Business and Personal credit

Quoting Real Person

Hi Bo,

I have read through you blog and you seem like "the guy" to talk to
regarding my situation. I am a small business owner. I just started my new company one month ago. I recently checked my credit report and found I have a POOR Beacon Score of 563 through Experian. I need help establishing my business credit as well
as fixing my POOR personal credit.

This is my own fault as I did not take my credit seriously and for years relied on cash payments for everything. I had no idea how much this would hurt me down the road and figured I didn't need credit. This comes from being raised by a "creditaphobic". My family didn't believe in credit. It was taboo to even talk about it in my household when I was growing up. This stemmed from my fathers experience when his mother ran up major bills on her Sears Card when they first came out some 10,000 years ago. So needless to say I didn't take it seriously enough to follow through with establishing a good credit record. This was foolish on my part and I am paying for it now.

Recently I have had a major change of heart and realization that credit is something you need. When you sign that paper, that is your word. Even more than your word it is in writing and might as well be written in blood. It is what you say you are and tells others if you are dependable and that they can trust you. This realization I hope has not come too late and I hope and pray I can fix what took me years to mess up.

Back to my new corporation. I started it on April 19th 2005. I filed all paperwork and now am the proud owner of a few dozen sheets of paper with some really cool sounding legal language on it which says I own a new Florida for profit corporation. YAY! I know it really does mean something, and I am proud to own my own corporation. But creditors and banks don't look at it that way, and surely don't share in my enthusiasm.

Every bank and creditor I talk to says I need to give them my personal information to apply for a business credit card under the corporate name. What can I do to get a business credit card, or establish credit for my new corporation? Is it possible to apply for and receive a business credit card "without" using my personal credit score? What suggestions do you have to establish my business credit and fix my personal credit at the same time? What Beacon score would you suggest to apply for a credit card for business or personal, and would it be wise to apply for credit at this juncture? I have 3 inquiries on my credit for the year unfortunately and don't know where they came from and don't want anymore. Would it be a good idea to just apply for as many credit cards as possible at one time and play the numbers game or would I be wasting my time and lowering my score for no reason?

I would like to use the business credit cards for start up capitol and to purchase initial inventory and equipment. If you know of anything that might help I would be greatly appreciative. I have checked the SBA, FTC, BBB, FirstGov.com, and a myriad of other sites for any information regarding what kind of beacon score I need for a credit card of any type but have found very little information regarding actual scores needed. I know all cards are not created equal and requirements vary by creditor, but there has got to be a general rule of thumb here. What's the minimum Beacon score I should have when applying for an unsecured credit card? Am I wasting my time with a score of 563?

Wow! I know that a lot of questions but I have never done this before and never had a credit card in my life. The closest thing is my Debit Card through my bank and credit union. I have 4 bank accounts with 1 bank and 1 credit union. 2 business accounts and 2 personal account with 3 Debit Cards.
I have not applied for any cards yet and don't want the inquiries on my credit report. I don't even know if inquiries would hurt me at this point.
Help please...
Regards,
REAL PERSON

To be a corporation that relies on it's own merit it has to be at least three years old. So you have to rely on your personal credit until that days comes. When that day does come try to transfer everything to the corporation to isolate yourself from finacial ruin.
I would max out whatever i had until that day. Asssuming you will make. If you don't. It would probably be wise to file BK as you will not be able to repay without a business. I know this from from best friends activity in GA.
You need a 640+ Beacon

Repeated sstudent loan entries and credit scores

----- Original Message -----
From: Real Person
To: Bobo@oskie.com
Sent: Thursday, May 26, 2005 11:25 PM
Subject: Consoladated Accounts
Bo,
I used student loans to pay for my college education and my lenders differed from one semester to the next. Upon graduating, I consoladated my student loans into one payment. Consequently my credit report consist of 10 to 15 pages of transferred/consoladated student loans. Creditors have consistently brought this up during purchases and this has really cast a negative outlook on my credit report. Is it lawful for these transferred/consoladated accounts to remain on my credit report. I feel that these are pointless entries and should not be on my credit report.

RLP

If you did transfer / consolidate loans several times or even once, yes this is legal. The more accurate assumption I would make is that, all you have are loans that have been deferred over and over and no real person credit and at some point you will have to pay the piper. Many lenders veiw these strung out loans as a possible future reason for you to bank rupt on them. So those loans make you a higher risk. The best way to compensate for this, would be a huge salary and long term job time.

Bobo Majors
931-455-6066 Work Russell Barnett KIA

Charge off Mistake will not come off at Experian but does at the others.

----- Original Message -----
From: REAL PERSON
To: bobo@oskie.com
Sent: Thursday, May 26, 2005 6:07 PM
Subject: Charged Off .... But not Really
Hi Bo:

I came across your blog as I am suffering from a headache on my credit report. I have a negative item on my report from a creditor and I don't believe it should be on there. TransUnion researched it and deleted it, but Experian will not and I am unable to get credit because of it. The scenario is this:

3 yrs ago, I had a past due balance with a cell phone company. I received a letter from this creditor saying that I had to pay the balance within 30-45 days or it would be forwarded to a collection agency and reported to the credit bureaus. I paid the amount in 27 days. I have proof of payment. However, on my credit report, this item is listed as negative and it says that it was charged/written off.

