Anyone who has had to deal with disputes, inaccuracies and others items on their credit report know that it is not an exact science. Closely monitoring your credit report is a must and trying to nip any problem in the bud is very important. Logic does not seem to always work in figuring out what just happened or what is most likely to happen.

Personally I treat everything with a healthy dose of suspicion. Case in point, if I call up a credit company and request removal of a 30 day late. My argument could be that it was a mistake and otherwise I have a very good payment record with them – a good will approach. Say as a result they promise to remove the late payment. First I will ask for a confirmation number and if they do not have one I will make double sure that the conversation was noted (in their system) as far as removing the late.  After that I will watch my report like a hawk, waiting for the late to come off and follow up if necessary. Usually it takes 1 to 2 months to remove. This is just a simple example …

Below I have highlighted a number of situations that might surprise you as far as personal credit is concerned. They show that personal credit is not an exact science and that experience, knowledge and caution count for a lot.

1    Try your best to get your debt interest rate as low as possible. Initially you might accept almost any rate but gradually you want to lower the rate. Other than the obvious reason of paying more, if you use high interest credit sources your credit score will dip.

2    Do not close your oldest credit card (no matter how bad the terms of the debt) if you do not have a long credit history. The oldest will show ‘age’.

3   Paying of a charge-off account will not really increase your credit score. Just the presence of a charge off account depresses your credit score irrespective of its statues. Hence do not be surprised if you spend money to pay off a charge off account and the score does not change.

4   If a judgment or a collection account is paid off (or settled by a partial payment agreement) do not automatically assume that the original creditor will also indicate that the account was “Paid” or “settled” etc. The credit bureaus do not make these into one account. So the original delinquent debt will most likely remain and remain for the length of the SOL (Statue of limitations, see my other article, click here) if nothing is done about it.

Having said that when an underwriter is involved, like in certain loans or mortgages, he/she will look at the report carefully and will see that the two accounts are the same. They can see that the account(s) have been settled.  Problem is that two ‘bad’ accounts are more likely to depress your credit score and as a result your case (loan/mortgage request, credit report etc) might be rejected on the bases of a low credit score. Meaning an underwriter might not even get a chance to see your report . A higher credit score is always better.

At the very  least, it is best to get a “Delete account” letter AND a “debt settled” or “paid” letters as you negotiate the settlement (see previous article, click here).   Quite simply make it clear that you will not move forward with any negotiation unless they agree to provide those two letters on payment of any settlement amount.
5  Paying off installment loans or student loans will not necessarily increase your credit score, all else being equal. In fact most likely your score will not change at all. It seems that only revolving credit account repayments increases credit score.

6  Closing unused credit card accounts seems to almost always lower credit scores. Plus if you can, try leaving some balance on your credit cards, even if little, when the creditor is making money off you, the creditor is happy.
Here are some more useful tips:

1  Remember you can dispute anything on your credit report. Anything. They have 30 days (30-40 but ask the specific company) to answer and if you send in another request before the 30 days are up the time is just extended. It is better to wait for the allotted 30 days to pass before placing another request.

2   Sending all letters certified mail? Certified mail requires signatures so if you send everything using certified mail some of the items might not go through especially if mailed to the original creditors. Certified mail is only really needs to be done for debt validation with a collection agency.

3  Credit reporting agencies love to ask you for your bankruptcy papers if you ever mention that you are planning to file bankruptcy. Never mention that you want to fill bankruptcy and which accounts you would include in the bankruptcy.  More of this in later articles.


For more free Personal credit articles click here and go to the bottom of the page for Personal credit articles

Personally I think you should be more concerned with the bigger picture but understanding payment timing will give you a better understanding of the credit reporting process.

Using your card every month and paying off your credit every month will not necessarily show a zero balance every month.

Credit card companies report balances owed on the date they generate your monthly statement. Simply paying off the balance a couple of days before the statement generating date will do the trick. Do realize that the statement reporting date is separate from the monthly due date. I think that is where the confusion takes place. Call up your creditor and ask them what the date the statement is generated every month. You should simply pay the balance a couple of days before that date. So if the due date is 1st of the month and the statement generating date is the 15th simply pay off the balance on the, say, 11th. That way you can use the card and still show a zero balance, best of both worlds!

This can also be used for business credit vendor reporting. You might want to “reverse” the payments. Creditors looking at your business reports usually want to see a higher balance with certain vendors, which will show that the company has enough activity with vendors (among other things). The creditors also like to see repeat business. Now, if you have a minimum amounts to spend, timing your payments can report the maximum amount. For example, you can get credit from Seton. Seton is usually very easy to get credit from (credit to purchase only from them). Now Seton has a net 10 days credit which means that you have 10 days to pay. Seton like most others report to Dun & Bradstreet at the end of the month. You can buy something on like the 25th, have it reflected on your business credit report on the 1st (end of month – start of next month) and pay it off by the 5th (net 10 days) of the month. That way you have it reflected on D&B and still paid within the allotted credit time, net 10 days.

