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[H755]How Do You Get Credit

by Joseph Feross, Jos

It's one phrase you are hearing all over the news, credit repair. It seems to be the topic that everybody is talking about from newscasters to columnists to the TV commercials on freecreditreport.com. Thus you may be thinking, why the big deal. I have bad credit and I'm living ok. If things are going ok for you right now it may be hard to see why everyone is talking about it, especially if you are young.

However, and you knew it was coming, if you have low a low credit score and are taking no actions to fix the problem by at least looking into credit repair, you may be destroying your future without even knowing it. It is time to put a few big factors into perspective so that you can understand just how important good credit is.

First, if you are young or middle aged, as many people are now it may not seem like such a big deal living in your college apartment or your parents place until you get settled. Most people are going to want to move out of these locations once they meet the person they want to marry or move in with, as a bachelor pad or the parent's basement is not going to cut it. If you don't work on credit repair if yours is poor, forget it.

Almost every nice well kept apartment complex in a city or a town is going to perform a credit check on you once you feel out your leasing application. If you never make any effort towards credit repair, you will get rejected, and that means you are not going anywhere fast. Even if numerous rejections spur you into working on repairing your credit, it's a long process, and you will not be able to attain a “good” rating overnight. This scenario is going to follow you through everywhere from your car loan to a mortgage, there is no escaping it.

It's common now for people, and maybe you, to figure you can always get a loan, surely there is got to be someone out there who will loan me the money I need for at least a car. Yep, you're right, there probably will be, but they are going to be charging you interest rates that are sky high. If you blindly ignore the subject of credit repair and start taking out these loans on items such as your new car, by the time you pay off the loan, of you ever do that, you will have ended up paying more in interest than the car was worth.

Yes you heard right. Without taking note of the need for credit repair, the only loans you are going to get are going to be at 20% starting rate and higher. That means for a $1,000, you could be getting taxed interest of two hundred dollars a month. You can do the math, and it does not look good.

So, if you are now a convert, realize that there is no better time than today to start looking into credit repair. Really, if you want to live the life that you have dreamed of, and always expected to be possible, you have to start getting that score up now.

Most businesses in today's marketplace are in the unenviable position of having to provide credit to their customers. This is especially true if you own a small business that sells to large businesses. Your customers due to their size and buying ability can put the squeeze on you just about anytime they want. So you end up extending them credit. Maybe you give them thirty days to pay you. But I bet they take sixty days or longer to actually get you a check. This situation can put a lot of pressure on your companies finances.

To help alleviate the problem you need to ask your suppliers for lines of credit too. You can't afford to be paying for supplies and materials up front when you don't get paid up front also. An added benefit of this additional credit is that it's usually interest free. You do have to keep in mind that some companies can penalize you a small percentage for paying late but many do not and some will even offer a discount for paying early.

You'll find that supplier credit lines are integral to helping improve your cash flow. And as your business grows your suppliers will be able to develop a deeper relationship with you. An additional benefit is that your bank will feel more secure knowing you have those lines of credit. Because if that credit is available to you then you're less reliant on the bank when money is tight. To the bank this is a good thing.

So how do you go about setting up such lines of credit? We ask of course. If you do business with other small businesses then all you probably have to do is ask for a credit line. If you've already established a solid relationship with your supplier then they'll probably be more willing to extend credit. Basically a hand shake and a quick letter of credit that you can show to your bank later if need be. I really do suggest you make sure to get a letter of credit for your records even if your supplier never had you fill out a credit application with them.

Most of your suppliers will provide you with some sort of basic credit application. If they've got a good relationship with you this will still only be a formality. I do suggest being proactive by putting together a credit reference sheet. It should have information like the legal name of the business, your employer identification number, business address and phone numbers, plus your best credit references on it. Many businesses will accept this instead of having to fill out a credit application as it contains most of the information they are seeking anyway.

If you are applying for credit with a large company then the application process is going to be more thorough. Make sure your credit references are good and you might want to consider letting them know that you've used them as references. Larger companies want your business too but are more wary when extending credit to small companies even if you have a history with them. Even if you have done alot of business with them they realize that you had to pay up front to get what you needed. Their question becomes how good are you at paying when they've already given you what you needed?

Bigger companies will usually take longer to do their credit checks since they have the resources to thoroughly check into your credit. And they don't just check into your companies history either. They will usually check into your credit as well. Especially if your company is still young. Which makes it a good idea from a business standpoint to know your credit score. You can of course get your score through companies such as Equifax, Transunion, and Experian. They'll use these companies and probably get a Dunn & Bradstreet report to check out your company.

If you do ask for credit from your suppliers you need to remember that while this is a way to help your cash flow it can also come back to bite you if you don't pay. Your suppliers can cut you off. And while this is a chance for you to grow your relationship with your supplier many people abuse it instead. You need to pay them on time and if for some reason that's not possible you need to tell them when it will be. The key to any good relationship is communication.

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Both Joseph Feross & Cash Miller are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Joseph Feross has sinced written about articles on various topics from Credit Repair Companies, Home Improvement and Free Credit Report Score. Joseph FeRoss is a leading expert in and provide great. Joseph Feross's top article generates over 135000 views. to your Favourites.

Cash Miller has sinced written about articles on various topics from Advertising Guide, Business Loans and Cars. Cash Miller is an experienced entrepreneur and speaker who has spent over a decade as a small business owner. His years of experience in small business covers such topics as planning, management, marketing, human resources, ecommerce, and taxation. If you. Cash Miller's top article generates over 14800 views. to your Favourites.