. You are not supposed to experience any type of verbal abuse. Each state can vary, so research your local laws. When you know what your rights are, you will not let the creditors have such a hold on you.
Make sure that your credit card balance is at 30 percent or under. By keeping your balance low, your payments will be low too. Going over 30 percent can hurt you financially.
Try to negotiate a payment plan for any bills that have entered the collection. You should plan ahead and do this before collectors enter the game. You would only make the problem worse if you try to avoid talking to them. They may even be able to talk you through the process.
Tell them what is going on, and be honest about how hard things are for you. It is possible that they will allow you to pay a lesser amount and/or help you set up a workable payment plan. Creditors aren’t just out to get you. They’ll often work with you if you work with them.
These techniques can help you get back on the road to good credit while growing your business slowly. Start today and begin rebuilding your credit so it does not hamper your business needs for business operations funding.
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