These are the little things that can give you optimum use of your credit and give you better control over credit reporting. You would be surprised how understanding this can help you in polishing out the credit repairing/building process.


Consumers these days instinctively have their “hype antennas” up. But that “Get $90K credit…..90 days..”  headlines still seems to work for selling business credit solutions.

Lets start with the obvious. The changing economy has made lending very conservative. Lenders want your social security number when applying for business credit. That basically means that 99 times out of 100 they will look at your personal credit as well.

Notice that I said 99 times out of 100 and not 100 times out of 100. This will come as a shock to many semi- experts BUT there are still ways to get business credit even if your personal credit is not very good.  It just takes a little longer and the approach is different . It entails establishing a business file that can “stand on its own two feet”.

So can you get 90K (OR EVEN 60K)  of cash credit in 90 days ?  It is possible but highly improbable. Individual circumstances vary, their existing personal and business credit play a role. Existing business set up and recent activities play a role. Too many factors are involved and just like any art there is no one perfect answer.

Personally I think claims like the “90K in 90 days” give credit/finance experts a bad name. Too many quick buck artists with fancy websites. Having said that I do believe that if you have a good sense of the business credit (or personal credit) world, you can get very creative,  so much so that to the “onlooker” it might seem like magic.

To me it is like a delicate piece of puzzle put together and that of course can not be taught in “10 easy steps”. I also believe that our country is build on the finance “game”.  To me there is nothing quite like having massive funds available for investment opportunities. Observe the workings of large corporations and you will get an idea. Never under estimate the power of leverage. Read the first article that I wrote to get a basic idea.



I will divide the potential negatives on a credit into 4 different types.

1        30 days lates, 60 day lates….etc

2        Collection or charged off accounts

3        Third party collection accounts

4        Judgments etc

Today I will talk about late payments. Let us start with the 30 day lates.

The basic idea is to request the creditor to remove the 30 day late, almost in an apologetic tone. “I made a mistake and it will not happen again”……sort of thing.  Most likely a misinformed rep will tell you that they have to report for 7 years or so. Strictly speaking that is NOT true.  So if it does not work over the phone the first time around, call again and write again.

Ideally, if you have had an account with the company for the past couple of years and this is just a random late, it is most likely to be removed. The further away you are from that scenario the harder it will be to get the late removed. Please understand, and this point is a basic credit repair lesson, if it does not work ones try again after some time. Not everything will work, all the time. In the case of a 30 day late, write a nice letter explaining to them that it was a minor mistake and it will not happen again. Yes, a NICE letter might do the work. Companies want to keep a good customer happy. In the next couple of weeks  I might post some sample letters.

60 to 120 day late:

Again if you had an account that was basically paid up completely with some 60-120 day lates than it would be relatively easy to remove the lates. The further away you are from this scenario the harder it will get but again that should not deter you from trying. Remember the opportunity cost of your time. At the end only you know if it is worth pursuing. Having said that, I have seen some great cases of credit repair. I am convinced that you should try to remove all of the negatives from your credit.

In the case of 60 day lates your communication (letters or phone conversation) should be with an air of cool assurance. You should inquire about the nature of the lates. The company should feel that you know what you are talking about and would be willing to take things further if the need arises. Hence you might want to reference FCBA. Remember the account is NOT yet in collections and so you can not refer to FDCPA (review my previous articles for definitions of FCBA etc).  If you are on the phone with them have all your information on a piece of paper infront of you, giving them an  impression that you are some one that is prepared.

The way I see it, if you get the gist of personal credit repair you can basically make your own credit repair plan.

One very important point is that you only inquire about the details of the  lates. At no point do you agree or disagree with the 60-120 lates. That is one of the differences of this and the “30 day late” removal approach.

It is very difficult for me to go into minor details in an article format but that is basically what the approach is about. Do not come across as apologetic in your inquiry of a “60-120 day late” and of course save any and all correspondence. I might post some sample letters on the website and that might give you a better understanding.

Next article….collection accounts.

Credit repair made easy. I have been requested to write some on personal credit repair so my next few articles will be on that topic. I will come back to business credit after a while. In the mean time you are always welcome to ask me a question on business credit.

All I can give you is a solid foundation in personal credit repair. These articles will not go into detail. I would like to think that it will give you a better understanding of the credit repair concept. At the end you will be able to make your own credit repair plan.

FCRA: Fair Credit Rating agency. ALL of the information that is reported on your credit is regulated by FCRA.

