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Smart Credit Decisions for Entrepreneurs – Business Credit

Smart Credit Decisions for Entrepreneurs – Business Credit

Smart Credit Decisions for Entrepreneurs

(Dallas, TX-National-Credit-Solutions) Without inventive young entrepreneurs, we would have no iPhone, no Facebook, no Starbucks, and no Disneyland. Thankfully, bright young thinkers still continue to take risks and dream big, but many of the most creative entrepreneurs still have trouble funding their startups. Here is a look at how entrepreneurs can make smarter credit decisions that will help them transform their ideas into reality:

 

1) Open a business credit card

Many entrepreneurs do not have a long credit history, which can be problematic when applying for small business loans. However, it is crucial to start building good credit as soon as possible to further your business. Once you have enough personal credit history to open a business credit card, create a separate account for your business so that you can start funding it with credit.

2) Don’t mix business with your personal life

While there are a few success stories where entrepreneurs have used their personal credit cards to build their business, this often causes more problems than not. Separating your personal finances from your business finances can save you a great deal of stress and endless headaches.

3) Create a cash reserve

It is a good idea to build a cash reserve in case of emergencies. Entrepreneurs often hit snags in their plans, and many have to fail a couple of times before they succeed. Don’t let this deter you from pursuing your ideas, though, just consider setting aside a certain amount of cash each month in case you run into a rough spot. This cash can help bail you out of debt that could (if left unpaid) wreck your credit score.

4) Be aware of your debt-to-income ratio

While ambition is one of the most admirable qualities of entrepreneurs, it can also lead them into tumultuous financial situations. Instead of being overly ambitious and optimistic about your new business, play it a little safer so as not to max out your credit cards and become burdened with debt. Keep your debt-to-income ratio low to avoid sinking your business.

Entrepreneurs need to maintain a good financial record for various reasons: to appeal to potential partners, to obtain a loan for business expenses, to start another business, and to attract investors. It’s no secret that entrepreneurship requires risk, but it also requires attentive financial maintenance and smart credit decisions.

5) Know what’s on your Dunn & Bradstreet report

Do you know how potential creditors view your business credit?  If not, it may be time to check your D&B report.  Dun & Bradstreet has a huge database of more than 140 million business records.  Similar to the Credit Report Agencies, Experian, Equifax and TransUnion, D&B is a data furnisher that is used by potential investors, lenders and business owners to determine the credit-worthiness of a business.  If you are the owner or authorized business agent of a business, you can obtain a Dun & Bradstreet Report and Score online for free.
How to avoid credit card fraud

How to avoid credit card fraud

How to avoid credit card fraud

It may seem odd that a small piece of plastic is more desired by thieves than a stack of cash, but your credit card offers them the possibility to spend significantly more money than if they just swipe a few twenty dollar bills out of your pocket.credit-card-fraud-reports-hastle Unfortunately, credit cards are very susceptible to theft and fraudulent purchases, mainly because they are small, easy to lose, and you regularly enter your credit card information online. So what measures can you take to avoid credit card fraud?

Protect your credit cards – This may seem like an obvious tip, but many people are too cavalier with their credit cards, treating them like disposable pieces of plastic rather than actual money. Keep your cards inside your wallet or zipped up inside your purse at all times to protect them from sticky fingers, and never leave your credit card out in public, as thieves can easily take a picture of your card and use its information to make purchases under your name.

Invest in a shredder – Never throw away your bank statements before shredding them, as these documents contain your personal banking information that thieves can use to steal your money. To avoid someone rifling through your trash and finding your bank account number and other confidential information, shred each piece of paper before tossing it in the trash. This also applies to old credit cards: cut them up before discarding them so that your credit card number is illegible and won’t be of use to potential thieves.

Guard your credit card information – Scammers are rampant online, and guarding your credit card information while browsing the web is crucial. Be wary of online scams that ask you to enter your credit card information, such as shady online vendors or businesses that pretend to have your personal information. If you are ever suspicious of online communication with someone claiming to be from your bank or credit card company, call your company immediately to see if this is, in fact, a scam.

