How I Went from $0 Business Credit to Over $300,000 by M.U. Sylvester - HTML preview

RESOURCES

What is the IRS Form 4506-T?
4506 -T is an Internal Revenue Service (IRS) document that is used to retrieve past tax returns, W-2, and 1099 transcripts that are on file with the IRS. The document gives permission for a third party to retrieve the tax payer’s data. By signing and dating the 4506 T, you are giving lenders permission to pull your tax returns.

What ARE Net 30s?
Net 30s are specific type of trade credit where the payment is due in full 30 days after the item is purchased.

There are hundreds of Net 30 accounts. These accounts are your starter accounts that build your business credit history. These accounts will report to Dun and Bradstreet, Experian, and Equifax.

What is a foreign listing?
A listing that would not normally be included in Verizon’s print directory for a geographic area. Listings in an alphabetical directory of an area other than the area from which the listed service is furnished. 800-500-5410

What is List yourself? – www.listyourself.net
The list yourself! service provides a way to publish your telephone number independent of who your carrier is. The service enables you to be looked up through 411 directory service.

Some are not able to participate in the directory assistance service, because they may have a VoIP line or cell phone or a toll free 800 number and their carrier does not provide their listing data to the listing data base providers.

What is Metropcs?
Metropcs.com is a cell phone provider that caters to those who have bad credit. Most cell phone companies will pull your personal credit report. If you have blemish credit you will be decline in most cases or require to leave a deposit. With Metropcs no contract is necessary. No credit check is perform. You will receive unlimited local and long distance calls for a flat monthly price.

What is a personal credit Score?
Your personal credit score is a number that reflects your creditworthiness. The higher your score the better your credit. Individuals with high credit scores can obtain mortgages, credit cards, loans with better terms. The lower your score the worse your credit is and more than likely you will be decline for credit.

The general scoring ranges are between 300 – 850. Fair Isaac divides the scores into five categories.

780 – 850 – Excellent credit
750 – 780 – Excellent credit
689 – 740 - Good credit
640 – 688 – Medium Risk
620 – and Below – High Risk”

A credit score can change quickly for several reasons, including late payments being added or deleted on your credit report. Also big increases in your credit card balances.

Each credit bureau may have different information about you, in part because some creditors report to one or two bureaus not all 3. This results in different credit scores among the three major bureaus.

Security freeze or Credit freeze
A security or credit freeze are the same thing. A security freeze gives consumers the option to lock access to their credit reports against anyone trying to open up accounts or to get new credit in their name.

Having a security freeze in place at all three major credit bureaus, an identity thief cannot open a new account because the potential creditor or seller of services will not be able to check the credit file. When the consumer is applying for credit, he or she can lift the freeze temporarily using a PIN so legitimate applications for credit can be serviced.

Also known as a credit report freeze, a credit report lock down, allows an individual to control how a U.S. consumer reporting agency Equifax, Experian, and Transunion able to sell his or her data. The credit freeze locks the data at the consumer reporting agency until an individual gives permission for the release of the data.

Credit freezes are made possible by state laws as well as industry-initiated rules. Laws have been passed by nearly all the US states.

Each year in the United States, approximately 15 percent of all cases of identity theft are cases of new account origination identity theft, according to the Federal trade commission.

Lenders require access to the borrower's credit report before issuing a loan in the borrower's name. If lenders cannot see the borrower's credit report, it is unlikely the lender will issue a loan in the borrower's name.

In order to freeze access to one's credit report, it is necessary to contact each of the three major credit reporting agencies. The associated fees also differ from state to state. How to request a security freeze?

 

To request a security freeze, contact the major 3 consumer reporting agencies: Experian (888-397-3742), Equifax (888-766-0008), and TransUnion (888-909-8872).

 

You may request a security freeze by sending a written request by certified mail, overnight mail,to the following addresses:

 

Experian, P.O. Box 9554, Allen, TX 75013

 

Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348

TransUnion, Fraud Victim Assistance Department, P.O. Box 6790, Fullerton, CA 92834
(overnight mail may be sent to TransUnion, Fraud Victim Assistance Department, 1561
E. Orangethorpe Avenue, Fullerton, CA 92831)

Requests must include all of the following: your full name; social security number; date of birth; current address; and previous addresses for the past two years. In addition, enclose one copy of a government-issued identification card, such as a driver’s license or state or military ID card, and one copy of a utility bill.

