This Month’s Newsletter is brought to you by Business Credit 101!
If you are a business owner or if you are looking to start a new business, one of the most overlooked resources available to you is your business credit. There are so many benefits to establishing and building your business credit including:
Separate Liabilities from your personal to your business
Minimize personal DTI / Debt to Income Ratio
Get access to high limit credit accounts in the business name
Get access to Government programs and Grants
Open doors for vendor, business, and investor relationships
Reduce cost on business insurances and landlords scrutiny
Increase the value of your business for future Sale
The first step in establishing business credit is making sure your business is Credible in the eyes of the banks, lenders, and the business credit bureaus; Dun & Bradstreet, Experian, and Equifax Business credit divisions. There are 10 items or data points that must be in place so that your business is “Credible”.
Once your business is Credible, we then move on to earning a “Paydex” score. To earn a Paydex score you will need 3-5 business credit accounts to report to D&B. At this point, Round 1 or Tier 1 is completed and your business is in a position with a legitimate business credit profile. You are ready to move on to the next tier and qualify for government grants and business funding.
A Paydex score is a score that is created by Dun & Brad street once you establish a business credit profile on their platform. The first thing you have to do is establish a “credible” business, set up a free Duns number, and then you’ll need 3 to 5 starter business credit reporting accounts that will report to D&B. Once you have 3 to 5 accounts reporting, you will then be issued a Paydex score. Getting a high Paydex score requires strategic payment timing. Your score is from 0 to 100 and 80+ is good 90+ is excellent.
Keep Building – Tier 2
In Tier 2 you will begin to now have access to more powerful accounts with larger limits. You will be able to access a mixture of Net 30 accounts, Revolving Credit Lines, Retail accounts, and Fleet accounts.
You are now building your business credit and momentum is on your side. By the end of this round and based on the accounts you set up in Tier 1 you should have at least 7-8 accounts. Reporting on your business credit profile.
You should have an 80 or higher Paydex score. Your business should be easy to find in public records, all of your data points are intact and match across all platforms.
Tiers 3-4 are going to be more of the same from Tier 2, just with access to even bigger and better account options, collectively giving you access up to $100,000 plus of credit. Once you have completed Tier 4 you should have 14+ accounts reporting on your business credit profile.
Our partners at Business Credit 101 can help you from start to finish.
They can save you time and money on your business credit journey by providing you with clear step by step instructions.
Don’t wait until you need funding to start building! Click here to begin with a Free Business Credit 101 Builder Consultation today!
Debt consolidation and debt settlement are both options for resolving debt. However, each method has a different strategy and timeline before you are free of debt. They each can affect your credit score differently.
Debt consolidation is a debt management strategy in which you combine multiple debts into a single payment, with a lower interest rate. You can use a balance-transfer credit card, debt consolidation loan, home-equity loan or 401(k) loan.
Why You Might Choose It:
What You Need To Know:
Debt settlement is the process of negotiating with creditors (usually credit card issuers) to reduce the amount you owe in exchange for a one-time lump sum payment to settle the account.
Why You Might Choose It:
What You Need To Know:
Tackling debt can be an important financial and personal goal. If you have any questions about either of these debt relief methods call me at (800) 822-7120. I can help!
Whether you are liable for your spouse’s debts depends on factors such as; if you live in a common-law state or a community property state and what kind of debt it is.
Common-Law State or a Community Property State
The IRS says most states operate under what is called common law. If a married couple opens a joint account or gets a shared credit card, they will both be responsible for paying back the debt.
In common law states, you’re usually only liable for credit card debt if the obligation is in your name. So, if the credit card is only in your spouse’s name, you’re typically not liable for that debt. Additionally, assets acquired by one member of a married couple are typically deemed to belong to that person, unless they were put in the names of both.
The laws are very different in America’s nine community property states, where the laws require that any property acquired, debt accumulated, and income earned during the marriage is the property or debt of each spouse.
What Kind of Debt is It?
In most states, you are not legally responsible for bills racked up before getting married. However, if you and your spouse open a joint account or get a shared credit card, you both will be responsible for paying back the debt. Even if the spending was done solely by your spouse.
Similarly, If you’re the cosigner on a loan for your spouse, your credit score will be hurt if your partner misses a payment. That’s because when you cosign for a loan, you’re signing on to be equally responsible for the debt. If they miss payments, the debtor could come after you for payments. The same situation applies if you and your spouse use a joint credit card.
In Common law states, property can be individually owned unless both names are on the contract. However, in community property states, assets and liabilities that either person acquires during the marriage become the joint property of both spouses.
There are some exceptions for necessary joint household expenses. Debt that was racked up for things like child care, housing or food must be shared by both parties, even if a joint account was not created.
If you have any questions at all please call us at (800) 822-7120.
A recent change in rules by the US Consumer Financial Protection Bureau (CFPB) allows debt collectors to contact you by direct message on social networks, email, or text message.
No one likes debt collector calls and emails or text messages most certainly will not be welcomed, especially when you have no debts to collect. You could block the number used for text messages, but whether it’s a scam text or a legitimate debt collector, they can always contact you from yet another phone number.
There is some good news here… the rules do require debt collectors to provide you a way to opt-out of further messages, whether from email, text message, or direct message. You might have to call or email the debt collector back in order to opt-out as they are not being mandated to have to provide that in text or social networks directly.
If you have any questions about this ruling or if THD Credit can be of assistance to you in anyway – call us at 800- 822-7120. We are here to help!