It’s easy to ignore the problems that are created by a low credit rating. Thinking about your credit history isn’t something many people do every day. At some point it will become obvious that the poor credit score is stopping you from moving forward. For most, the moment of understanding comes when it is time to make a big purchase, like purchase a home or a car.
Having a bad credit score makes it very hard to obtain a loan. Even if your score is somewhat decent and you can get approved, your will likely pay much higher interest rates. It may not seem like an additional 2% in interest will result in much, until you do the math. A mere 2% higher interest rate will result in thousands of extra dollars spent.
The first thing that you need to do in order to begin raising your score is to pull copies of your credit files and scores. You can do that by visiting Credit Viper.
As an adult almost everything you do revolves around your credit. Your ability to purchase a home, a car, a big screen TV. It also affects your insurance rates, renting your apartment and even getting a job. Heck, besides marrying my wife for her sheer inner and outer beauty, the next biggest thing that attracted me to her was her credit. YES, that’s right!!! It was that important she handled her finances how I did and was one of the first questions I asked her. We laugh about it now but it caused a definite stir in the beginning. So lets talk about credit.
First there are 5 things that are factored into the algorithm used to calculate credit. They are:
* Payment history
* Amounts owed
* Length of credit history
* New credit
* Type of credit used
Credit reporting issues have caught my attention twice in the last few days. Just today an article in Business Week reports on a Capitol One practice of reporting all small business loans to consumer credit bureaus. Typically business loans would not impact the credit report of the business owner unless the business was delinquent on the loan. Now, for Capitol One borrowers at least, current and performing business loans will end up on the owner’s personal report as well.
How that might impact your personal credit score is beyond me, but it seems that you as a business owner ought to know this is happening and monitor it to understand its implications for you. Yes, I know we all are reminded to monitor our personal scores, but I suspect you, like me, do a spotty job of it (business owners tend to have a better pulse on their business credit).