Negative items on your credit report can have a significant impact on your credit score and ability to obtain credit. Therefore is important for one to understand what they can do to alter or even eliminate those nasty negatives. Some states have their own laws governing the length of time a negative mark will be visible when a creditor or employer pulls your credit report. With that said although the nasty negatives may presently be hindering your ability to borrow at least it wont last forever. The typical timeframes are as follows.

Seven years for personal loans, credit cards, judgements, unpaid child support and collection accounts. Chapter 7 bankruptcy will remain for a period of ten years. Charged off accounts will remain for seven years plus 180 days. The timer begin the first time your account is reported late or unpaid. Collection accounts are considered still to be the original debt and are removed according to the original debts first date of delinquency.

Besides the obvious delinquent credit accounts one may be aware there may be negative information a person is unaware of either from identity fraud, inaccurate reporting or reporting of an account that isnt yours and those will need to be disputed in writing to each of the three consumer credit bureaus.

Why Should I Separate My Personal Credit from My Business Credit?

Most people who want to start up their own businesses today usually make use of personal resources to finance their ventures. They either utilize their savings, loan money from significant others or even use up their retirement funds. Due to mixing their personal accounts with that of their business’ transactions, these people often risk utilizing their major assets for collateral, give personally guaranteed business mortgages, and so on. They often end up pushing their personal credits to the limit. And whenever this happens, they are left to compromise their personal financial security. It is sad to say, however, that a significant percentage of small firms operate through personal credit cards. What these people should actually know and should be doing in running their ventures is how to separate their personal credit and their business credit and how life saving this can be, not only for the company, but for their personal assets as well. The use of credit cards in small businesses is currently on the rise. What this does is that it protects both of the entrepreneur’s personal as well as business assets and allows opportunities for better growth and organization to the company. Personal Advantages in Using Business Credit Through separating the personal account with the firm’s business account, one is able to protect private assets in case something goes wrong with the financial status of the company. In that way, one’s personal security (especially for those with families) would not have to be compromised. In instances wherein a firm that goes bankrupt does not have corporate credit, one can be held responsible for any of the company’s expenditures both legally and personally. Separating accounts would entail one to give added protection on savings and properties that one worked hard for in a long time. Corporate Advantages in Using Business Credit Owning a business credit could also improve the financial flow of one’s company as well as help the company grow. One very good advantage is being able to save a lot of money. By having a good credit profile for the company, business owners have the option of lowering interests for leases and loans. It also becomes easier for the company to add more employees, raise inventory and attain discounts for goods. Aside from this, it keeps the company’s financial transactions organized as one can more conveniently keep track of the firm’s expenditures, which also gives an easier means to monitor accounting and tax transactions. Most importantly, a company with a stable and reliable account would be able to attract more investors and would have a more organized cash flow system. For any person who wants to start a business, it is important to be smart and practical in handling finances. By using a separate credit account for that small company, one does not only protect assets, but one also increases the chance of the small business to grow and actually earn more. The use of such credit accounts will help one’s company to improve by saving much time, money and effort. This will even open opportunities for the business to gain the finances that it needs and develop the company’s credibility. In conclusion, any smart entrepreneur wanting to succeed in business ventures at the same time protect private resources will surely learn to separate his personal credit from his business credit.

Handling Your Credit Report

Not a lot of people may realize this, but one of the most vital documents that you should take note of, is your credit report. It is a document that contains detailed information about your credit history, including identifying data, credit accounts and loans, records of late payments, bankruptcies and pretty much almost everything that has to do with how you handle your finances. 

This report, depending on its content, can either help you a lot or cause serious hindrances to you, especially if you are operating your own small business or about to make certain loans. After all, your credit report will basically become one of the major defying factors of your creditworthiness.

How Vital Is Your Credit Report?

If you have not been in a situation that has commenced how important your credit report is, let us allow an example scenario to walk you through. Let us say that one of these days you may need a certain amount of money in order to push through the expansion of your business. In doing so, you may need to apply for a loan or a credit account in order to gain funding for your project. 

But before any lenders would actually give you a credit account or give you a loan, they would first check on your creditworthiness and whether they can trust you to make the right payments. With this, they would of course check your credit report to see if you have any histories of bankruptcies, unpaid debts, late payments and so on. If you do not have a very good credit record, then no lender would most likely help you out. And this could be very much of a hassle to you. 

How to get your free annual credit report

Everyone is now and has been for some time entitled to receive a free copy of their credit report form the 3 major credit reporting agencies or credit bureaus once every 12 months.  The problem most face however is the overwhelming number of deceptive services with websites claiming to provide access to your free report but there is in fact only one website that provides this service truly completely free of charge and it is annualcreditreport.com.   So with that said no need to wade through the massive number of deceptive credit report and monitoring services go directly to the only one guaranteed to be completely free.

