Do you know your credit score? It’s the three-digit number that tells lenders whether or not you’re a good candidate for credit. Your number can range from 300 to 800. If you’ve made payments on time and haven’t maxed out your credit cards, your credit score will be near the higher end. If, on the other hand, you’ve got delinquent or defaulted accounts or a large amount of debt, your score will be lower. 700 is the minimum credit score required to qualify for low-interest mortgages and other hard-to-get services.

If you’ve been declined for credit, you’re entitled to a free copy of your credit report. You can also request one free copy per year. But you won’t find your credit score listed there. This might have you wondering, “How can I find out my credit rating?”

A simple Internet search for “credit score” or “credit rating” will turn up thousands of web sites where you can go to obtain your credit score. These sites charge varying amounts for this service, so be sure to shop around before selecting one. Some will require you to participate in a trial period for a credit monitoring service. If you don’t want to subscribe, look for another site that will give you your credit score with no strings attached.

The three major credit bureaus, Experian, Equifax and TransUnion, will provide your credit score for a small fee. The usual charge is $7-8.00. Contact these bureaus by mail or through their web sites: experian.com, equifax.com, and transunion.com, respectively. When you order online, you will receive your credit rating in minutes. It could take weeks or months to receive your credit score through the mail.

Credit bureaus and 90% of banks use your FICO score to determine your credit rating. FICO stands for Fair Isaac Corporation. You can go directly to myfico.com and order copies of your credit rating from all the major credit bureaus. This bundle costs $47.85.

Your credit score is your financial history neatly summed up in three digits. It allows lenders to tell at a glance whether you’re a risky borrower or a safe bet. Instead of wondering whether you’ll qualify for your next home or car loan, take action. Go online and get a copy of your credit rating. Then you’ll know for sure how lenders will view your application. If your score turns out to be lower than you’d hoped, take heart; once you know the number you’re working with, you can take steps to raise it.

Back in the day, “humans” were the ones who decided someone’s credit worthiness. All you needed was a handshake. But times have changed, and now a single number (your FICO credit score) decides whether you’ll get a loan or not.

75% of all financial institutions use the FICO credit scoring system. It was created by the Fair Isaac Company. You can go to Myfico.com, and get your credit reports and scores from all 3 major credit bureaus. They are Experian, TransUnion, and Equifax.

Your FICO score will determine how much credit your approved for and at what interest rate. So monitoring your credit score can help

you save on interest when applying for loans.

Improving your credit score, or maintaining it doesn’t have to be difficult. It will just take some time to implement some of the steps.

Here are three strategies to maintain or boost your credit score.

Strategy One: Establish a Credit History

There could be various reasons you don’t have a credit history. Maybe you’re fresh out of high school. Maybe you only use cash, and never needed a loan. Most likely, if you have no credit history, your FICO score will be low.

The easiest way to obtain a credit history, is through an installment loan. Paying an installment loan on time can improve your score faster than paying off a credit card.

If you have $1000 to work with, here’s a great way to establish a credit history. First, take $1000 to a bank, and open a 6 month CD account. Then, apply for an installment loan for $1000, using the CD as collateral. Now, here’s what you do. Take the $1000 loan, and open another 6 month CD at another bank. Get another loan for $1000 from the second bank. Do all the steps again at one more bank.

You will now have 3 loans to pay off. Pay the minimum amount for 6 months. In the final month, cash out your CD’s and pay the loans off in full. You will have established a credit history in just 6 months.

Strategy Two: Maintain Your Good Credit History

You have a steady job. You don’t have high credit card debt, and you pay your bills on time. Here are some tips to keep your credit score from going down.

First off, don’t close your old accounts. Closing old accounts will remove how much total credit you have available, and can lower your credit score.

Second, if you pay your credit cards in full, you may have to watch when you pay on them monthly. For example: You have a $5000 limit credit card. Every month, you charge about $1200 to that card, and you pay it off in full. But here’s what can happen to you. Your credit card company reports your credit info monthly to the credit bureaus. If they report it before you pay off your card, it can look like you carry a balance on your credit card every month. You may find that your FICO score will improve if you pay on your credit cards at a different time of the month.

Strategy Three: Repair Your Poor Credit History

If you have poor credit, there are some things you can do to boost your credit score. It will take some time to accomplish this.

The first step to repairing your credit is to pay all of your bills on time. You’ll want to establish a good payment history. Your mortgage is the most important to pay on time. Installment loans are next, and then credit cards.

After that, you need to reduce the percentage of credit that you are currently using. Paying down the revolving credit debt that you have will improve your credit score.

One last thing is to look for errors in your credit report. Get a copy of your credit report from all three major credit bureaus from Myfico.com. Look them over for any errors, and contact your creditors to remove any negative items.

