The art of managing money is one of the most important life skills that remains largely untaught in traditional educational institutions. However, finances affect practically all the other areas of life from where you live, the quality of healthcare available to you, and how soon you retire among other things.
Life happens – we lose our jobs, fall sick, make poor financial decisions or something unexpected happens that gives a hard knock to our credit rating. Perhaps during your days of ignorance, you’d run up a poor credit that’s hurting you now and negatively impacting on your ability to secure a loan for starting your business.
Banks are generally happy to land money to their customers but when having bad credit, your bank won’t be enthused to approve your loan application. Since you still need to borrow money, there are loan companies that would be accepting your loan application quickly online. Check this list to view the alternative lenders that would help you finance your business.
Furthermore, here are some of the steps you can take advantage of, to start building your business:
Get on top of your due bills
This is a critical component of the strategy of building up a creditworthy rating. The reason for it is pretty simple since missed payments with their negative effect stay on your credit report for seven years – which massively cuts your chances for getting a loan or credit card. Hence, you should start countering their impact right away; and the only sensible and sustainable way of doing that is by running up recent positive marks by paying off due bills on time.
Needless to say, implementing this strategy only, wouldn’t get your credit rating up fast enough but when combined with the other methods I’d be sharing here, your rating will go up in no time.
Scrutinize your credit report for any errors
Do you know that about 5 percent of consumers have erroneous credit entries that are bad enough to affect their ability to obtain an insurance or financial product; and about 1 in 4 reports contain errors that could significantly impact the credit scores? Do you also know that removing an unflattering entry from your credit report can boost your rating to jump up by a few points?
Thus, checking your report is a crucial step in building up an excellent credit score. Thankfully, you’re entitled to a free yearly report from the three major credit bureaus. Request for your report from these bureaus, and compare them for mistakes, then dispute those errors to get them removed. This is a quick way of enhancing your score, you should be able to see some improvement in your rating within 30 days after the errors have been stroke out of your report.
Use a debt management service
Hiring a personal finance counsellor at this point will help you develop a plan on how you’re going pay back your debts while also boosting your rating. Though personal finance counsellors require a service fee, their expertise comes in handy when negotiating with creditors for reduced interest rates on your debt. The advantage of doing this, is that you have a roadmap on how to get out of debt while paying lower interest.
Declare bankruptcy
Honestly, this should be your last resort. Declaring a bankruptcy carries a stigma but, in all honesty, it could also provide you with a chance to start on a new slate and rebuild your credit score. However, keep in mind that the bankruptcy mark stays on your report for up to 10 years, but once this time elapses, it shouldn’t count against you again.
So, there you have it, following these strategies listed above will enable you to build up a creditworthy score within the shortest possible time.