Your “FICO” {Fair Isaac and CO} credit score may affect nearly every business decision, positively and negatively. Also, your ability to get the best rates on all of your insurance needs may also be affected.
- Know what your score is and how you can maximize it.
- Assure that your credit score is current and accurate within the last 60 days. >> One of the many websites that you can go to in order to get your current credit scores and credit reports. <<
- Have an identity theft product in place to help you monitor and correct any fraudulent items and activities in your credit report. Here is an excellent Identity Theft protection product
FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your score.
- Payment History - Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
- Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)Severity of delinquency (how long past due)
- Number of past due items on file. Number of accounts paid as agreed.
- Number of accounts with balances
- Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts).
- Length of Credit History - Time since accounts opened. Time since accounts opened, by specific type of account. Time since account activity
- New Credit - Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account Number of recent credit inquiries. Time since recent account opening(s), by type of account.
- Types of Credit Used - Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)
No one piece of information or factor alone will determine your score. The importance of any factor depends on the overall information in your credit report.
For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles.
What's important is the mix of information, which varies from person to person, and for any one person over time. Your FICO score only looks at information in your credit report. Your score considers both positive and negative information in your credit report.
Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score. Go to creditreport.com to order your current credit report and scores.
It is also very important to begin to establish a business credit score (sometimes referred to as your ‘Dun & Bradstreet rating’)
A good credit score is important when looking for certain types of funding, however, unlike most banks, a credit score is only one of many criteria that Capital Profit Solutions use to determine a business owner's particular funding options.
Please – Contact me for a no-obligation review of your cash flow needs.
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Do you know a business owner that has "dead" inventory? or equipment?
This type of inventory is called captive profit. We have a program in place to turn this inventory into a cash flow solution. Contact us today, for a FREE consultation.
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