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How To Increase Your Credit Score

By Marco Carbajo, Guest Blogger
Published: August 14, 2013

Are low credit scores (FICO® Scores) holding you back from getting the credit you need?

What would an extra 20, 30, 50 or even 100+ points more do for your credit scores?

If you are looking to learn how to increase your credit score, you’ve come to the right place.

Whether you are trying to obtain a credit card, buy or lease a new car, purchase a home or simply raise your scores, I’m going to share with you a simple yet powerful way to do just that.

Did you know 30% of your credit scores (FICO® scores) is impacted by your debt to credit utilization?

Credit utilization is the ratio of your credit card balances to credit limits on your credit reports. To find out your credit utilization, divide your credit card balance by your credit limit. Then multiply it by 100.

If you have been asking yourself "How can I improve my credit score?" you should keep this number under 20%. One of the best ways to lower your credit utilization is simply paying down your revolving credit card debt.

Another strategy is transferring a portion of your balance from one credit card to another card with much lower credit utilization.

It’s far more effective having two credit cards each carrying under a 30% debt to credit utilization. Less effective is having one card carrying 90% credit utilization and the other card carrying 10% credit utilization.

The FICO® scoring model not only looks at your credit utilization for each of your credit cards separately, but it calculates your overall credit utilization as well. High credit utilization in either category can have a negative impact on your scores.

Another way to increase your credit score is by increasing your credit limits. If your individual and overall credit utilization is high, you can lower this number immediately by increasing the amount of credit you have available.

This is accomplished by requesting a credit limit increase from your credit card issuer. Keep in mind that this should only be done if you have great payment history with your credit card company.

Lowering each individual credit card and overall debt to credit utilization could dramatically increase your credit scores depending on how much of a difference you make.

There are many ways you can learn how to increase your credit score, but the real key is learning how to play the game. You can find out more information on how credit scores affect the price of credit and insurance here on IRS.gov.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

How to Choose a Business Name That Helps You - Not Hurts You

By Marco Carbajo, Guest Blogger
Published: July 10, 2013 Updated: July 10, 2013

During the initial stages of starting a business, choosing the right name of your company can be a difficult task to say the least. It may surprise you but even the name of your business can trigger a red flag with some lenders and creditors.

Unfortunately, many business owners don’t take this simple step into consideration, especially when it comes to the business credit building process.

Before you pick a business name, follow these three steps:

Step 1: Conduct a Trademark Search

You may come across a great idea for a business name, but first you should make sure that you won’t be infringing upon a prior user’s trademark.

The first step is to conduct a trademark search by using the Trademark Electronic Search System (TESS).

This search engine allows you to search the database of the United States Patent and Trademark Office. Once you have completed your search and the results uncover no likelihood of confusion, then you will be ready to proceed.

If you fail to follow this step, it can potentially lead to disaster for your business in many ways. Imagine if you had to recall all of your products because of a demand by a prior trademark user. Not only that, but you can end up paying the other party’s attorney fees and monetary damages, which can get very costly.

If you decide to own a federal trademark, your business will have several advantages, such as:

•           Public notice of your claim of ownership of the mark;

•           A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration;

•           The ability to bring an action concerning the mark in federal court;

•           The use of the U.S. registration as a basis to obtain registration in foreign countries;

•           The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods;

•           The right to use the federal registration symbol ® and

•           Listing in the USPTO online databases.

For more trademark information, tools, applications, and documentation visit the U.S. Patent and Trademark Office.

Step 2: Pick a Safe Business Name

One of the common mistakes that can impact your company’s ability in obtaining credit is in the name you choose. Picking the wrong type of business name can automatically label your company as a high risk.

There are certain industries that the business credit reporting agencies classify as risky, so picking a company name in a high risk category can possibly trigger an automatic turndown, higher premium and/or reduced credit limit recommendations for your business.

For example, real estate is considered a very high risk industry, so naming your company John Doe Real Estate Investments would not be the best choice if you plan to apply for financing. Pick a safe name that won’t get your company labeled as a high risk.

Step 3: Pick a Unique Business Name

While the sound and spelling of a business name – as well as the availability of a dotcom – play a key role, don’t let this be the single factor that drives your decision.

What makes a good name for a business from a marketing standpoint is usually the opposite of what makes a good name from a legal standpoint.

Even though you may think that choosing a business name that describes your product in the name is much better for marketing purposes, it does give you less protection from other people using it against you.

It really depends on what makes the best business sense, but this is something you should definitely cover with both your marketing and legal team.