Do I have a case to make for getting this off my report since I paid it within the timeframe my creditor gave me? Should this be a negative item since it was paid?

Thanks for your help!

~~Mad at Experian

It would be better to be mad at the phone company. Go to them but do it in a somber tone. Explain how you are trying to buy a home and this one item is holding you back. Explain you are certain it is a mistake and show a canceled check or payment stub for proof. Ask them for a letter saying account paid in full and as agreeded and mail that in. If Experian refuses to take it off it is soley due to the phone company verifying the account as being late and past due.
Good Luck and get that letter.
Bobo Majors
931-455-6066 Work Russell Barnett KIA

Bankrupcy and credit reports

----- Original Message -----
From: REAL PERSON
To: majors@oskie.com
Sent: Thursday, May 26, 2005 4:20 PM
Subject: Dear Sir, Repairing credit after, BK

Dear Sir, I am writing you to ask for advice. I had recently filed chapter 13, and have as of to date received a credit report that has been updated, still shows most all of the former debits, by using your despute form can, or will the credit agency's repair or update the report to show, the cases dismissed under bankruptcy?

Thank You, for veiwing this e-mail. Sincerely R. Person

The only thing they can do is add an attachment to each included in bk item which will not help your score

You might dispute some hoping for total removal first. Say it is not your account. If the bureau doesn't remove it, send another dispute with attchments to each item on bk to say involved in Bk.

Bobo Majors
931-455-6066 Work Russell Barnett KIA

Charge off acounts. When do they come of credit reports.

----- Original Message -----
From: REAL PERSON
To: majors@oskie.com
Sent: Wednesday, May 25, 2005 10:28 AM
Subject: charge off account
Hello. My question is if an account is in the “charge off” status, will it be removed in 7 years even if the balance is not paid off

Yes it will. Sort of like the statute of limitations. The thing to look for is when was the last activity date on the account. 7 years start from date of last activity.
Good Luck

Bobo Majors
931-455-6066 Work Russell Barnett KIA

Pay Collection and Keep Credit cards open?

----- Original Message -----
From: Real Person
To: majors@oskie.com
Sent: Tuesday, May 24, 2005 9:32 PM
Subject: re:credit
I have been trying to pay all my bills on time lately. At the begining of the year I will be trying to purchase a house. I only have four active accounts on my credit 2 credit cards a car and a furniture bill. My car and furniture bill will be paid off in a month or so, the only thing I will have is the two credit cards. By not opening up any more accounts do u think my credit score will go up with just those two account. I also am paying of some old accounts collections with balances is this a goioid idea?

When I answer questions about credit I really must admit I am in the dark. I haven't seen a persons credit in most cases. I haven't taken a credit application to help me understand your positon in life, and the information I get is limited.
Make sure you have paid at least 12 months on any credit so it will be rated. Yes these will help your score.
"Old collection" sounds like a problem but not one to avoid. Yes pay them off, unless they are 5 years or older, thus redating the collection. EXCEPTION your lender ask, or the credit / collection agency promises to take the collection / slow pay off or, mark as paid in full and as agreeded.
Good Luck
Bobo Majors
931-455-6066 Work Russell Barnett KIA

Home Loan Qualification and Credit Scores

----- Original Message -----
From: Real Person
To: Bobo@oskie.com
Cc: o_greer@yahoo.com
Sent: Tuesday, May 24, 2005 12:47 PM
Subject: concerned person
Your website is great, and very enlightening. I have already disputed some things on my credit report, and I am just waiting to hear. My wife and I are hoping to buy our first home.. My Equifax beacon is 651, Experian 642, and TransUnion 622. Will I be able to get a loan for a home with these scores? I would appreciate some advice on what to do. Thanks, R P

realperson@bellsouth.net

Home loans are much easier to qualify for if you have sufficent downpayment. 10 - 20 percent. And a 640+ beacon score. So I would suppose you can buy whatever you wish as long as you have a downpayent. Even if your score is below the 640 range downpayment, job time, local realatives and other factors can get you financed. There are almost endless ways to buy home with endless lenders. Ther are many people in your area right now who own homes and will owner finance for you with reasonable terms even if a first rate mortgage compny disqualifies you due to the one 622. If they do, I would work on that one. Pay down to 80% of high credit limit on all your accounts. Dispute a few things. you can raise that one 18 points I'm sure.
Good Luck
Bobo Majors
931-455-6066 Work Russell Barnett KIA

Credit Card Debt w a 715 Beacon. Should I ask for settlement or pay.