FDCPA: Federal Debt collection practice Act regulates all collection activities.

FCBA: Fair Credit Billings Act: Its purpose is to protect consumers from unfair collection Practices. Hence you will refer to them when dealing with collection agencies.

If you notice there is a sort of over lap since FCRA regulates ALL the information that is reported on your credit. For the real technical ones among you , you might want to read copies of each of these acts !

To keep it simple, if you want to inquire about the authenticity of collection accounts, in anyway, you would refer to (or reference) FCRA. If any company is crossing the line in their collection efforts , you would refer to the FDCPA. Of course it can get as complicated as you want it to get but for now lets keep it simple.

A crash course in personal credit repair:

This might make many of you yawn but I feel it is good to lay a solid foundation first. Your credit score is dependent on certain factors. These factors effect your score in different degrees:

35% of the score is influenced by the Account history

30% – usage (the less the usage the better it is)

15% – length of credit.

10% – New inquires

10% – Variety (different types of credit).

The important thing is to realize the relative ratios and not the exact figures.

So, lets say, if your account history is “bad” (again a relative term) it will have a 35% effect on your credit score and so on. Everything on your credit basically falls within one or more of the above factors. Any steps that you carry out would be geared towards influencing one or more of the above criterions.

Personally I think we should all invest in some kind of credit monitoring service. Truecredit is one such service. What you have to realize is that the credit score provided by most of these services is not a FICO score. Most of the times they have their our methods to calculate the score. The main purpose of such a service would be to monitor changes in your report in a more or less timely manner. Removed inquires, paying off debt, fraud alerts ALL will (or should) show up on your credit a little after you make these changes. That will tell you if your credit improving actions are taking effect.

I will give you an example of an old credit improving technique. Apply for a secured loan. Go to (or call) a bank and ask them if they offer secured loans and what is the minimum amount that they will accept, you do not want a bank that will only offer a $2000 (or more) worth of secured credit, unless your budget allows it. Now instead of taking 6 months to pay off the loan, pay it all off in like 6 – 8 weeks. Than apply for another secured loan, try a different bank with slightly different terms (loan amount, length of loan etc). Again pay if off in 6 – 8 weeks. Do this 3 – 4 times and your score will shoot up more than if you apply for one secured loan and pay it off in 6 months.

Let us analyze this example: The technique will basically effect the usage (30% of the credit score) especially if it is a larger loan. It will also effect history (35% of the score) and since we are getting a number of loans it will effect variety (10% of the score). So overall, after all the loans are paid off your credit score will increase.

Needless to say that UCC filings have a similar effect. They “add” variety, account history and CAN even add length of credit . Plus you can file more than one UCC even on your personal credit. As long as you do not over do it. If your total previous credit history is like $7000.00 and a UCC appears on your credit that is for $100,000.00, it will look out of place to say the least. Anyway, using many of these techniques initially your score will go down but as the traitlines come off, the score shoots up.

Next article I will talk about how to remove negatives from your credit report. The negatives include late payments, collection accounts etc (that is “account history”).

By now you should have decided on a low risk SIC code business. Your business should have a business address and a land-line phone. I am assuming that you know how to get your business incorporated.  You do not need a lawyer to incorporate a business and I will not go into detail in this article. I am sure you can search the many services on the web that help incorporate a business if you do not want to do it yourself. These services are still cheaper than using a lawyer. For our long-term business credit plans a C-corp is the best structure.

When you do receive your EIN number and Tax ID number get a corporate kit for the business. You can get a corporate kit from places like Offiice-depot. A corporate kit is a subject in itself but for now do understand that a business has to keep records of where it spends its money, the employees, policy etc. I will expand on this aspect in later articles but for now make sure you get your corporate kit.

A business land-line and a BUSINESS e-mail is also very important.

Now here is another tip that will show you what sets me (and my team) apart from the rest:  Get some business stationery; letter heads, business cards etc.  Why do you think business stationary is  important ? Every time you deal with vendors, banks (etc)  you should use your business stationary.  For example,  Dun and Bradstreet has been in business for a long time and basically knows what to look out for when rating a business.  When your business faxes something over to D&B and it is on plain paper it might not “red flag” you BUT it will be one more thing that cautions them. In this economy you need every advantage, nothing should be left to chance.  Remember very few are getting financing these days  and hence the ones that are getting any have a tremendous advantage. You should have everything in order and I can assure you that banks will stand in line to give you financing. Remember our country is build on credit – banks have to lend to survive.

By now I am sure you realize that business credit is not just a matter of getting a Paydex score by apply to some vendors.  However, I can assure you that it can be done by most people.

Your mind set should be one of setting up a business like a business is set up.


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