Daniel Rosen explains why lenders and vendors check your personal credit score when you start a business. Aim for 700+, but low scores aren't permanent: dispute errors (79% of reports contain them), pay down balances, and avoid closing old accounts. You have 30 days to dispute inaccuracies under the Fair Credit Reporting Act.
Questions this video answers
April 2, 2024.
A higher credit score, "say 700 and above."
"79% of credit reports contain errors."
15 USC Section 1681A; the speaker states investigations must be completed within 30 days of receipt.
A $1 trial to see all three reports and scores (site referenced: creditheroscore.com).
Chapters
Hey, credit heroes. Growing a business is hard and your credit score shouldn't make it harder. If your credit score is bad, then it's definitely not helping. That's why today I'm going to share exactly what credit score you need to start a business, so you better stick around. My name is Daniel Rosen and welcome to Credit Repair Business Secrets. If this is your first time listening to my podcast, every week I give credit repair tips and advice on bootstrapping your business from nothing. So be sure to click subscribe now and get ready to start changing lives. Okay, let's get into this. In the 20 years since releasing my first credit repair software, I've helped thousands of businesses scale from the ground up. I've seen a lot of people repair their own credit and then go on to build a really successful business. And I've been seeing a lot of questions recently from people who want to build their own business, and the question is, what credit score do they need to get started? Although it's a very simple question, the answer is not so simple. Here's how this relates to us. The fact is, as unfair as it sounds, your personal credit score could play a big role in your ability to secure funding, partnerships and contracts. When starting to run your own business, lenders and investors often look at your personal credit score to gauge the risk of lending you money, even if it's for your business. So if you have a low credit score, you might not be able to get a loan or a line of credit. This may hurt your business's growth and hinder your ability to take advantage of opportunities as they arise. Even certain vendors and suppliers who you may be considering to partner with, they may require a particular credit score, and some potential clients may ask to see your credit before deciding to work with you in your new business. Here's the thing to remember, a low credit score could raise red flags and could hurt your chances of landing that partnership. While a great credit score can show that your business is financially reliable, making it more likely for suppliers to want to work with you. Now, some lenders may consider factors beyond your credit score, like your business idea, your market potential, and your ability to execute on your business plan. What you want to do is research different financing options and understand the requirements and terms associated with each, regardless of your credit score. Here's why this is important. A good credit score helps you achieve your financial goals and gives you the peace of mind that comes with knowing you've got your money matters under control. A lot of investors and vendors see your credit score as a sign of your character and your financial responsibility. And a good credit score can help you to build a reputation for reliability and trustworthiness, while a poor credit score can undermine your credibility and limit your chances to grow your business. Here's what you need to know. Having a higher credit score, say 700 and above. It does increase your chances of getting approved for loans and can demonstrate your credit worthiness to lenders. So what if your credit score is not good enough to build your business? What recourse do you have? Well, let's look at a few things you can do so what if your credit score is low? Does that mean that you should give up on the dream of building a business? No, absolutely not. First of all, you want to monitor and check your credit regularly. If you need access to your credit reports, you can instantly see all three reports and scores for a $1 trial. And@creditheroscore.com you want to start by confirming that all your personal information is up to date and accurate. Note any suspicious items that don't belong to you, any misspelled names or personal information that's out of date or incorrect or accidental. Duplicate accounts, which are common for people with student loans or accounts and collections, but they could also be a sign of identity that they are. Now. If you see any of these items you you want to write to the credit bureaus immediately and demand that they be removed. Review the details of any negative items on your credit report, including late payments, charge offs, collections and accounts listed as settled, paid, derogatory or paid charge off. You want to check them for errors. Second, dispute negative items 79% of credit reports contain errors, so look for inaccuracies and dispute them immediately. Let the credit bureau know that you've received a copy of your credit report and that you found the following items to be errors and make sure to list each item you're disputing and exactly why you're disputing, and include any supporting documentation you have along with your driver's license and utility bill and close the letter with this by the provisions of the Fair Credit Reporting Act, I demand that these items be investigated and removed from my report. It is my understanding that you will recheck these items with the creditor who has posted them. Please remove any information that the creditor cannot verify. I understand that under 15 USC Section 1681A, you must complete this investigation within 30 days of receipt of this letter. If the credit bureau has not removed the item from your credit report, you'll need to send a follow up letter. So once Again, list the items you're disputing and why, and know that you might need to dispute the same item several times. And that's okay. That's how it goes. But be sure to pay close attention to the responses that you receive because depending on them, you may need to follow up with different types of letters. And finally, it's always a good idea to do things to boost your credit score. And and the best way to do this is to pay down the balances that adversely affect your score. You can also ask your creditors to please raise your limit without performing a credit check. While some may decline that request, others may be willing to raise your limit, allowing you to improve your credit utilization ratio. And that will boost your credit score. By the way, never ever close old credit cards. Closing an old credit card will make your report show less available credit credit, which will damage your credit score. It also causes that account to stop aging, which can negatively affect your average account age and that will hurt your credit too. And if the account you close is one of your oldest accounts, that damage can be even worse. Here's my final point. The bottom line is that your credit score matters and and it can have a significant impact on you as an entrepreneur and on your business as a whole. So be sure to monitor and dispute your credit reports and take the necessary steps to improve your score. And I'll end by saying if you want to learn the blueprint for a successful credit repair business, check out my seven Step Credit Repair Business Plan podcast. And if you'd like to improve your credit score and learn how to earn extra income with repairing credit for others, check out our brand new Start Repairing Credit Challenge. Doors are closing soon. And by the way, it's completely free. So sign up right now@startrepairingcredit.com and keep changing lives.