Keep track of your purchases – Some thieves choose to play a more coy game, where they steal small amounts of money each month in hopes that the card’s owner will overlook these small purchases (and most of them do). If you do not pay close attention to your monthly statements, you may fall victim to credit card fraud without ever knowing it. Even if a scammer only takes $20 a month out of your account, this still amounts to $240 a year that is being stolen from you. So keep track of your purchases by saving receipts or keeping a journal documenting your spending so that you can compare your purchases with your credit card statement at the end of the month.

Report lost or stolen cards immediately – As soon as you notice your credit card is missing, contact your bank or credit card issuer immediately and have them cancel the card. If you report a loss or theft immediately, you will decrease your chances of being charged for any fraudulent purchases. Similarly, if you begin to notice fraudulent activity on your bank statements, contact your bank immediately and notify them. The sooner you become aware of credit card theft, the less damage you will be responsible for.

If you do happen to be the victim of credit card theft, your first thought may be that it will damage your credit score. Fortunately, fraud alerts do not hurt your credit score, but it will make creditors more cautious when approving a credit application in your name. In order to make sure that a thief is not applying for credit under your name, they will go through a double-check process, which can slow down the process of getting a loan.

So if you are the victim of credit card fraud, report it immediately, as this will likely save you money and stress, and will not harm your credit score.

 

Books We Recommend You Read

Books We Recommend You Read

We really strive to help and educate our National Credit Solutions customers and friends. Here are some books that we have written and/or recommend:

From the Nation Credit Solution family of business and self help writers:

This is the first book by the NCS president, Brad Boruk. Brad collaborated with Ray Clark to write this book in 2013. Brad and Ray share their insight on how to manage personal finances and how to recover when you are in a bad financial spot. Let’s face it, most of us end up in a bad financial spot at least once in our lives. This book will help you organize your finances and get back on track.

This book is only available from Amazon in a Kindle edition. The great news is that you do not need a Kindle to read the book. You can read if from most computers and iPads. Click on the picture of the book to go to the Amazon page for the book:

a-guide-to-your-financial-health

From other self-help and business writers we recommend:

The 21 Irrefutable Laws of Leadership by John C. Maxwell is an indispensable book on leadership. Click on the picture below to see the Amazon page for John’s book:

Laws-of-Leadership-21

The Five Dysfunctions of a Team: A Leadership Fable by Patrick M. Lencioni is a leadership book that is recommended by Brad and Boiler. Both credit this book with inspiring their leadership. Click on the book below to go to the amazon page for this book:

National-Credit-Solutions

At National Credit Solutions we are avid researchers and readers. If you would like to recommend a book not on this list, drop us a line: info@ncs700.com

These Three Little Numbers are Huge



Your Credit is Valuable

Your credit is valuable, and quite possibly more valuable than you realize. Your three digit score isn’t important exclusively to potential creditors; it can also affect the rates you pay for insurance, where you live and and where you work.

More and more employers are looking at prospective employees’ credit files, and your credit score can be used to determine whether or not you’ll be hired or promoted in today’s job market.  The U.S. Military, certain government agencies and numerous companies require an employee to have good credit in order for that employee to be considered for positions that require a security clearance.

It’s common knowledge that apartment managers have been looking at the credit of potential renters for years.  Today, more and more landlords are also getting into the act and deciding which potential renter gets to rent their property by looking at their credit file.

Is it fair to be lumped into a group because of your credit score?   If the items on your credit report are accurate, a case can be made that these practices are fair.  Insurance companies claim that consumers with better credit scores tend to have fewer claims and, as a result, the cost to manage their accounts is much less than consumers with bad credit scores.  Most employers will tell you that employees with better credit tend to have fewer sick days and are generally considered more reliable and trustworthy, thereby lowering the cost of employment.  Apartment managers and landlords can give us statistics that show renters with good credit take better care of the property and tend to pay their rent on time.  So, while this practice may seem unfair, who can blame someone for wanting to do business with a person that has good credit?

We at National Credit Solutions understand that bad things happen to good people.  Have you ever noticed how some people blame others for everything that goes wrong with them?  Individuals that have good credit tend to accept responsibility for their actions and, when they’ve made mistakes, resolve to make better decisions in the future.  If you’ve had bad things happen in your past and your credit scores have suffered as a result, if you’re ready to accept responsibility and do something about it, please feel free to contact me personally.  I’d like to speak with you, find out what your goals and dreams are, and see what we can do to help you.

