Personal credit

While good personal credit is not a requirement for going into business, it will work to your advantage to have it, or to be in the process of improving it, especially if you want to limit obstructions to getting your business started. Good credit may help in allowing you to be a guarantor for business loans; it could lead to you being able to get better interest rates personally and professionally; especially when favorable rates are not available for your business because it is new. It doesn’t make sense not to try to fix or improve your personal credit because of the advantages it offers in obtaining and guaranteeing business loans.

Everyone makes mistakes in life and allowing your personal credit to become bad, is among the worst. You may find it’s impossible to get new credit, causing you to have to buy everything for cash. Car loans may be given to you at high-interest rates, and minimum wage clerks in stores look at you as though you are a deadbeat, though you may be earning far more than them. The problems associated with having bad credit are actually too numerous to mention here. 

Uncertain of what to do, many people go to credit repair agencies, attorneys, accountants and others, and pay hundreds, if not thousands of dollars to restore their credit to normal.  Well, you don’t have to fall into that trap. Following the plan below, most people can correct their personal credit within three calendar quarters. And if you follow your credit reports, you’ll be able to see improvement every month. The Saafenet Corporation thinks everyone should try to correct their personal credit. And by using this simple plan, some may experience improvements of up to 100 points on their FICO score. But the best part of it is that it is free. 

Get started by finding out what shape your credit is really in. The best way to determine if your personal credit is OK would be to order your full credit reports.  Credit reporting agencies will usually give you one free report annually. Offers for free credit scores will not work because you will not know what is driving the score.  With credit reports from the major credit reporting agencies, you may find out you have many good accounts where you have been regular with your monthly payments and just a few bad accounts where you know you have been 30 days late at least once. Even if you had 50 good accounts and three bad accounts that showed up on your credit report as negatives, you would be considered to have poor credit. 

If you find your credit is bad after receiving your credit reports from Equifax, Experian, and TransUnion, you should first take steps to ensure your credit report only shows accurate information. The information most likely to cause you to have a poor credit score, is accurate, negative information. However, if upon review of your credit report you find negative information that is inaccurate such as items over seven years old, bankruptcy information over 10 years old, reports on accounts that do not belong to you, or other negative information that should not be there, take steps to have it removed.  That information may or may not have been accurate at one point, but after the passage of the required times, it wou1d be inaccurately negative.  Though the credit-reporting agency and the company reporting negative information about you are responsible for correcting your credit report, at times they inadvertently fail to do so. In that case, you must ensure whatever is being reported about you is accurate.

Additionally, there may be negative information on your credit report that is simply inaccurate for a variety of reasons.  The starting point to begin to rebuild your credit once you have reviewed your credit reports should be to have any inaccurate information removed or at a minimum corrected.   This may be done with a letter of dispute. And, remember that is all credit repair agencies do for you is to dispute the entries on your credit report. Some credit repair agencies will rely on the fact that many of your former creditors will not reply, and the credit reporting agency may remove any negative entries on your credit report that are not contested by your former creditors.  This practice may be viewed as unethical when it is the only approach used to correct your credit report. And, if someone has told you that is the method they will use to correct your credit; you should let them know you have a credit correction strategy you plan to implement for free. If all they will be doing is writing dispute letters on your behalf, you don’t need to spend money for that. A sample dispute letter is illustrated below.

 

Complaint Department Equifax, Experian, or Transunion (separate letters)

Address, including City, State, Zip Code 

 

Gentlemen, 

 

The credit report I received from you dated (report date), included an inaccurate entry for (describe inaccurate information). I am returning a photocopy of your credit report, with the disputed information circled.  This information is inaccurate (describe the nature of any inaccuracies, such as it is over seven years old, is not your account, or other valid reason for the inaccuracies). I respectfully request you contact the creditor responsible for that entry and jointly investigate the account, making corrections if appropriate, and notifying me of the result. 

 

Sincerely (your name) 

Enclosure: photocopy of your credit report.

Poor credit can cause you to become a target of a credit repair scam,

which may cause you to spend money unnecessarily.  It can cause you to have to pay high-interest rates or prevent the possibilities of you getting credit at all.  Only time, a plan to remove any inaccurate negatives and to repay any legitimate debt you have outstanding can repair your credit rating. There is little you can do about time but wait. But, if you don’t take steps to correct your credit, even the passage of time may not completely heal it.  

 

IMPROVING YOUR FICO SCORE WHILE YOU WAIT

 

A secondary plan you should also implement is to rebuild your FICO score. A person with a bankruptcy and a good FICO score may sometimes be approved for new credit. The rebuilding of your personal credit using secured credit cards is a strategy for which you will seldom be turned down.  If you can’t get all negatives removed from your credit report, getting new credit may be difficult.  Showing a pattern of paying secured credit cards on time can improve your FICO score; in most cases. Secured credit cards are given to most people because any charges you make are secured by a deposit you will be required to make to get the card. Completely correcting your credit overall will take time. But, the preparation of the dispute letters will remove any inappropriate negatives from your credit report, and you can do that yourself for free. 

 

That’s all credit repair agencies and firms do. Using my process can save you hundreds, if not thousands of dollars on credit repair.  With the money, you save there is no reason you can’t get secured credit cards using the method shown below to raise your FICO score, even if you are starting with bad credit.  