A consumer reporting agency will place a security freeze on your consumer report within 3 business days after receiving your request. The consumer reporting agency will send you a written confirmation of the security freeze within 5 business days after receiving your request.

How long will a credit freeze remain in place?

 

A credit freeze will remain in place until a request is made to remove it.

Dun and Bradstreet
D&B, or Dun & Bradstreet, is a long-established name in business information services, founded in 1841 as the Mercantile Agency. D&B is headquartered in Short Hills, NJ. D&B's major product lines include:

D&B is a respected name in business and financial information services, and is the leader in business credit reports. Information provided by D&B is vital to the operations of many businesses in many industries. Its unique 9 digit D-U-N-S number is very well established as the standard identification number for businesses.

Dun & Bradstreet has been providing commercial information about business enterprises for almost 170 years. At this juncture in the 21st century, Dun & Bradstreet is the leading resource for information about businesses in operation in all parts of the world. Dun & Bradstreet maintains records on more than 100 million business enterprises.

DUNS allows banks, other financial institutions, corporate researchers and others the ability to track down information about companies that are part of this record maintenance system.

Commercial Lending
Financial institutions review information to determine creditworthiness of a business enterprise. Financing is approved or denied to a large extent depending on what is contained in the records of Duns & Bradstreet.

DUNS Number

 

What is a DUNS number?

 

It’s a nine-digit number that identifies your organization.

This number can be used to access a database which details the name of the company, its address, telephone number, line of business and number of employees - along with other pertinent information about the specific company.

A DUNS number is different than your E.I.N, or your tax I.D, in many large businesses, there may be a large number of different businesses, each one a separate Corporation, or partnership with a different tax identification number, those businesses are all part of one business conglomerate.

This necessitated the need for DUNS number, which allows businesses that are technically of separate businesses to be joined together as one.

 

Some of the information that you will need in order to obtain your DUNS number is:

 

How to Get a DUNS number?

 

To get a DUNS number, go to Dun and Bradstreet site and apply for your number.

 

Dnb.com

 

1) The name of the company

 

2) The address of the company

 

3) The name of the company or firm owner

 

4) The legal structure of the business

 

5) The year the business started.

Whether or not your company is located inside the United States, or anywhere else in the world, your business can, and should, obtain a DUNS number. This will allow you business to be recognized as a business, and allow you business to obtain loans, lines of credit, government grants, leases, and will also get your company onto mailing

Paydex Score
As a business owner one of the most important things to know is your Paydex score. Your company’s Paydex score is the business equivalent to your personal FICO score, or personal credit score. Knowing what this number is and having the means of increasing your Paydex score can mean acquiring the financing needed to start or grow your business. On the other hand, not managing your Paydex score can cost your business.

The D&B PAYDEX Score is D&B's unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors. The D&B PAYDEX Score ranges from 1 to 100, with higher scores indicating better payment history.

The higher the score the better. Now, how do you increase your Paydex score or establish a score if you don’t have one yet. First, know what you are doing.

1 – Know what your payment pattern means
The highest scores are given to Companies who pay the bill PRIOR to the invoice being sent. This payment pattern is considered an anticipatory payment pattern. The company anticipates the payment is due and pays it ahead of time. This is the highest responsibility a company can display and will earn high points for your company.

2 – Understand what the Paydex score means
So, your business has a Paydex score of 80. What does the Paydex score mean? Is this good or bad? Well, for this example a 80 Paydex score would be the equivalent of a FICO score of about 700 or above. This is a good Paydex score.

Paydex payment score

 

100 - Anticipate – Payment detail may state: payments are received prior to date of invoice (Anticipated)

 

90 - Discount - Payment detail may state: payments are received within trade discount period (Discount)

 

80 - Prompt - Payment detail may state: payments are received

 

within terms granted

 

70 - 15 Days Beyond Terms

 

60 - 22 Days Beyond Terms

 

50 - 30 Days Beyond Terms

 

40 - 60 Days Beyond Terms

 

30 - 90 Days Beyond Terms

 

20 - 120 Days Beyond

 

UN - Unavailable

 

The payment details section may include the following comments on your payment patterns:

 

Antic - payments are received prior to date of invoice (Anticipated).