Select a unique business name that is marketable and protects you legally. Before you incorporate, take the time to review these three steps so you can pick a business name that works and benefits you.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

Credit Literacy Quiz: Test Your Credit Knowledge

By Marco Carbajo, Guest Blogger
Published: June 11, 2013

Despite the massive amounts of resources being assembled in the cause of financial literacy, year after year, surveys uncover that people all over the country are as financially and credit illiterate as ever.

Winning this battle requires us to be diligent and forward thinking. It begins by educating our children on sound credit and financial management principles.

To test your credit literacy, see how well you answer the following questions:

  1. Do you know your current FICO® score? You’re not alone if you answered no. Nearly 70.5 million people are unaware of their current credit scores.
  2. If you know your FICO® score, did you know a 740 or above allows you to save the most money and have the most control over your financial position? Unfortunately, about 43 million people have a 599 credit score or lower. Not to mention the millions of people with scores below 740.
  3. Are you aware that identity theft is the fastest growing crime in our country today? It’s shocking to hear that every 3 seconds, an identity is stolen. By the time you finish reading this post, think about the number of people whose identity has just been stolen.
  4. Do you know one of the ways to protect your credit scores is to keep credit card balances under 30% of the credit limits? Your level of debt, also known as credit utilization, accounts for 30% of your credit scores. A low credit utilization on each account and overall demonstrates that you can responsibly use credit.
  5. Did you know your credit score impacts what you’ll pay not only on mortgages, auto loans and credit cards, but also your insurance premiums? The fact is that it could cost you over $200k in interest, expenses and fees over the course of your lifetime if you have less than excellent credit scores.
  6. Are you aware that over 50% of employers use credit scores as a factor in determining who they will hire? While eight states now limit employers’ use of credit information in employment, the remaining states still allow its use.
  7. Do you know that you are entitled to one free credit report per year from Equifax, Transunion and Experian? Nearly two thirds of the population (that’s 65% or 148 million people) has not ordered a free credit report in the past year.
  8. Did you know there is a way to prohibit creditors’ ability from pulling your credit report for promotional purposes? If you don’t want to receive prescreened offers of credit and insurance, you have two choices: you can opt out of receiving them for five years or opt out permanently. To opt out for five years, call toll free 1-888-567-8688 or visit optoutprescreen.com to opt out for either five years or permanently.
  9. Do you know nearly 80% of all consumer credit reports contain inaccuracies or erroneous accounts?  In a recent FTC study one in four consumers identified errors on their reports that might affect their credit scores.
  10. Are you aware that credit reporting agencies are privately held billion dollar companies, not government agencies? A credit reporting agency (CRA) is a company that is in the business of collecting and selling information about how people handle credit. They are regulated by the Federal Trade Commission (FTC).

So how did you do? We all know knowledge is power, but it’s only powerful when it’s applied. The real test is being able to utilize what you know or learn more about what you don’t. Let these questions help you measure your credit knowledge and see where you stand.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

8 Ways the U.S. Government Can Help You Finance Your Small Business Exports

By Caron_Beesley, Contributor
Published: May 28, 2013 Updated: July 5, 2016

Export LoansLooking to expand into overseas markets?

Whether you are entering the export market, looking to upgrade your equipment or facilities in preparation for exporting, or helping your international buyers do business with you – there’s a U.S. government financing program that can help.

With two thirds of the world’s purchasing power residing outside the U.S., the SBA is acutely aware that these global consumers play an important role in the long-term success of America's small businesses, and SBA is working to help small business owners across the country grow their businesses in this global economy.

In fact, small businesses now constitute 34 percent of total export dollars, and comprise approximately 97.8 percent of all exporters. Of course, success in exporting doesn’t just lie with financing.  SBA also provides counseling and training (via U.S. Export Assistance Centers and SBA’s online Learning Center) to ensure that small businesses have the tools they need to tap into the global market. Since FY 2009, SBA has guaranteed 6,400 loans to small business exporters worth over $3.3 billion, generating over $6.3 billion in exports.

So what financing programs are available? Both SBA and the Export-Import Bank (the official export credit agency of the United States) offer flexible loan and credit programs. Here’s what you need to know:

SBA Export Loans – Financing Your Working Capital Needs, Export Transactions, and Facility Upgrades

Let’s start with the simplest and quickest loan product that the SBA offers – the SBA Export Express Program. This loan program offers eligible small businesses up to $500,000 in financing. As with all SBA financing programs, SBA doesn’t lend business the money directly. Instead, it provides a guarantee to the lending bank or institution that in turn lends your business the money – alleviating the investment risk for the bank. What this means is you will work directly with your bank to obtain your loan. Assuming everything is good with your application, loans can be approved by the SBA within 36 hours or less.

You can use these funds for any export development activity – including financing specific export orders or expanding production facilities. You can also purchase equipment, inventory or real estate and translate marketing literature into a foreign language. It’s also the only government loan that funds participation in tradeshows or trade missions.