Your credit score is vital to your financial health, and implementing these strategies may help boost your credit score. Please consult with a financial advisor about all concerns of your finances.

Business versus Personal Credit:

Personal – Personal credit building starts when an individual provides their social security number and applies for their first credit card. At that point a credit profile is started with the personal credit reporting agencies in the region of the country in which they reside. This profile, also commonly known as a “credit report”, is built with every credit inquiry, credit application submitted, change of address and job change. The information contained in the report is usually reported to the credit bureaus by those businesses issuing credit. Eventually, the credit report is viewed as a statement or report of an individual’s ability to pay back a debt, and is the key tool to access and grant credit.

Business – When a business issues another business credit, it is referred to as trade credit (credit from vendors or suppliers). Trade, or business, credit is the single largest source of lending in the world, but it typically not reported to the business credit agencies by most small businesses. The data regarding trade credit transactions must be submitted and then is accumulated by the business credit bureaus to create a business credit report using the business name, address and federal tax identification number (FIN). The credit bureaus use this data to generate a historical report about a company’s business credit transactions and payment history. Typically, the businesses issuing credit rely on the business credit report to determine the credit they are willing to grant and the amount of the credit limit. Additionally, many businesses (suppliers/vendors) will submit credit reference applications to the key suppliers of the business as a method to obtain payment patterns as part of the credit granting process.

The major credit bureaus are:

Dun & Bradstreet Business Credit USA Corporate Experian Small Business Equifax TransUnion (Personal)

The information provided to the business credit bureaus (primarily D&B) is sent in voluntarily, as businesses are not required to report. Therefore, credit bureaus may never receive any information about the business transactions on credit and a business could go for years accumulating business history without being reported to the credit bureaus and establishing a positive business history of sound credit practices.

Establishing Business Credit History:

Business credit scores range on a scale from 0 to 100 with 75 or more considered an excellent rating. Personal credit scores, on the other hand, range from 300 to 850 with a score of 680 or higher considered excellent. With today’s tighter credit scrutiny the higher the credit score, the more likely an individual or business is to obtain credit and at more favorable terms (interest rate and contract length).

While it is important to know that there are many factors http://www.myfico.com that affect a credit score; it’s based on more than just whether you pay your bills on time (still very important). The credit score will be affected by the amount of available credit you have on bank lines of credit and credit cards, the length of time you’ve had a credit profile, the number of inquiries made on your credit profile, paying the bills on time, bankruptcy, as well as other considerations.

The typical American consumer credit report receives two to three credit inquiries per year and usually has 11 credit obligations – typically broken down as 7 credit cards and 4 installment loans. Business owners are not your typical consumer, because they carry both personal and business credit. This typically doubles the number of inquiries made to their personal credit profile and the number of credit obligations they carry at any given time, all of which negatively impact the personal credit score. Additionally, because business inquiries and personal inquiries are not separated on the personal credit report, the personal credit scores are negatively impacted. As mentioned earlier, using the personal credit history to get credit for their business, businesses are not able to build their business history/score, all of which could help attain critical business credit in the future.

A critical mistake many business owners make is using their personal information to apply for business credit, leases and loans. This practice has the resultant impact of potentially lowering their personal credit score, while not building a business credit history and business credit score.

A key to establishing credit for the business and a profile and score is to find companies (UPS, FEDEX, etc.) or your key supplier and vendors that will grant credit for your business without using your personal credit information and then report the payment experiences to the business credit bureaus. By reporting the information to the proper credit bureaus, those companies will help the business establish a business credit profile and score.

The Seven Steps to Success:

1. Company Legal Structure – The business must be a legal entity unto itself in order to establish business credit. Therefore, it is recommended to form a corporation (C Corp) or LLC (discuss with your CPA the advantage/disadvantages of a C Corp versus LLC) as opposed to structuring your business as a sole proprietorship or partnership. Formation of a sole proprietorship or partnership, dictates that personal credit information could be included on the business credit report. Additionally, as a sole proprietor or partner in a partnership, you are personally liable for the debts of the business and all your personal assets are at risk in the event of litigation.

Corporations and LLC’s, on the other hand, provide the business owners liability protection, and can build a business credit profile that’s separate from the personal credit profile. Therefore, apply for credit under your business’s name and find businesses will to grant credit without a personal credit check or guarantee.

2. Register with Business Credit Agencies – The best known business credit bureau is Dun & Bradstreet. Dun & Bradstreet has a process on their web site to establish a D-U-N-S number (a specific 9 digit number related to your business) and instructions how to establish a business credit rating. It is strongly recommended that you contact D&B and follow their process to establish business credit. The following is from the D&B web site:

How do I get started with D&B? With our unsurpassed global data collection system, D&B continually gathers the data that initiates the creation of business credit profiles on new companies. Many kinds of activities can trigger a profile on a new company, such as incorporating your business, applying for a loan, getting a business telephone number, taking out a lease on office space – even just when another company seeks information from D&B about your business. Still, a new business may not have a complete business credit profile. Getting a D-U-N-S Number from D&B – the worldwide standard for business classification systems – is an essential part of helping you establish your business credit profile and will ensure that when a company looks you up in the D&B database they will find you. In some cases, a D&B D-U-N-S Number is so a requirement for doing business some entities, such as the US government.

