Dear Business Banter,
I had a client pay late (without letting me know first!) and as a result, I was late on a couple of payments. Now my business credit score has dipped. Do you have any advice on how I can pick it up again? The faster the better! – Albert
As wonderful as owning a small business is, it can also be stressful. If you don’t get paid in a timely manner, it can put you in the position of falling behind on your own credit accounts. Not only is this frustrating, but it can also have a negative impact on your business credit reports and scores.
Have a business question for Erica? Drop her a line at the Ask Bankrate Experts page.
How to repair your business credit score
Business credit reports and scores are more complicated than their consumer cousins, so take the time to understand how they work. The most common are produced by Dun & Bradstreet, Equifax and Experian.
The number of years you’ve been in business, how many credit accounts (credit cards, loans, lines of credit) you’ve applied for in the past nine months, the number of new credit accounts that you have, the amount of debt you’re carrying (especially relative to the credit lines) and any evidence of collections and liens all show up on your business credit reports and are key influential factors in scoring.
However, the way you meet your bills rises to the top of importance. “Payment history is one of the biggest factors in calculating your business credit score, so missing a few payments will tend to have a bigger negative effect,” says Brian Bond, senior vice president of product, marketing and strategy for Experian Business Information Services.
Not what you want to hear, right? Don’t worry. You can recover from the credit score and reputation damage caused by a few late payments by taking action.
Create a financial float
It sounds like you were dependent on this one client for revenue so you could manage your own accounts. That’s a dangerous place to be, so strengthen your foundation.
Arm yourself with savings that you can tap into when times get tough. Business credit builder products are also essential. Consider loan products that can come in handy in situations like these. A business line of credit will allow you to cover expenses, including other debt payments, and pay it off over time.
Unlike with a loan, you wouldn’t pay any interest on it unless you do use the funds. And be sure to have enough available credit with the right business credit cards. Ideally, you want at least a few excellent credit cards in rotation and at your disposal.
Communicate with the creditors in question
Call each delinquent creditor and explain the reason for the late payments and what you are doing to offset that possibility in the future. This isn’t about making excuses, but informing them of what happened and that you are doing what it takes to not let it happen again.
Be aware that discussing the matter won’t change the past, but this communication can set the stage for a good relationship going forward.
Check your business credit report
As with a consumer credit report, monitoring your business reports is your responsibility, so check them frequently. They should show as much attractive data as possible because that is what is used to calculate your credit scores.
Pay close attention to any items in the negative category, so you can identify any mistakes or spot signs of business fraud or identity theft. Consider using a free tool like Experian’s Business Credit Score Planner, which is designed to help business owners improve their business credit scores.
Pay on time, starting now
While you can’t purge any evidence of the late payments from your reports, you can strategize to ensure that positive and accurate information is reported that can offset the damage they’re doing to your scores.
Starting now, make sure every creditor that appears on your business credit report reflects an on-time payment. As those accumulate, your credit scores should rise.
Do business with reporting vendors
Before forming a relationship with a new company, ask if they send account information to the business credit reporting companies. Err on the side of those that do. The more vendors that furnish a positive credit history to your reports, the higher your business credit score will be. Along with credit products, they will give you a business credit boost.
Reduce high credit balances
Review the amount of debt you’re carrying as compared to the amount you can charge. Your balance should not exceed 20 to 30 percent of your credit limit. If it’s higher than that, your business credit scores will suffer, so pay them down as soon as possible.
“The fastest way to begin to improve bad credit is to pay off debts,” says Bond. “A positive impact can be seen on a business credit score by decreasing the balance on business credit.”
Another option is to increase your borrowing power with additional credit lines, so your utilization ratio is in a healthier place.
If you want to work with a third-party company to fix your credit issues, be careful. The best business credit repair companies will have low fees and a high Better Business Bureau rating. Still, with the strategy above you should be able to mend the late payment damage on your own and for free.
