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Most credit is built through the use and timely payment of your business trade line, credit card, or mortgage. These transactions get reported to the major credit bureaus, which results in the positive development of your business credit profile as well as the augmentation of your credit score. However, there are a few other things you should know about what you can do help both your business and personal credit scores.
On the business front, it should be understood that while business trade line credit is a significant component in the factoring of one’s credit score, responsibly paying one’s bills is not as heavy a weight in the determination of the credit score as profitability and longevity. Business lenders are more willing to overlook a few bookkeeping mishaps if they know that the business has long-term profit potential. They also tend to factor in some other things that you might not expect, such as whether the proprietors of the business are homeowners.
With personal credit, credit is principally built upon the timely payment of bills; however, only certain types of bills get reported to Experian, Equifax and Trans Union. This makes it very challenging for low to middle income families to get into the credit system; credit cards, mortgage and car payments count toward credit while rent, public transportation fare and retail exchanges do not. Luckily, there is now a credit reporting agency called Payment Reports Builds Credit, or PBRC. PBRC creates an excellent deal for credit building: they ask for information about the business trade like that you are engaging in, and for each reported business trade line, credit is built.
There are a number of ways to build one’s credit in either direction, it just requires a bit of study and patience. Plenty of organizations exist online that offer personal coaching, however these services are often unnecessarily expensive and don’t really provide much light on anything that can’t be discovered in books and good online resources. Robert Kiyosaki offers a wealth of valuable information about credit building and debt consolidation in his “Rich Dad, Poor Dad†series, which has become a popular resource for many of the newly financially literate.