By going online, get the name of banks and other organizations that offer secured Master Cards, Visa, or any other well-known card. If you want to apply for a prepaid card, be certain they report your payment history to the credit bureaus, because some of them do not.  Never apply for a card that you haven’t heard of because the probability is that most vendors who accept credit cards may not have heard of some obscure credit card either, and may not accept it. I recommend a plan which will allow you to get three $300 secured credit cards, starting with an investment of $390.00. You will not have access to the money during the period when your applications for secured credit cards are being processed. However, your money won’t be spent, you can get it back at any time simply by discontinuing use of the credit card issued, and canceling the deposit account used to start this process.

Rebuilding your credit should not require more than three of these cards.  However, you may use the same process to get two cards if you feel uncertain about entering a territory which may cause you concern, like getting three cards.  A single credit card will not do much for you.  Using my plan, these cards will not be available for use immediately, because you will be using each card to get a cash advance to get the next card.  Don’t worry, because you are not buying these secured credit cards, you are simply giving the financial institution assurance that if you don’t pay the monthly charges, they would control your account so they have no risk of loss. 

Other than writing the letters and completing applications for your secured credit cards, your involvement in this process will be minimal.  Thus, you will have time to complete all the steps necessary to stay on track.  Use your own money to get the $390 required to get your three credit cards. Just keep in mind the money will not be gone, and you can get a cash advance and get 90% of it back if you run into an emergency.  Follow the steps below to get these three secured credit cards, because even if you were not able to have all the negatives on your credit report removed, early payment on new credit cards, has the capacity to improve your FICO score.  Even with bad credit, if you establish a pattern of early payments, many creditors may gamble that you learned the lesson of how devastating bad credit can be and have straightened up.  

There is no way for a creditor to read your credit report, to know these improvements are the result of you getting secured credit.  Though nothing will improve your credit as well as the removal of all negatives from your credit report, this second method can give you some relief from the trauma of having bad credit. 

  • As soon as you obtain $390, go online and choose three different providers of secured credit cards. Request your application to apply for your first secured credit card. You should receive those applications by mail quickly, but many reputable companies will allow you to apply online. Your immediate goal is to use this system to rebuild your credit, worthiness in the eyes of creditors. Complete this process before using the cards to make normal purchases.  Which may be several months after you get this process started. 
  • You should receive your first secured credit card in six to eight weeks, immediately sign it and get a cash advance for $270,00, Put $30 with it to bring the total to $300, and apply for your second secured credit card. This will leave you $60 of the $90, you had remaining. More than 30 days will pass before the second card arrives, so to demonstrate your determination to display favorable payment patterns, make a $30 payment on the first credit card. Because, if. you make the minimum payment on the credit card of $15., most of it will be applied to interest and the principal balance of $270, will only be reduced very slightly. 
  • When the second card arrives, within six to eight weeks after you applied for it, repeat the process, and get another $270, cash advance. You will have 30 days or less to make your first payment on this second secured credit card, but the next payment on the first credit card will be due. Be certain to make that payment before the 30th day for any card you receive, as it will have a positive effect on your FICO score. Make the next payment on your first secured credit card from the $60, you had remaining from the $90, held in reserve; this will leave you $30. 
  • Assuming you are applying for these credit cards every four weeks, the third credit card will not arrive in time to make payments on the other two cards with open balances. But, you should have $30. remaining from the original $390, you started with. In keeping with my philosophy of making your payments before the 30th day after getting cash advances, or in the future when making credit purchases, use that remaining $30 to make the next payment on the first secured credit card. But, because you made more than the minimum payment of $15, on your first secured credit card, you will have at least $30 available credit on that card. Get a cash advance and use it to make your payment on the second card received. 
  • When the third secured credit card arrives, that you applied for in steps 3 and 4, you should get another $270 cash advance. But, this time, it would not make sense to get another credit card, because three is all you need for this plan, and that part of this process is complete. Use the $270 to make early payments on the first two secured credit cards of $30 each, or a total of $60, leaving you $210.00.  Each time you make a payment, the portion of the payment that is a reduction of the principal amount owed on the credit card, frees up that amount of credit for your personal or business use. Over the next three months, you will be able to make regular payments on all your secured credit cards with the cash advance you got from your third credit card.  This allows you three months of making early payments on your credit cards, which has the capacity to improve your FICO score, as long as you don’t ever make payments after the 30th  day.

Your FICO score is a credit score calculated, based on your payment history developed by Fair Isaac Corporation.  Using only this plan, you would not have to go into your pocket for months to use your own or the money or get another cash advance to make payments on the cards. The minimum monthly payment on all three of your secured cards will likely not exceed $45 monthly.  If you don’t make the minimum payments, you will have ruined the reason for which you started this process, and you will have added another negative entry to your credit report. To the extent possible, make payments larger than the minimum to gain use of these credit cards. If you don’t they will take forever to pay off, because most of your payment will be applied to interest. Should you run into an emergency, as early as the third month, you may have a small amount of available credit, if you stay true to this plan.  

Your personal credit repair efforts are not a business expense. But, if you disbursed the original $390 to get this process started from company funds, it should be recognized in your books as a distribution or a loan.  Even the worst personal credit can usually be repaired within three calendar quarters.