ForumsStarting a Business

Do you know what your credit score is? Do you have derogatory credit or just a minimal credit history?

The first thing you should do is get a copy of your credit report and make sure all the info is accurate. You can dispute any incorrect items and have them removed from your credit report. Beyond that there are some factors that can drag your score down.

The big ones:

number of inquiries in the past 6 months - if you apply for loans at every bank in town, constantly apply for credit cards, and open accounts at retails for that coveted 10% off, that all may hurt your score. If you have a large number of inquires, waiting for them to roll off should help your score.

Percentage of revolving credit available -
How much credit you have available to you as a percentage of your overall revolving credit will impact your score. For example, if you only have 1 credit card with a $1,000 limit and you transfer a $1000 balance onto the card, you will now have 0% of your revolving credit available. Creditors view this as a negative item because the closer you are to having 0% of your revolving credit available, the closer it means you are to having you credit cards "maxed out".

Late Payments - For every 30 days that go by without a creditor receiving at least the minimum payment, your credit score will be negatively effected. There isnt much you can do about these unless they have been incorrectly reported.

If your credit score is hurting due to items that can't be fixed immediately, perhaps you should consider borrowing from family, friends, a peer-to-peer lending network, home equity loans, and as a last resort, credit cards. While not ideal, these are all funding sources that budding entreprenuers have used to get the business up and running. Keep in mind that the rates on these tend to be higher, which reflects the high risk of failure among small businesses. But if you really believe in your idea, non-bank financing may be the way to go to make it happen. Best of luck!