 

Disc - payments are received within trade discount period (Discount).

 

Ppt - payments are received within terms granted (Prompt).

 

Slow - payments are beyond vendor's terms. For example, "Slow 30" means payments are 30 days past due.

 

Ppt-Slow - some invoices are paid within terms, others are paid beyond terms.

(#) -indicates that no manner of payment was provided; the number merely reflects the line where it appears in the listing. For example, (004) means it is the fourth experience listed.
Payment Commentary - such as "Cash in Advance," "Account in Dispute," "Credit Refused," or "Placed for Collection" may also display next to trade details. "Placed for Collection" means the account was forwarded to a third party for collection action during the past year.

4 – Manage Your Business Credit Responsibly
If you own your own business you are probably not 18 years old anymore and should know how important maintaining good credit is. A strong Paydex score can give you the credit lines you need to increase your marketing effort, buy the needed equipment, get the supplies required to land big clients, and could be the difference in your companies success.

With all that at stake it is of the utmost importance to manage your credit with the highest level of responsibility.

How to Raise Your Paydex Score?
The best way to raise your score is to pay all of your bills early. For example, to raise your score beyond 80, you must pay ahead of time, In other words, if your creditor gives you 30 days to pay, make an effort to pay 10 days in advance. Such practice will raise your Paydex score and push it above 80.

Since Paydex Score is a measure of your business worthiness, it's obvious that you need to build your score early and keep it high at all times - especially so if you're a small business owner in need of business financing.

As a rule of thumb, it's a good idea to establish your Paydex score at least six months before you plan to get a loan.

D&B Rating Table

5A to HH ratings reflect company size based on net worth or equity as computed by D&B. These ratings are assigned to businesses that have supplied D&B with current financial information.

The 1R and 2R ratings reflect company size based on the total number of employees employed. They are assigned to business files that do not contain a current financial statement.

In 1R and 2R Ratings, the 2, 3, or 4 creditworthiness indicator is based on analysis by D&B of public filings, trade payments, business age and other important factors. 2 is the highest Credit for a company that has not supplied D&B with current financial information.

Rating Credit appraisal

 

1R 10 employees and over 2 3 4

 

2R 1 to 9 2 3 4

 

INV D&B is investigating or gathering information

 

DS The information available does not allow d&b to classify the company

 

Employee range

 

ER8 1-4 employees

 

ER7 5-9 employees

Credit Builders Program
Sometimes when purchasing from a vendor using a line of credit, you have to wait on this vendor to report their business experience with you (a trade line). Some companies that you deal with may not even report to Dun and Bradstreet and that works against your building of credit.

D&B’s Credit Builders helps with this:

 

First if you’re doing business with a company or an individual that does not report to D&B, you can have D&B call that company and report a trade line on their behalf.

It’s relatively simple, when you purchase your Credit Builders service “your personal representative” will email you a form for you to complete and put in your credit references. The company information, and contact phone number. D&B will subsequently contact the company and verify the information and add a trade line for your company. Which can be completed in as little as three weeks.

Equifax Business report
Equifax business report has become a force to be reckoned with as far as business credit reporting. They are providing one of the most in depth credit reporting services. Listing every credit transactions your business is engage in.

Net 30s accounts, business store cards, business credit cards, business loans and business line of credit.

 

All of your hidden business credit cards that don’t show up on your personal credit report are sitting on Equifax business report.

 

Experian Business report

 

Another one of the major three business credit reporting agencies.

Small Business Advisory service

www.smallbusinessadvisory.net

Offers consultation services to new and experience entrepreneurs to assist them in getting the financing their companies need. We’ve been their and done that, so we are absolutely certain, we can assist you too. We’ve assemble a team of experienced advisors ready to jump in and tackle whatever problems your company may be facing acquiring capital.

Whether you’re just starting out or you’re an experienced business person, we offer CONSULTATION SERVICES that will take you from where you are to where you want to go.

Sometimes you get stuck with a daunting problem you just don’t know how to solve. Put our Team of Advisors to work. Contact us for a consultation today; we will do our very best for you.