----- Original Message -----
From: Real Person
To: majors@oskie.com
Sent: Monday, May 23, 2005 12:34 PM
Subject: just wondering
I am going to take out a loan to pay credit card bills already approved my credit score is 715 now. If I call the credit card company and ask them for a settlement amount to be less than i owe would hurt my credit alot. or should I just pay the balances owed and forget the whole idea. I have never been late with any bills or been turned down for a loan just my credit card debt is huge.

By all means pay in full. Your credit is too good to settlement anything if there is any way to pay. How much money are we talking?
Bobo Majors
931-455-6066 Work Russell Barnett KIA

----- Reply Message -----
From: REAL PERSON
To: majors@oskie.com
Sent: Monday, May 23, 2005 4:12 PM
Subject: just wondering 2
Thanks! I thought you were going to say that. I guess I just wanted to try what some others try but okay pay in full I will do thanks. The answer to your question 70,000.00 but I can repay in 5 years at 5.99 thats not so bad i guess.

Depends on your income and ability not to continue debting
If your debt becomes more than 45% against income, meaning monthly income minus monthly debt on car, home / rent, credit cards and any other revoling debt, then you are considered insolvent by most lenders.
In this instance i would say settle.
Bobo Majors
931-455-6066 Work Russell Barnett KIA

Pay Settlement or In Full for better credit?

From: REAL PERSON
To: majors@oskie.com
Sent: Monday, May 23, 2005 1:49 PM
Subject: Settlement or payment in full
Hi Bo,
I was browsing the internet for a good information on how to do it yourself credit repair and found your website very very helpful and no bull (....).
I have beginners questions for you. I'm trying to settle one of my account, and it's currently with the collection agency as well. The collection agency got a settle plan which take 30% off the full amount. It's $ 101.00 so I would only pay around $75
Do I need to pay the full amount for a good standing or pay the settlement plan?
Does it make any difference?
Thanks in advance,
Real Person

Unless both places, the collection agency and orignal creditor both agree to "account paid in full and as agreeded" your credit will not be helped much other than getting the balance out of the past due column. The MAJOR problem is it will show up as a collection AND a late or settled account on the original creditor and the accounts' date of last activity will show todays date thus making 7 years (removal) or 2 years (diminished effect) start now.
I would try for both and settle for nothing less than one entry on this account, the collection or original creditor.
Make sure one goes away totally and the other shows paid at the very least. Co-operation may prove difficult but go for it in a humble manner.
So pay the settlement or play offense and try for total removal by agreement to pay full or extra. Sounds to me though that the answer to your question is ...... Not much difference if any at all.

Good Luck
Bobo Majors
931-455-6066 Work Russell Barnett KIA

Credit Card Late Payments, Credit Limits and Balances

----- Original Message -----
From: REAL PERSON
To: majors@oskie.com
Sent: Sunday, May 22, 2005 11:56 AM
Subject: Credit Help!!!!

Hi Bo,
I was reading your website and it is choc full of info!
I have 2 delinquencies on my credit report for late payment over 30 days. I called the credit card company and they told me that they could do nothing to remove the delinquencies from my credit unless it was their error. Do I have any other options or am I stuck waiting 7 years?
Another question if I pay my credit card debt down to below 25-30% of their limits will that bring up my credit score significantly? If so could you estimate?
Thanks for your website and all of your help!
Sincerely,
R Person

It sounds as if the answer would be no to the first question. You have tried to no avail unless you have a check receipt from your bank before the 30 days past due date. You are entitled by law to dispute this entry through the bureaus. The answer will probably be the same. Try to get 2 years behind you and ask for help then. Do not close your account and pay them well and your score will go up anyway.
If you pay down any account to below the 80% against you highest allowed limit on the account, it will help your score and sometimes significantly. So do it!


Bobo Majors
931-455-6066 Work Russell Barnett KIA

Settlements or Paid as Agreeded. Click here and clean credit reports

From: realperson@aol.com
To: majors@oskie.com
Sent: Saturday, May 21, 2005 9:05 AM
Subject: (no subject)
I am clearing up my debt and have been offered settlements. One company is owed $1000 but offered two settlements. One for $700 which will be marked paid in full, while the second settlement was for $500 which will be marked settled.

Is there any real difference as far as my credit report is concerned.
SJ
To help your score, your credit report has to show paid as agreeded with no late payments AND in full. So the answer would be no and possibly a small yes. These will not help your score if you have entries in the overdue column. Paying in full will clear this column and it will help your score some. The overiding factor on scores are paid as agreeded and in full. Any late payments or settlemnts will still show you were late at some point in time, thus lowering your score. The up side is to pay every bill you have no matter what your score is but try to use payment as a lever to have thing marked paid as agreeded and in full. The back side, if you pay now is, todays date will show as the latest activity which is where the seven years will start. After 2 years, good or bad credit has diminshed relevance on scores. So for at least 2 years your payment will have more effect in the negative, due to recent activity. Get a gas card by sending them money with your application and overide the recent negative, with recent positive credit.
Good luck
Bobo Majors
931-455-6066 Work Russell Barnett KIA