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Improving Your Credit Report

Your Credit Report

Having a clean credit record is important personally. A blemished credit record could interfere with getting a credit card, buying a car, getting a lease or mortgage – even getting a job.

To a business person, a good credit history is even more important. It might affect one’s ability to get the financing needed to start or run a business.

Just about anyone who is considering extending credit to a business will be looking at the owner’s credit history – landlords, utilities, suppliers, and especially lenders or investors.

For example, the Small Business Administration (SBA) says that every application it receives needs “positive credit merits” to be approved for its financial assistance programs.

That’s why it is important to check your credit reports at least annually.

Luckily, it’s not that hard to do. There are credit reporting agencies (CRAs) that maintain credit and bill-paying data on just about anyone who pays a utility bill or loan payment or has a credit card.

Free Credit Reports There are only three major CRAs to be concerned with, and you should get a report from each of them. One might have information the others do not. These are:

Generally, CRAs and other credit-reporting sources charge a per-report fee (usually $9.00), and you can purchase reports as often as you wish.

However, under the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, every American citizen is entitled to one annual report from each of the three major CRAs – without fee or obligation.

And although there are several offers of “free” credit reports, some of these offers may be tied into enrollments for various services that could involve annual or monthly fees. Sometimes, simply applying for the “free report” initiates the service and fee.

At the present time, the only authorized source for your free annual credit report under federal law is AnnualCreditReport.com

Be sure to get a report from each of the three major credit reporting agencies.

Once your business is ready to go, consider looking into the various business-related credit services offered by CRA’s and others.

If you find a problem? Credit problems, such as a forgotten, unpaid bill or a history of late payments, or even an unknown incident of credit fraud, should be addressed immediately.

The SBA offers a number of services to the small business community, among them are financial and counseling assistance through SCORE, Small Business Development Centers (SBDC’s), Women’s Business Centers (WBCs) and other sources. (See: Business Plan Assistance)

There are other sources, too, such as the Consumer Credit Counseling Service of Delaware Valley, in Philadelphia, which offers such services as consumer credit education, counseling, asset building and debt reduction programs. And as a community-based organization, it is able to connect clients to additional programs and services, too.