Published By Janet Gershen-Siegel at July 15, 2018
Written by Janet Gershen-Siegel
You can boost your consumer credit scores, and we can show you how. Check out these simple techniques to improve your consumer credit for little to no cost.
When you boost your consumer credit scores, then that will make it easier for you to get loans and credit. And you will get better terms for both.
It can also be the difference between wanting consumer credit and loans, and not getting them at all. So here are three simple techniques to boost your consumer credit scores.
How do you make your payment history better? It’s easy. Just pay your invoices timely. And pay them as close to ‘in full’ as you possibly can. That can be easier said than done. The reality is; you must keep your spending realistic.
No one can forecast the future. All anyone can do is to go by whatever information is out there. Additionally it should be analyzed in a way that is not overly optimistic. What is likely to happen to you financially? This ought to be under all kinds of circumstances.
Hence if it appears you can potentially make $1 million next quarter, but you have to borrow money now, do not borrow anywhere near that amount. Keep your spending in check. That is, do not gamble your future on a hunch.
These are both good ways to get your credit balances down. Consequently, that will improve your payment history.
Consider that anything could happen. However, you still need to pay your small business’s invoices.
This is essentially for how long you have been using credit. Typically younger adults have short credit histories. While there is not much you can do about that and there’s no real hack for it, per se, do not lose heart.
Credit reporting agencies will review whatever information they can get on you. If you just got out of college and are about to go into a high-powered, high-salary field, then that will be part of what they consider. So these types of fields are lawyer or doctor or the like.
This means regularly getting and reviewing your consumer credit reports. You will need to stay on top of your scores. This is because credit scoring reports can have mistakes. And you have the right to dispute them. However, you will not know there are any errors unless you check.
Disputing a credit report mistake generally involves sending a paper letter with copies of any proofs of payment with it. These are typically going to be receipts and/or cancelled checks. So never send the originals. Always send copies and also retain the originals.
Specifically detail any charges that you are challenging. Be sure to use certified mail so you will have proof that you sent your dispute.
If there are no inaccuracies on your credit reports, then naturally you cannot dispute anything. And please don’t try to pull a fast one and dispute your credit score if there is really nothing wrong with it! Credit reporting agencies, understandably so, are not going to like that. You only hurt yourself buy pulling a stunt such as that.
When you consider the difference between your business credit score vs personal credit score, keep in mind that any inquiries into your personal credit score are going to adversely affect that score.
And a lot of merchants and lenders will perform inquiries when they are doing business with you for the first time. You do not want their inquiries to be affecting your personal credit.
You can’t get into Dun & Bradstreet’s system without one, and they are free, anyway. A DUNS number separates your business from all others, including similarly-named companies. Dun & Bradstreet has a prerequisite that you register your small business on their site before they will hand out a DUNS number.
Please note: there are a few slightly different methods of getting a DUNS if your business belongs to a special class. These include if your small business is a US government contractor or grantee, or your company is Canadian, or you are working as an Apple developer.
If you run your business as a sole proprietor, then make sure to at least file for DBA (‘doing business as’) status. If you do not, then your personal name will ends up being the same as your company name. As a result, you can still end up being personally liable for all your business debts.
Plus, according to the Internal Revenue Service, with this structure you have a 1 in 7 chance of an IRS audit. This is in contrast to a 1 in 50 chance for incorporated businesses! Avoid confusion with this step. And at the same time you can significantly lower your chances of an IRS audit. And who doesn’t want that?
Go one better than a DBA and make your business as a distinct legal entity by way of incorporation
Have a meeting with your tax adviser or financial planner in order to determine which legal entity (sole proprietor, LLC or S-Corp) will best fit your small business and specific financial situation.
Incorporation can also help to protect your personal assets in the event of a lawsuit. Once your corporation or LLC is registered on your state’s Secretary of State’s site, you can then acquire a Business Federal Tax ID Number, so you can open your business’s bank account.
Usually, you chose your business entity via your state’s Secretary of State.
The IRS makes it easy to do this. You can apply online as soon as you determine your eligibility.
If so, then you’re good to go.
Have a conversation with your local bank about getting business checking and other accounts.
If you have been a loyal customer on the personal side of things, that helps. And if you can demonstrate your small business is paying its bills on time, so much the better. So then your bank is going to be a lot happier loaning to your business.
These are really any invoices which are the express responsibility of your company (or, at least, they ought to be). They include everything from Wi-Fi in your business’s name to rent or a mortgage for your office space.
Your business could pay a cell phone provider or even the oil or gas bill, if that is appropriate. Your company will notice credit scores rise as you pay the bills promptly.
Enhance the professionalism of your small business and keep your individual and business credit separated.
Of course, sometimes this is easier said than done. But buying beyond your financial level will just spiral you into debt. While both consumer and business credit are good things, you do not want to have crushing debt, either.
This can mean going to a smaller or more local college. That way, you can save on commuting costs and housing. Tuition may be less. For all institutions of higher learning, price should be one consideration. And another should be how well they place their graduates.
After all, what good is a degree if you can’t get a job?
How long has it been since you had a roommate? Of course privacy is a consideration. But it is a proven means of lowering your bills. Consider group living situations where everyone pitches in. And they aren’t just for college any more.
A good roommate or apartment mate situation can help keep your place more secure.
Housing costs also, most of the time, include utilities. So put on a sweater and turn the heat down. Or take a cool shower and ease up on the air conditioning. Caulk windows and cover them with plastic to seal leaks.
Vacuum your refrigerator’s coils, too – because that can increase electricity usage.
We are currently living in what’s known as a ‘gig economy’. But just what, exactly, does that mean?
It means that you can try your hand at earning more in all sorts of ways. One popular method is by driving for a car sharing service like Uber or Lyft. If you’re artistic, then another means is to sell crafts and new goods on eBay or Etsy.
Or try a small work from home gig on UpWork or Fiverr. Yet another option is to sell unwanted items on eBay or even become a seller on Amazon.
Think creatively. Is there something that you can do? Is there something you can sell? Consider your options. They may be more plentiful than you think. And having more money in your pocket means you’re far more likely to pay your bills on time. Or maybe even early.
And that will definitely boost your consumer credit scores.
Pay attention to your credit scores and your overall financial health and you will be more likely to succeed. You, too, can boost your consumer credit scores.