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| Managing Credit rating |
Consumer credit is generally talked of in negative terms. But using Personal credit wisely can have its advantages. As a business owner your business and personal finances are closely related. If your Business is in too much debt then it will affect your ability to qualify for personal credit. In turn your bad record in personal credit will have an adverse impact on your ability to generate credit for your Business.
Consumer Credit Is the use of credit for personal needs by families and individuals. You need to have a good credit rating that should be sustained and protected as it might affect your capacity to get a job or buy insurance. If you want a good rating, you must use credit with discretion; limit your borrowing to your capacity to repay, and live up to the terms of your contracts.
Credit Bureaus
The credit bureaus collect and collate credit information and make it available to business that subscribe to their service. They do not deny credit; they merely report the information they have gathered. Many credit bureaus are connected to centralized computer files that contain data about millions of individuals. From these files, a credit bureau can produce for a subscribing creditor, almost instantaneously, a report about your past and present credit activity.
Your credit bureau file contains your name, address, social security number, and your birth date. It may include information about your past and current employers, positions and incomes and whether you own or rent your home. Your credit file may also contain detailed credit information.
Credit file information is continuously updated, but old details disappear slowly. Each time you buy from a reporting store on credit or take out a loan, a credit bureau is informed of your account number and of the date, amount, terms and type of credit. As you make payments, your file is updated to show the outstanding balance, the number and the amounts of payments past due, and the frequency of 30-, 60-, or 90-day lateness. Your record may indicate the largest amount of credit you have had and the maximum limit permitted by the creditor. In addition to this, each inquiry about you as well as any record of refusal of credit may also be entered into your file. If this has happened frequently, a creditor may be wary; he will at least want to consider the reasons for the refusals. Any suits, judgments, or tax liens against you may appear as well.
Maintaining Credit
The best way to maintain your credit standing is to repay your debts on time. But there may still be complications. To protect your credit and to save your time, your money and your future credit rating, you should learn how to correct the mistakes and misunderstandings that may tangle your credit accounts. If there is a snag, first try to deal directly with the creditor. The credit laws can help you settle your complaints.
Incorrect information in your credit file
Credit bureaus are required to follow reasonable procedures to ensure that subscribing creditors report information accurately. However, mistakes do occur. Your file may contain erroneous data or records of someone with a similar name. When you notify the credit bureau that you dispute the accuracy of information, it must investigate and modify or remove inaccurate data.
Anyone turning you down for credit must send you a written rejection notice within 30 days of the decision stating the specific reasons for the rejection. They must also give you the name and address of any credit bureau that issued a report and if other information was used in making the decision, you have the right to learn about that information.
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