Brad Boruk
FCRA Certified Credit Strategist
National Credit Solutions
214 504-7101

 

 

 

The credit card companies find new ways to make lemonade, part 2

Part 2 of 2

Banks are evil

How to protect yourself.

  • Keep in mind the interest rate increases won’t affect you if you’re not carrying large balances.  Going from 9.99% to 14.99% isn’t going to really impact your wallet if you’re already living within your means rather than living on credit.
    • Be aware of the fine print on your credit cards.  If you know that the new card with the 0% introductory rate for the first 12 months is going to instantly jump to 24.99% if you’re even a day late during that time frame, you’ll probably be a little more careful about making sure the payment is sent on time.
    • Pick cards with lower long term rates rather than teaser rates that expire and then go up.  The longer you have a card the better it is for your credit score, so you want cards that will still be useful to you 2 or 3 years down the road.
    • Read the mail you get from your credit card issuers.  I too have been guilty in the past of just finding the payment due and ignoring the rest of the information stuffed in the envelope, and I’ve been burned by it.  The banks are notorious for slipping in information about rate changes or changes in your terms of service.  Stay informed, that way you’ll be able to change your spending habits before the card goes to 99.99% next month.
    • Cash advances…  just don’t do it.  The interest charged on cash advances is always significantly higher than the rate charged on regular purchases, and to add insult to injury, when you pay your bill each month the credit card companies are going to apply your payment to your normal purchases, not the higher interest cash advance balance, first.
    • This one may be obvious, but PAY ON TIME.  Don’t count on the postal service to get the payment to the bank in a timely manner, send the payment early to be safe.  Remember that until the new laws are being enforced you’re still subject to universal default, so that one late payment could cause the interest rates to go up on all your cards.
    • Along with the obvious pay on time, there’s also stay under your credit limit.  Over limit fees and the increased interest rates are only getting worse and worse, so do your best to avoid them completely.
    • Pay in full to avoid interest.  Credit cards should be used as a convenience, not a replacement for income, so if you’re spending within your means this should be easy to do.  If you’re not living within your means, it’s time to draw up a reasonable budget and figure out what it’s going to take to get your finances in check.
    • If you find yourself using your cards more than you should just to make ends meet, don’t be afraid to ask for help.  Feel free to give our experts a call at 1-888-WHY-FICO.  We can give you the unbiased advice based on our experience that will help you get on track.

Talk to your kids about credit

The governor of Illinois signed a law today that limits the marketing that credit card companies can do on college campuses.  Personally, I applaud this decision because I have experienced the detrimental affects of poor credit choices while young personally.  It was actually a pretty nice piece of legislation in that it doesn’t prevent credit card companies from marketing on college campuses, but it does mandate that if a college allows a credit card company to market on campus (something that the colleges make a ton of money on, never forget higher education is a business) they must also provide personal finance education as well, something sorely lacking in our society.  Kids going off to college walk through the commons, just like I once did, and see a shiny booth set up giving away t-shirts and Frisbee’s and coffee mugs, which lures them in, and then they get pitched on opening up a credit card with a $1000 credit limit.  If those kids are anything like I was at that age, bills were very much and out of sight, out of mind type of thing, so they’re stunned when they start to receive bills and realize they’ve spent hundreds of dollars that they wouldn’t have if they’d just been spending the cash in their pockets.  Credit is a necessary part of life in America, but it is also dangerous when wielded irresponsibly.  The repercussions of poor credit choices in college can reverberate throughout a lifetime.

Consider this, you go to college, get a great education, but also ruin your credit with irresponsible credit choices, choices you probably made naively because you had never been educated on how credit works.  You finish your degree and get offered your dream job, only to have that offer withdrawn at the last moment because the company hiring you pulled a credit report, saw your credit history, and decided that you were too irresponsible to handle their business.  That certainly isn’t the way you want to start your professional career.  That’s an extreme example of course, but also consider one more common—you do get that great job, and the salary that goes with it, but you are still driving around dad’s ’71 Nova.  You go to the car dealership and pick out the new Accord that goes with your salary and the image you need to put forth in the business world, only to be denied financing.

So what am I getting to with all of this?  Talk to your kids, educate them about credit. You talk to them about the birds and the bees, talk to them about interest rates and credit scores too.