Credit 101

A credit score is a complex mathematical model that evaluates many types of information in a credit file. A credit score is used by a lender to help determine whether a person qualifies for a particular credit card, loan or service. Most credit scores estimate the risk a company incurs by lending a person money or providing them with a service –– specifically, the likelihood that the person will make payments on time in the next two to three years. Generally, the higher the score, the less risk the person represents.

You can use Annual Credit Report.com to get a free copy of your credit report.  Review the marks on your report to make sure they are all correct and belong to you  (note: to see your credit score you must pay a small fee).  You can also visit www.creditkarma.com to get a free copy of your credit score.

Your personal credit report shows how you have repaid your financial obligations in the past. Lenders will look at your credit score and credit history to help determine the risk of lending in the future.

The Federal Trade Commission offers good advice – http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

Get a Dun & Bradstreet D-U-N-S number, which is required by the U.S. federal government and many industry trade associations.
Click here to learn how.

It enables you to obtain funding for things like expansion, capital expenditures, research and development and staffing. It’s a key factor in your business’ future growth, and allows you to preserve cash necessary for survival. It’s not just about getting access to financing; business credit has increasingly become the primary vehicle for setting terms on business loans, determining insurance premiums, even setting lease payments. Good business credit can earn you lower rates, which can in turn strengthen your cash flow.