Even with the best planning, you may eventually find yourself in a difficult position again. If you can’t send your payment by the due date, contact your creditors before you fall behind. You may be able to work out an alternative payment arrangement that enables you to send less or even none at all for a fixed period of time, thus preventing a delinquency from appearing on your reports.
Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing | Fintech Zoom
Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing
Badger Advisors wants you to believe they are offering credit card refinancing and have begun flooding the market with debt consolidation and credit card relief offers. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2021 Reviews, the personal finance review site, has been following Badger Advisors, Rockville Advisors, Old Dominion Associates, Sooner Partners, Snowbird Partners, Gulf Street Advisors, Memphis Associates, Safe Path Advisors, Plymouth Associates, Tate Funding, Braidwood Capital, Tiffany Funding, Nickel Advisors, Coral Funding, Neon Funding, Polk Partners, Ladder Advisors (also known as Carina Advisors, Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).
Credit Card Refinancing
Credit card refinancing is a possibly feasible solution for your piling credit card debt. Under credit card refinancing, all of your credit card balances go into one account where a single interest rate is charged. If you have a good enough credit score, then you may be able to qualify for credit card refinancing at low-interest rates. Just like other refinance options, credit card refinancing also entails a loan offer to pay off your debts and improve your financial health. You will then have to focus on the credit card refinancing loan only and no other credit card balance.
Another major advantage of credit card refinancing is that the interest rate will not vary over the lifecycle of the loan. This will simplify your life a lot and make debt servicing much easier since you will know how long it will take for you to pay back your loan. With variable interest rates that you often find in credit cards, you can end up incurring higher interest expenses. But with a fixed interest rate that credit card refinancing purveys, you will not have to face this unwelcome possibility.
With the right kind of credit card refinancing loan, you can possibly save hundreds and even thousands of dollars on interest expenses this way. Of course, you will have to be punctual with your monthly repayments. If the terms and conditions of your credit card refinancing loan are favorable then you may very well embark on the road to financial freedom and get there before you know it.
Is There Any Difference Between Credit Card Refinancing and Debt Consolidation?
From the aforementioned discourse, you may have realized that credit card refinancing is very similar to debt consolidation and that indeed is the case. Both are about settling all debts with one favorable loan so that you can focus on this loan only and enjoy its lenient terms and conditions to rebuild your credit score and gradually work your way towards debt freedom.
Provided the terms and conditions of your credit card refinancing loans are suitable, this financial option represents a viable route for managing and paying off your outstanding liabilities in a better way.
Why Credit Card Refinancing loan May be Better
A credit card refinancing loan may be a better choice than a balance transfer card. The idea of a balance transfer card is to take advantage of the zero APR introductory period that usually lasts from 12 to 18 months. However, there are a few caveats due to which a balance transfer card may not exactly be a good idea.
The zero APR period may look tempting but it still may not be long enough to pay off your entire credit card debt. And that is unfortunate because once the zero APR limit expires then you will have to pay very high interest and you may even incur penalties. Then there is the question of balance transfer fees that can offset the advantages of the zero APR time frame.
Another problem is that the credit limit of the balance transfer credit card may not be big enough to accommodate all of your credit card balances. This is a real possibility since your credit card debt is high to begin with and it may not fit within the credit limit of the balance transfer card.
Then there is the danger of spending with the balance transfer credit card. The inability to control spending and use of credit cards is the very reason why people fall into credit card debt traps in the first place. This possibility is very much open and present with balance transfer cards. Instead of helping you, they may worsen your debt situation since they too are credit cards that are all too easy to misuse. What’s worse, they have exorbitant interest rates.
Such a scenario cannot transpire with a credit card refinancing loan since it is not a credit line – this loan immediately goes towards paying off your credit card balances due to which there is no peril of misuse. Instead of getting another credit card in the shape of a balance transfer card it is much safer to freeze all of your cards and repay your debts.
