You may have more business leverage than you think


When money moves the world, it rotates on a credit axis. In business parlance, the best founders think that credit is an investment in yourself. Instead of going to the bank for a loan or looking for angel investors, credit cards can be used to access tens of thousands of dollars in capital. That is, when your credit report signals to the credit card companies that you can actually invest and repay this money sensibly.

But what if credit reports aren’t always accurate? We tend to think that has to be so, and simply assume that if we are given a credit limit, it has to be based on something factual and fair across the board. Indeed, that cannot be true. Arnita Johnson-Hall is a millennial credit coach and consumer credit advocate whose blog, Luxurious credit, has helped women really understand their credit. And this is imperative because loud CBS news, “79% of all credit reports contain errors, and 25% of those errors result in a consumer being denied credit.”

At a time when entrepreneurs need more financial leeway than ever before, knowing how to analyze your credit report, scan for errors, and access more credit can be vital to your business. Johnson-Hall has been helping women challenge the inaccuracies in their credit reports for nearly a decade – here are her tips.

How to analyze your credit report

Johnson-Hall says the first and most important step in understanding your creditworthiness is to analyze a credit report. “Understanding your credit report can mean the difference between fair and good credit,” she said. “Only when you know exactly where you stand with your lenders, guarantors and creditors can you really see what your current credit situation is and how you can improve it.”

In order to do this? Get a credit report and actually go over it with a fine tooth comb. “I always tell customers and women not to take the report at face value or just as a fact. Just because it’s a report from a trusted credit company doesn’t mean it’s completely accurate. ”

Johnson-Hall said the major lending firms (Equifax, Experian, and TransUnion) all share the same information in their credit reports, but in slightly different formats. “The important thing to know is that these credit reports are exactly what companies or creditors see when they manage your credit,” she said. “It is important to assess the accuracy of everything, but look out for the following in particular.”

  1. Safescan warnings. “This is how you know whether or not you’ve been a victim of identity fraud,” said Johnson-Hall. “The report goes through your social security number to see if it has been used or linked by any other person, dead or living.”
  2. The profile summary. “This includes relevant information such as your highest and lowest credit limit, how many accounts you have open (including foreign office accounts), and the existence of all public records.”
  3. Request notification of how many requests for loan applications or inflated rental requests have been made.
  4. Tradelines: Details of your credit accounts are displayed here. This can include, for example, account numbers, contract terms, credit limit, balance owed, 24-month history, arrears and more.

“Assess everything in the credit report and look for anything that is not factual,” urges Johnson-Hall. “It is imperative that every lender who sees your report actually gets an accurate picture of your credit history.”

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Improve your credit score

Johnson-Hall added that an important way to improve your credit report is to add a consumer statement. “This is where you can share your side of the story or add color to specific sections,” she explained. “For example, maybe there was an extenuating factor for a previous delinquency, but that was many years ago and you worked it through.”

Additionally, sometimes your credit needs revision if it’s not quite where you want it to be. “Much of the improvement in credit quality comes from habits such as living on your means and paying bills quickly,” said Johnson-Hall. “I’ve found that many of the women I work with don’t want to pay their bills too late, but have a habit of putting them aside when they receive them and then forgetting to pay them.”

Because of this, automatic payment or instant payment invoices can help revitalize creditworthiness. She also recommends clearing out and simplifying your entire financial practice. “Choose electronic invoices instead of paper invoices and organize all of this expense information in apps or online resources. Apps like NeatDesk or NeatReceipts are great ways to save paper receipts without a pile of them scattered around your desk or around your house. Record them right after you return from dining or shopping so you don’t forget or lose them.

“Also, create a routine where you go through your expenses each week to see where the money is really going. Also, consider investing a large portion of your income in saving to avoid the temptation to just spend. There is a tendency to see that there is money available and then to consider what to spend it on. Eliminate this tendency as much as possible so that you always have more than enough for your bills. ”

Lever building is a two-pronged strategy: making sure your current credit report is accurate and doing your part in increasing your credit score, one little financial habit at a time.

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