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Keeping track of your credit is a crucial step in rebuilding your credit profile, especially after a bankruptcy. Let’s take a closer look at what happens, after the dust has settled.
Q: What happens AFTER you file for bankruptcy?
THD Expert: When you file for bankruptcy, the law says that you must list all of your debts, even if you plan on continuing to pay them. You pick and chose what debts you want to continue paying- such as the house if you want to live there or your car if you need it to get to work. But you don’t pick and chose what debts are covered. When a creditor is notified about your bankruptcy, they then report to the credit bureaus that a particular loan was “included in bankruptcy.” At that point, creditors stop reporting the payments you continue to make, such as for a mortgage or car payment. This explains why payments don’t show up on credit reports.
Q: So why is the information on your credit report wrong?
THD Expert: If the credit bureaus worked for you and me, rather than the creditors, it would probably look more like this: The credit bureaus would report your house payments as long as you are current, but they come off if you get behind. Unfortunately, we don’t make up the rules.
Q: How can you make credit bureaus report your payments?
THD Expert: Start off by requesting a payment history from your lenders (such as the mortgage company or car finance company), and use it to dispute the incorrect entries. Lenders are required by law to give you a payment history once per year if you request it. Next, take this payment history and use it to dispute the missing payments on the loan with each of the 3 credit reporting agencies (Equifax, Experian and TransUnion).
Unfortunately, you may have to do this every year as the lender may not start reporting your payments even after you have successfully disputed it.
Now that you know why payments are not showing up after filing for bankruptcy and what you can do about, you can take steps to fix it.
If you’re need help, or have additional questions give me a call or email me today.
CEO, THD Credit Consulting
Phone: (800) 822-7120
Do you have questions you would like to submit to the THD Credit Experts? Email your question to: firstname.lastname@example.org
Watch this video, then lets discuss how paying only the minimum on your credit cards can affect your credit score.
When it comes to your finances, seeing a small minimum amount due on your credit card statement can give you a false sense of security. You might think to yourself, great I only have to pay this amount this month. However, only paying the minimum on your credit cards can affect two factors that help make up your credit score-your payment and your credit utilization.
Your payment history measures how often you pay your bills on time. When a credit card company reports to the credit bureaus monthly, it simply indicates whether you’ve paid as agreed or if you are late. Technically, if you’re making the minimum payment on your credit card, you’re meeting your contractual obligations, and is good news for your credit score.
Simply put, credit card utilization refers to how much of your available credit you use on a monthly basis. How much you owe makes up about 30% of your credit score, and your credit utilization ratio heavily influences that factor.
You can figure out your utilization rate by dividing your total credit card balances by your total credit card limits. I suggest you keep your ratio below 30%.
Here are a few tips to keep your credit utilization ratio low:
While there are no absolutes when it comes to your credit utilization ratio, the 30% rule is a reasonable goal. Consumers who use less of their available credit are seen as less risky borrowers than those who use more of their available credit.
If you have questions about minimum payments, credit utilization or want to talk about rebuilding your credit, give me a call or email me today.
If used the right way, a business credit card can help improve both your business and your personal financial health – which ultimately can lead to more attractive opportunities to grow your business.
Does a business credit card impact my personal credit score?
As with personal credit cards, if you’re paying your bills on time you can expect to see nothing on your credit reports. However, if you or your employer are not paying credit cards (in your name) on time or missing payments expect to see negative marks posted on your credit report and watch as your personal credit score drops. This is also true for your employees. Make sure you trust your employer/employees before signing for that credit card.
How does personal credit affect business credit?
Let me start off by saying there are significant differences between a business line of credit and getting a business loan. When talking about business loans, personal credit scores work the same way as with any other type of lending. Typically, anything less than a 660 and you will have a hard time finding an “A” bank lender with favorable terms. A score of 720 or higher gives you a much better chance at approval with more favorable rates and terms. Using personal credit for a business loan or credit line is common if you run a small business or a start up. You can boost your personal credit score and your business credit score by making payments on time and keeping a low balance in relation to your available credit. Experian recommends keeping your balance at 20% to 30% of your credit limit.
Do you need help with building up your business credit?
One of the first things new businesses should do is start a business credit in the company’s name. Like your personal credit, your business has its own business credit scores and reports.
We can help get your Dun and Bradstreet (D&B) business profile and a paydex score of 80! We also can help get you business credit cards and get negative items removed from your business credit.
Give us a call or email me today!
THD Credit Consulting ・ (800) 822-7120 ・email@example.com
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