If you do your research on credit card refinancing then you might find that some people also include balance transfer credit cards under this heading. But due to the drawbacks mentioned above, you should try to steer clear of balance credit cards and instead take out a personal loan for the sole purpose of repaying your credit card debts.
The prime advantage of credit card refinancing is that they can provide you with a low interest rate if you have a good enough credit score.
How to Make Credit Card Refinancing a Success
While credit card refinancing provides good terms and conditions, it is not a magic elixir that will cure all of your financial woes.
To make your credit card refinancing a success, you will have to follow some good money habits and exercise discipline at the same time.
You should try to find extra sources of income. You can think about working overtime at your job if that is possible. If not, you can opt for freelancing gigs and projects. Even if you earn a few hundred dollars through this route each month, it will prove to be of great assistance in helping you become debt-free more quickly.
You should also think up ways of saving on expenses. A major reason why consumers incur enormous debts is that they do not track their spending. This is a habit that you must remedy forthwith if you wish to get out of your financial predicament quickly. No matter how little your expense, make sure you record it somewhere secure. You can utilize apps to record your transactions. Thus, you will know the areas on which your spending is inordinate. You will also be able to compare your spending with your planned budget.
You should get in touch with your financial advisor to find out whether credit card refinancing is right for you.
Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing
The Pros and Cons of Being an Authorized User on a Credit Card
Having friends has its perks, especially if that friend lets you be an authorized user on their credit card.
If you’re thinking of asking someone you trust to be added as an authorized user on one of their cards, it’s important to know what you’re getting into with this decision. Instead of getting your own credit card, you may be thinking of taking this step so that you have access to a card when you need it. There are advantages and disadvantages to being an authorized user. Keep reading to learn the pros and cons of being an authorized user on a credit card.
What is an authorized user?
An authorized user is someone who has permission to use a credit card account. While they’re legally able to use the credit card, they’re not responsible for paying off the credit card debt. Most top credit card issuers allow their cardholders to add an authorized user to their account.
Can anyone be added as an authorized user?
Most credit card issuers have age requirements in place for authorized users. Other than that, there aren’t restrictions.
The pros of being an authorized user
Being an authorized user on a credit card has its advantages:
- This can help build credit. For someone with little or no credit, being added as an authorized user can help them build a good credit score. That’s because many credit card companies report the history of the account on an authorized user’s credit report. This can be helpful in the future when you attempt to open your own credit card account.
- It gives a person access to a credit card. With poor credit history or a bad credit score, it can be challenging to get a credit card. Being added as an authorized user can give you access to a credit card, which can be especially helpful during an emergency.
- You can learn how to manage money. Being an authorized user is a great way to learn how to manage money better. You can learn how to make smart financial decisions before opening your own credit account.
The cons of being an authorized user
Here’s what you need to look out for:
- The account holder’s actions can negatively impact your credit. If the credit cardholder misses payments or racks up a lot of debt on the card, it could negatively impact your credit. Before being added as an authorized user, it’s a smart idea to consider whether the credit cardholder is financially responsible.
- They can remove you at any time. The credit cardholder can remove you as an authorized user at any time. When this happens, that account will no longer appear on your credit report. This is something to consider if you want to build your credit.
- It could cause relationship issues. If you and the cardholder disagree about which charges you’ve made or how much you owe them, this could cause added stress and could lead to relationship issues. Consider setting clear boundaries and ways to track purchases made so that you minimize disagreements or confusion.
The bottom line
Being added as an authorized user may be a good option for you. But, you need to be well aware of the positives and negatives. Talk with someone you trust about this opportunity and outline expectations and rules. Then you can both decide if it’s the right move to make.
ASK THE MONEY LADY: What you need to know about protecting your credit score | Regional-Lifestyles | Lifestyles
Most people never want to share their social insurance number for fear of a hit to their credit bureau, but unfortunately, you may find it a necessity when asked by your lender, who now needs to ensure identity due to increased consumer fraud.