You should make sure you have a D&B business credit profile if:

You are planning to obtain a business loan You need to purchase or lease equipment Your cash flow is tight You want to ensure you are getting a fair deal from lenders compared to your competition You want to pay net 30 days instead of COD (Cash On Delivery) You are paying interest at prime plus 1, or even higher You plan to do business with entities that require a D-U-N-S Number, e.g. the US Government

These issues and dozens other like them can be addressed by having a strong business credit profile. A good rating provides you with the financial freedom to take the steps you need to grow, and is a straightforward, unbiased method for other companies to assess your level of risk when considering taking you on as a creditor. A poor credit rating is a certain barrier to growth and success, preventing you from getting adequate funding on fair terms.

Communicating directly with D&B will help establish your business credit in less time. If you are a new company, D&B can help you build a complete business credit profile from the ground up; if you have been in operation for a while, you will want to improve and/or protect your business credit profile. Find out more about how to establish, monitor, improve, or protect your business credit.

3. Credit Market Requirements – Businesses must meet all the requirements of the credit market in order to have a higher probability of credit approval, as not being in compliance with the credit market can “send up signal flares” with both credit bureaus and potential grantors of credit.

Some of the “signal flares” include:

not having a business license, not being registered with the Secretary of State for a certificate of good standing, operating under your social security number rather than a FIN or EIN, not having a phone line (land line) that is listed in the phone directory in the exact business legal name, no web site, or not having a business email address (not AOL or gmail, but a specific URL for your company).

4. Small Business Credit Lines – Investigate and locate a minimum of five businesses (vendors/suppliers) willing to grant a small business credit without personal guarantees and will report the payment experiences to the business credit bureaus. This will assist your business to establish a credit report and build a financial credit foundation for the company. Find companies willing to grant credit that report to the credit bureaus such as marketingoncredit.com, UPS, FEDEX

5. Business Credit Cards – Obtain three business credit cards (Sam’s Club Discover Business card), that are not linked to you personally and that report the business credit to the reporting agencies. Then be sure to always pay your bills on time!

6. Financial Statements, Business Plans and Loan Packages – These documents are often required by many credit grantors as part of their loan application process. CxO To GO is a national professional services firm that has assisted many business with their financial statement preparation and business plans. Additionally, CxO To Go has packages such as PowerPlan and PowerPlan2 for business plans, PowerPuncher for executive summaries, CFOCast for financial projections and BankSell for bank proposals so lenders and bankers will take action. It is important to note that 61% of all businesses are turned down for a loan due to a poor loan package, however with BankSell the lender loan package gets results and moves the applicant to the top of the list for review and credit committee approval.

7. Debt management – Be a smart money manager and manage the debt levels to ensure they are not too burdensome and can be paid back with current cash flow. Do not incur debt that will over leverage the company and cause missed or late payments.

The 3credit is by far the best and recognized credit information. When it comes to reliability and efficiency in your credit it is important to bank on the 3credit. What is the 3credit? The 3credit is the detailed fully analyzed and monitored credit information from the three major credit bureaus. The only way to assess your financial situation is by using TransUnion, Experian and Equifax to get reports on credit. A credit report guarantees you the report of every detail that should be in the report. All information on payment, outstanding debts, lenders and names of employers is included in reports.

It is easy to know the financial situation a person is in by checking the person’s report. When you are having bad credits in terms of debts and delayed payments this is clear evidence that there is something wrong with your finances. When you borrow loans frequently the impact is reflected on the report. The delayed payments and debts give bad scores and having that on the report will put you in a bad credit situation. Getting the three reports on credit will keep you at par with your finances and what you can do to rectify situations. The three major bureaus combined ensure that you are free from identity theft by monitoring and notifying you accordingly through the reports.

There are instances when a credit consumer may be loosing out on finances and credits, whereby accounts are wrongly reported to another account. The many financial institutions like banks will always ask for the 3credits, if one does not have the credits from the major bureaus then the bank will not approve a loan.

Banks consider and recognize TransUnion, Equifax and Experian because they are the best and give detailed information. If a bank denies you a loan then this is as a result of your bad credit report. For the credit customers that rely on credit companies to get their reports it is important to check whether they compile the reports in 3credit using the credit bureaus. To have a good and trusted credit report use the 3credit for the best financial information.