Credit Inquiries

    Make sure you know who is looking at your credit report and why.  Many inquiries look bad on your credit report, but more than that you likely want to know who can see your personal financial information, now that you know that your personal information is stored in a credit report. If you sign a document with a lender or apply for credit online, you can be sure that someone is looking at your credit report.  However, you may want to look over other documents in order to see who is taking a peek. Insurance agents will often look at your credit report, for example. Some landlords and potential employers will, too. You need to be careful about online sources, too. In general, when you provide someone with your social insurance number, you may be giving permission to look at your credit report. You shouldn’t bar people from looking, but knowing who is looking is good financial practice.  

    Know the difference between soft and hard inquiries.  When you pull your credit report to look at it, it is counted as a “soft inquiry.” Only “hard inquiries” from lenders will affect your credit score dramatically. Although checking your credit score too often is an expensive habit, you should not avoid checking your credit report because you fear it will make your credit rating worse.

Understanding Your Credit Score

    If you are going to improve your credit score, then logic has it that you must understand what your credit score is and how it works. Without this information, you won’t be able to very effectively improve your score because you won’t understand how the things you do in daily life affect your score.  If you don’t understand how your credit score works, you will also be at the mercy of any company that tries to tell you how you can improve your score - on their terms and at their price.  In general, your credit score is a number that lets lenders know how much of a credit risk you are. The credit score is a number, usually between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are.  In general, the higher your credit score, the better credit risk you make and the more likely you are to be given credit at great rates. Scores in the low 600s and below will often give you trouble in finding credit, while scores of 720 and above will generally give you the best interest rates out there. However, credit scores are a lot like GPAs or SAT scores from college days - while they give others a quick snapshot of how you are doing, they are interpreted by people in different ways. Some lenders put more emphasis on credit scores than others.  Some lenders will work with you if you have credit scores in the 600s, while others offer their best rates only to those creditors with very high scores indeed. Some lenders will look at your entire credit report while others will accept or reject your loan application based solely on your credit score.  

    The credit score is based on your credit report, which contains a history of your past debts and repayments. Credit bureaus use computers and mathematical calculations to arrive at a credit score from the information contained in your credit report.  Each credit bureau uses different methods to do this (which is why you will have different scores with different companies) but most credit bureaus use the FICO system. FICO is an acronym for the credit score calculating software offered by Fair Isaac Corporation company. This is by far the most used software since the Fair Isaac Corporation developed the credit score model used by many in the financial industry and is still considered one of the leaders in the field.  In fact, credit scores are sometimes called FICO scores or FICO ratings, although it is important to understand that your score may be tabulated using different software.  One other thing you may want to understand about the software and mathematics that goes into your credit score is the fact that the math used by the software is based on research and comparative mathematics. This is an important and simple concept that can help you understand how to boost your credit score. In simple terms, what this means is that your credit score is in a way calculated on the same principles as your insurance premiums. 

     Your insurance company likely asks you questions about your health, your lifestyle choices (such as whether you are a smoker) because these bits of information can tell the insurance company how much of a risk you are and how likely you are to make large claims later on. This is based on research.  Studies have shown, for example, that smokers tend to be more prone to serious illnesses and so require more medical attention. If you are a smoker, you may face higher insurance premiums because of this.  Similarly, credit bureaus and lenders often look at general patterns. Since people with too many debts tend not to have great rates of repayment, your credit score may suffer if you have too many debts, for example. Understanding this can help you in two ways:  

1) It will let you see that your credit score is not a personal reflection of how “good” or “bad” you are with money. Rather, it is a reflection of how well lenders and companies think you will repay your bills - based on information gathered from studying other people.  

2) It will let you see that if you want to improve your credit score, you need to work on becoming the sort of debtor that studies have shown tends to repay their bills. You do not have to work hard to reinvent yourself financially and you do not have to start making much more money. You just need to be a reliable lender. This realization alone should help make credit repair far less stressful!
     
     Credit reports are put together by credit bureaus, which use information from client companies. It works like this: credit bureaus have clients - such as credit card companies and utility companies, to name just two - who provide them with information.  Once a file is begun on you (i.e. once you open a bank account or have bills to pay) then information about you is stored on the record. If you are late paying a bill, the clients call the credit bureaus and note this. Any unpaid bills, overdue bills or other problems with credit count as “dings” on your credit report and affect your score.  Information such as what type of debt you have, how much debt you have, how regularly you pay your bills on time, and your credit accounts are all information that is used to calculate your credit score.  Your age, sex, and income do not count towards your credit score. The actual formula used by credit bureaus to calculate credit scores is a well-kept secret, but it is known that recent account activity, debts, length of credit, unpaid accounts, and types of credit are among the things that