How to Start Your Own Business – Improving Your Credit with Simple Strategies

Have you ever tried to rent a car without a credit card? Long before begin to establish credit for your business you need to straighten it out for yourself. We’ve all seen the MasterCard ads that claim that borrowing to buy consumer goods is really priceless. If you can’t afford something now, what makes you think that you’ll be able to afford it plus interest later? Some estimates place the United States credit card debt at $7500 per capita, far too much. To improve your credit profile:

Instructions

Difficulty: Easy

1. Pay all your bills on time.
   It’s better for your credit to consistently pay a minimum every month than to skip a month now and then and pay the balance in full. When you your payments are delinquent, fees accrue, a negative is recorded on your credit report, and interest rates can sky rocket.
2. Pay down those credit cards.
   Ideally, you should pay them down to zero every month. The interest free three week loan every month will help your cash flow, but if you find yourself carrying a balance, take a close look at the interest rate. Most credit cards start at 16% and can go up to as much as 30% per year. At the average credit card debt of $7500 a year, you could be paying as much as $1500 a year in interest. How much would you need in an ING Savings account to earn that back? More than $33,000.00
   
   For homeowners who have owned for awhile, a good solution is to get a home equity line of credit at a much lower interest rate and pay off those cards. Be careful if you are a recent home buyer. You don’t want to risk falling behind if your home’s value falls below the money you’ve borrowed. This solution only makes sense if you have a substantial equity in your home.
3. Take advantage of teaser rates.
   But beware the day of reckoning. Consumers will frequently get balance transfer offers at rates as low as 1.9%. Inevitably, these rates will end. Note when and be sure to transfer outstanding balances at least a week before the bill comes due. Don’t get lulled into thinking you have more money because you simply have more credit. Your goal is pay off your cards. Accumulating a lower interest bill will help you to do it faster.
4. If you can’t avoid being late, call your lender.
   It’s especially true these days with mortgages. With the rising number of defaults, major lenders are becoming increasingly cooperative when it comes to loan flexibility.