If you apply for credit at a bank, open a bank account or finance a vehicle, chances are you will need to disclose your social insurance number (SIN).
Many people still believe that they should never agree to an inquiry or give out their SIN number too many times to obtain credit. They think their credit will either become damaged or their credit bureau rating and score will go down. This is sometimes not true – so to help you out, Greg, I’m going to dispel all the myths and also let you know what the banks are looking for.
There are two major credit bureau companies that all financial institutions and merchants use today. They are Equifax and TransCanada Union – agencies that rank and provide an overall score to each person who uses credit.
The system for measuring hits to your credit score is indeed intuitive, meaning it measures and evaluates the type of merchant and inquiry. So, it knows if you are shopping around. If you have several inquiries from different banks because you are rate shopping for a mortgage, you will usually not see any decline in your score, (however, these inquiries must be contained within a 30-day period).
It’s the same thing when you are shopping for a vehicle – multiple hits to your credit bureau from car dealers will not alter the score if contained within 30 days.
But, on the other hand, if you are truly shopping and going to different stores, applying for multiple credit cards, personal and retail loans, or buying items on deferred payment plans, then yes, this will drop your score regardless of the 30-day limit.
Protect your credit
First and foremost, you want to protect your credit. This is the foundation of all lending and is the only way for lenders to judge your creditworthiness for the future. If you always pay your bills on time and have never declared bankruptcy, chances are you will have good credit.
But if you are the opposite, and your credit score is too low, you may find it very difficult to get future credit. Your credit bureau score can range from 300 to 900.
As a general guideline, banks and A-Lenders are looking for clients with scores above 680 and will generally automatically decline applications with scores under 600. Credit card companies are a little more lenient and will go down as low as 530, with auto declines for scores under 500.
Here are some tips to improve your credit and maintain a good rating:
1. Pay your bills two to three days before they are due. Paying them on the due date (especially through online banking) will make you one to two days late. This is recorded on your credit bureau and will definitely lower your score without you knowing it.
2. Do not carry balances on credit cards or personal loans month over month. This means your credit is revolving and will automatically drop your score.
3. Resist the urge to have a lot of open credit cards, even if they have zero balances.
4. You must have some credit. If you had previous bad credit and now are just using cash, you are essentially handcuffing your future. Without re-establishing good credit, the banks will decline you every time.
5. Property taxes and support payments in arrears can also drop your score once they are reported.
6. Mortgage and vehicle payments in arrears once reported (which usually happens after 60 days), are a major hit to your score. Please try to avoid this.
I have heard in the past that some merchants or banks do soft hits to your credit. Please do not get fooled by this. There is no such thing as a “soft hit” or a “hard hit” to your credit bureau. If they have your verbal consent, (even if they don’t have your SIN number) when they adjudicate a consumer credit request, they will hit your credit and it will adjust your score.
Good luck and best wishes,
Written by Christine Ibbotson, author of four finance books, including the Canadian best-selling book, “How to Retire Debt-Free & Wealthy.” Go to www.askthemoneylady.ca or send a question to i[email protected]
- Bad Credit12 months ago
All you Need To Know about Bad Credit Scores in 2020
- Bad Credit10 months ago
The General Car Insurance Review 2020
- News7 months ago
Financial Complaints Soared During Pandemic, Reports Say
- Credit Repair Companies1 year ago
How to improve your credit score
- Bad Credit11 months ago
How to Get an SBA Coronavirus Disaster Loan
- Bad Credit1 year ago
Bad Credit? Best Bad Credit Mortgage Refinance Companies • Benzinga
- News1 year ago
Global Credit Repair Services Market Demand and Status, Forecast 2025 | • CreditRepair.com • MyCreditGroup • The Credit People • Veracity Credit Consultants • TransUnion • MSI Credit Solutions • Lexington Law • USA Credit Repair
- Bad Credit11 months ago
Bad Credit Payday Loans Online