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Building Your Credit from No Credit or Bad Credit

Jul 26, 2008
For those who want to open a business but is apprehensive about their credit scores should not dismay. Fortunately, there are ways to break into building your credit score, even if you have no history or bad credit history. The secret is to start small and stay responsible.

It is imperative that you settle your business credit card with bad or fair credit. If you have many debts or have recently gone through bankruptcy, it can be tasking to keep track of how much you owe and to whom you have a loan from.

Once you get your credit report, evaluate it carefully. If you find any debts you have not paid off yet, pay them off right away. If you find any inaccuracies or mistakes on the lenders part, dispute them right away.

It is always the right thing to do to first make sure you keep a record of all your correspondences with the company. If you are writing letters, print off two copies of each and date them. If you are calling on the telephone, be sure to get the name of each representative you speak with and keep a log of all the calls you make.

If you find any discrepancy in your credit report, notify the credit agency that reported the issue that there is an inaccuracy. Write a letter to each credit agency notifying them of the inaccuracy and let them know that you are disputing it.

Then contact the business that reported the false claim. Call them on the phone at first and let them know you will be mailing them a letter as well. If possible, ask if there is an appropriate department to address your letter. Also, let them know that you have already contacted the credit reporting bureaus about the matter.

Once the matters are all resolved, get a hold of each credit agency again and make sure they include a record of the dispute and the inaccuracies resolution on all of your future credit reports. This lets lenders know that you have addressed all issues that appear on your credit report.

Because of your business credit card with bad or fair credit, you may want to restart your business with a secured credit card that is issued by a bank or credit union and has a credit line that acts as your collateral for your loan in case you fail to pay. This reduces the risk for the lender and can get you better terms on your loan.

If you are just starting out or already have questionable credit, a secured credit card is a better way to go. Secured credit cards ensure that you always have enough money to cover your debts, which means less liability both for you and your credit card company, especially when you have had a business credit card with bad or fair credit.

Practice responsible borrowing habits
  • Pay off the entire balance each month. This will keep interest from building up.
  • Always pay on time. Just one late fee can be a blemish on your credit report that can take a long time to go away.
  • Don't spend what you don't have. Forget about cash advances, super checks, or keeping a balance over a long period of time. This leads to debt, debt, debt and interest.
  • Stick with one credit card Company. The longer you keep an account in good standing, the better it will look on your report.
  • Keep an eye on your statements. Report any unauthorized activity or errors immediately.
  • Negotiate better terms once you have stayed in good standing for about 2 years. Let your credit card company know that you are a responsible customer and deserve better rates.
About the Author
Shyr Miles is the author of Building Your Credit from No Credit or Bad Credit visit http://www.bizcreditcards.org.
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