I have business debt and in trying to keep the business going I have messed up my personal credit.?

Question

Well Have been a small business owner for 2 years and through stupid decisions and the economy my business and my personal credit has suffered, now business is picking up and I need financial help, I cant get it because of my credit. Any suggestions? I really could use the help. The business is viable I know, and it can work. I have learnt the tricks of the trade.

Answer 1

The first thing you need to do is FIX your fico. Do not try to consolidate that is just an accident waiting to happen. Here is how a fico works. There are 5 key areas for your fico score:

1: record of paying your bills on time 35%
2: Total balance on your credit cards 30%
and other loans compared to your
total credit limit.
3: Length of credit history. 15%
4: New accounts and recent 10%
applications for credit.
5. Mix of credit cards and loans 10%

Your track record in making your payments on time is 35% of your fico score. you do not need a load of money to to make payment. Just make the minimum required on time. If you mail your payments make sure you mail them 5 days before the due date. If you pay online make sure it is at least 2 days before your payment is due. Do not write past due checks <---- this will not work.

Protect your credit history, because 15% of your score is based on how long your history is. The longer your history the higher your data points will be. The big down fall with everyone today is they think that canceling credit cards is helping them gain credit. When in fact it is hurting their credit. Canceling a card is wipeing out some important credit history. If you have to cancel and credit cards make sure that you cancel the newest ones first and save the long history. And waiting like 2 months before canceling another one, so the bureau willnot hit youall at once.

Manage your debt to credit ratio. Lets say you have a card with a 6,00 dollar limit. If you spend 3,000 dollars you now havea 50% ratio. The lower your ratio is the higher your fico will get. If your ratio is high ask your card company to raise the limit so you bring down your credit ratio. example lets say the company raise your ration to 12,000 dollars now your ratio is at 25% which isnow a lot better. Try to keep you credit ratio at 20% or less if possible, this has 30% riding on your fico score.

The other 20% opf your crdit is divided between new crdit apps and a mix of your credit cards and loans. This is what your debt to income is. Lets face it banks would love to squeeze a quarter out of every dollar we make. Doesn't everyone? You are a business person so you know. You need to establish a small debt to income ratio. Try to have smaller and less bills. This will help when applying for any loan. STAY AWAY IF ALL POSSIBLE FROM BANKRUPTSY.

I hope this helps. This is the first you need to do to save not only your business but yourself. You can check your credit for free once a year.
if you go to http://www.annualcreditcheck.com you can review what your credit is.

Try to buy this book called the young fabulous and the broke it will help you step by step to get back on track.

Good luck pal.

Answer 2

The Gramm-Leach-Bliley Act did make our problems worse, and Phil Gramm btw was an adviser to McCain during the campaign, and McCain also signed onto this bill. Clinton also signed this bill, but honestly it wouldn't have mattered, as it had enough votes to avoid to bypass a veto. As for the Community Reinvestment Act, its effect was negligible, most of the bad mortgages came from mortgage companies where the Act didn't apply. Secondly, the CRA was actually first passed by Jimmy Carter, and there was legitimate issue about banks redlining entire neighborhoods so nobody could get loans in certain areas and revitalize communities. Anyway, the point is that this mortgage crisis would have happened with or without the CRA, the CRA is NOT WHAT CAUSED the mortgage meltdown. I don't believe Bush directly caused the housing crisis, but over a decade of deregulation by Republicans did lead up to his crisis. It was Bush's choice not to have the Justice department and SEC move against white collar criminals. It was Republicans who constantly pushed for deregulation for over a decade regardless of the cost. Sometimes they got Democrats like Bill Clinton to go along with this, but Republicans were still at the heart of these problems.

Answer 3

If you are like most small business owners, you want to build business credit for your company and get small business loans when you need them. To build business credit means less risk for you as the owner of the business. There is effort involved when you decide to build business credit. Start taking the steps to build business credit from the get-go. This way, you won’t find yourself without a strong business credit profile even if your business is thriving.

There is a lot of hype regarding the need to build business credit that says personal credit does not matter. It’s true that when you build business credit, you separate your business credit from your personal credit, but it does help to have strong personal credit as well. The more solid you are on your feet with personal credit, the more effective you will be when you build business credit. Credit protection laws vary between personal and business credit, so it’s important to understand the differences when you begin to build business credit. A good rule of thumb to follow is simply this – repair your personal credit along with the efforts you are making to build business credit.

As you begin to build business credit, set up your business structure properly with the state and get all the necessary licensing. When you build business credit you will need a business phone listed in the telephone directory under the business name. Buying products or services from companies that report your payment history to Dunn & Bradstreet and Experian will help you build business credit.

Don’t be discouraged by the best business credit score being reserved for the “big guys” when you build business credit. Maintain your focus and you will build business credit that has enough impact to catch the interest of private commercial lenders. Beware of loan fraud when you build business credit – a legitimate underwriter will not charge you a fee upfront to connect you with a business loan lender. There may be fees for other services involved when you build business credit, but not for that. Good business credit cannot be “bought.”

As always it is recommended to google "strong business credit" (just like that in quotes) to see what companies out there can help you with the situation.


Sincerely,

Ilya Bodner
Small Business Owner
Initial Underwriting Group

*Breaking Down The Barriers To Small Business Financing*

www.initialunderwriting.org
www.strongbusinesscredit.com

614.231.3519
877.752.4300 FAX

Answer 4

Do you have any family members who could and would loan you some money?