Learn more about the program and eligibility requirements on SBA’s Export Express Loan Program page.

If you are already in a position in which you are able to generate export sales and need additional working capital to support these sales or ensure you don’t lose them, take a look at SBA’s Export Working Capital Program (EWCP). EWCP loans again are provided through banks, and fund export transactions, including labor and materials, from purchase order to collections. They can help you even out cash flow as you support longer export sales cycles. Loans are available up to $5 million and can support short-term needs such as a single contract of ongoing export sales over 12 months. Read more here.

If you need to upgrade your facilities or equipment and are adversely affected by import competition, you might be eligible for SBA’s International Trade Loan Program. It provides up to $5 million to acquire, construct, renovate, modernize, improve, or expand facilities and equipment in support of exporting. You can also use the funds to refinance an existing loan. However, they can’t be used as working capital. Read more about eligibility and the applications process.

U.S. Export-Import Bank – Financing For Your International Buyers and More

The U.S. Export-Import Bank (Ex-Im Bank) is an official U.S. government credit agency that assists businesses of all size with their export financing needs. Ex-Im Bank essentially fills gaps in trade financing and assumes credit and country risks that many commercial lenders are unable or unwilling to accept.

Like the SBA, Ex-Im bank offers a Working Capital Guarantee Program for small business exporters through lending partners with whom it has agreements. There is no limit to the loan amount (unlike SBA’s Working Capital Program, which caps out at $5 million).

Ex-Im Bank also offers financing for your international buyers, for example, if your purchasers need financing to purchase U.S. goods and services and no other financing is available or interest rates aren’t in their favor. Financing may also be available for refurbished equipment, software, certain banking and legal fees, and other in-country costs and expenses. Three programs are offered:

Other Export Financing Sources

The USDA also provides export financing to your international buyers by providing credit guarantees to foreign banks to encourage food and agricultural exports to buyers in countries where credit is necessary to maintain or increase U.S. sales, but where financing may not be available without the guarantees. Read more about USDA Export Guarantee Programs.

More Information

For more information about any of these loan programs, contact your local U.S Export Assistance Center. These offices are staffed by officials from SBA, the Export-Import Bank and other organizations that can help you find the right financing for your needs. To help with your wide exporting goals, take a look at business.usa.gov’s variety of programs and support.

Also check out this useful side-by-side comparison of U.S. government export assistance financing programs.

Compare Export Loans

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

How to Restore Your Credit After Hard Times

By Marco Carbajo, Guest Blogger
Published: May 7, 2013

Getting your financial life and credit back on track after going through tough economic times is not an impossible task by any means, but it does require an effective and proven plan.

Whether you had to file for bankruptcy; went through a foreclosure; dealt with excessive late payments, collections, judgments; a repossession; or the dreaded tax lien, the good news is there is hope in recovering and re-establishing a good credit rating.

First of all, don’t believe for a second that there’s nothing that can be done about past negative credit history — because there is. You can always work on repairing your credit reports; the Fair Credit Reporting Act protects your right to do so.

The first step to credit recovery is to establish new credit. The obvious step is to open up a secured credit card, right?

Well, not exactly.

The key is to establish at least three positive trades actively reporting on each of your reports with Equifax, Transunion and Experian. Actively reporting means you’re making regular payments; a loan that’s paid off does not count.

For example, if you’re currently making timely payments on a car note but have no other positive credit that’s active, then you should obtain two secured credit cards and use them regularly.

Keep your debt-to-credit-limit ratios on those cards at no more than 30%, and whenever possible increase your limits. The higher the limit, the better it is for you in the future when a creditor extends an unsecured credit line to you.

But before you go and open up two or three secured credit cards, you must select the right lenders, too! Did you know some of the high risk lenders offering secured cards can actually end up hurting you rather than helping you?

Think about this for a second: if you obtain a secured card from a high-risk lender, what does this tell other lenders about you?

It shows you are a high risk.

The key is to open a secured card from a mainstream lender — not a high-risk lender. Now keep in mind that opening up a few secured credit cards, making purchases and paying bills on time is a step in the right direction, but it does not address the current problem:  your credit reports.

Did you know that by law you are entitled to receive one free credit report from each of the major consumer credit agencies every 12 months? You can obtain your free reports at annualcreditreport.com.

Review your reports and start repairing your reports by either working on them yourself or hiring a reputable credit restoration company.

Remember, it does not have to take a long time to put your credit problems behind you. Once you begin establishing new positive payment history, maintain at least three actively reporting trades and begin repairing your credit reports, you can restore your good credit ratings and scores.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

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