It isn’t uncommon at all for people with good business acumen to have terrible personal credit. This happens for many reasons. One of the most common is for entrepreneurs to get so caught up in their business that they neglect their personal spending, debt, and credit.
Running a business can be compared to constant low-level panic. If this sounds like you’re daily life, chances are you don’t even like to think about your personal credit very much. The worry about the chaos that has been wrought in your personal finances over the past months and years can take its toll on your state of mind. But if you don’t fix it, your credit score can damage your finances so much that you’ll really have reason to feel badly about your state.
Here are some ways to discover Lexington Law’s answer to your predicament, as well as personal habits to change your situation for the better, for life.
Why should Lexington Law be mentioned here?
Lexington Law is a brand name we use for this post because of their long history in the field. The company has been helping consumers fix their credit for more than 25 years, using methods that have become standard in the conversation surrounding credit repair. These methods stem from a reverse-engineering of credit reporting agencies’ methods of establishing your credit score.
While there is no precise way to know how CRA’s determine your credit score (these are private companies after all, and all three give different scores to each consumer), there are certain things that have been observed about the way specific consumer decisions affect credit scores.
There are too many to enumerate here, but we’ll talk about a few of the most important. One of the biggest ways that these companies determine an individual credit score is by the extent to which bills are paid on time. If you have outstanding credit card bills or payments for utilities or loans, these unpaid items will be reflected on your credit score.
Neglecting personal finances: Don’t
It’s very common for entrepreneurs to feel their personal finances slipping out of control. Eventually, this state of being will lower a personal credit score, regardless of the success or failure of the company you own.
Other personal finance behaviors which can affect your personal credit are the amount of debt you have outstanding, compared to your credit limit. For example, if you have a $10,000 credit limit on a single card, and carry $5,000 of debt on that card, you will likely be weighing down your credit score. It has been found through a lot of trial and error that the CRA’s lower score of people who are using more than 30% of the available credit on any given credit card of account.
There are so many other insights that Lexington Law and other credit repair agencies have learned over the years. It can be challenging for a single individual to make the changes required to change personal credit history beneficially, especially with all the stresses and commitments of running a business.
Professional help may be required in order to have a personal credit history which will be worthy of the excellent company you run in your business life.