A Brief Guide to Obtaining a Credit Score that will Help Your Business

Only about one-percent of Americans have FICO scores of 850, or perfect credit.  There is little luck involved in obtaining a perfect credit score.  Having a perfect credit score can open many doors for you.

Your credit score can make financing a home easier, or your credit score can make opening your dream business a reality.  Basically, obtaining a perfect (or near perfect) credit score can change your life, from better options for business banking to better options when taking out business loans.  The good news is that the path to getting a phenomenal credit score is not a mystery.

A study of individuals with perfect credit scores showed a strong correlation between FICO scores of 850 and a number of factors.

Some factors that impact credit scores are arguably common sense, whereas others might seem less intuitive. The variables that often equate to a perfect credit score are as follows:

• Ownership of between four and six credit cards
• Ownership of at least one mortgage or auto loan in good standing
• Ownership of a few accounts with a lengthy history of positive use; usually accounts that have been in use for about 20 years
• A record of about 30 years of positive credit use
• A history of few credit inquiries
• A history with zero collections or bankruptcies
• Ownership of credit accounts that have debt levels of less than 35% of their overall credit limits

To sum it up, take out a healthy line of credit, pay your bills, and resist the urge to check your credit score regularly.

How to Improve Your Credit Starting Today

Obtaining a near-perfect credit score takes time.  It is best to start improving your FICO score ASAP by changing bad habits and adding necessary lines of credit to your existing accounts.   Having healthy credit for life can help you save money and have more opportunities for success.  Many people find business banking more challenging than only managing personal finances.  It is important to think about finances and building credit in a methodical way.  As detailed above, there is almost no way to get perfect credit in the next 30 days.  However, you can start building a healthy FICO score right away.

1. See What Your Current Credit Report Says and Fix Misunderstandings

Almost everyone with a line of credit has fallen victim to credit card fraud at some point in time.  It is important to make sure your credit record is clean of fraudulent charges that were successfully disputed a few years back.  Spend a short afternoon clearing up any misunderstandings and dated information (e.g. old addresses).

2. Fix Bad Habits NOW

Find ways to ensure that you will not make late payments or default on loans again.  People make mistakes with credit cards, and it is important to start practicing better habits today.  Find systems for paying bills on time that work for you.

3. Do NOT Run Out of Cash

Loans are not cash.  Student loans are not cash.  Credit cards are not cash.  Only borrow sums that you can easily repay.

Be Patient and See Good Credit Rewards

Boosting your credit score is possible.  However, it takes time, good financial practices, and self-discipline.

Related Reading:

What You Should Know About Free Credit Scores – Business Insider

Subprime Borrowers With Best Credit Score Denied Help – Bloomberg