Credit Cleanup

Credit Cleanup

My credit isn't great. How do I improve it to get money for my company? — Sandra, Cincinnati

Repair it. this may be easier than you expect, given that there are inaccuracies in 75% of all credit reports. First, pull all three of your personal credit reports from Equifax, Experian, and TransUnion. If you are already in business, pull your Dun and Bradstreet report, too. Make sure that every line on the report applies to you, and not someone else with the same name.

Then, says Gary Symington, president of San Diego credit counselor Debt-Free America, start a letter-writing campaign. Ask the credit bureaus to delete older items, such as that late payment back in college, when your roommate wouldn't cough up her share of the phone bill. Be persistent, and your score will creep up.

If you have outstanding debts, negotiate with your creditors. They have the ability to delete your history with them from the reports. If you are delinquent on a store credit card, offer to pay off your debt in full immediately if they remove their negative line from your report. (Get that agreement in writing.) And make sure to pay all current bills on time. You may be able to gain up to 60 points on your score in about 10 months. Your ideal credit score is 720 or higher.

It is possible to find financing that doesn't depend on your credit standing, says Jerry Silberman, CEO of Corporate Turnaround in Paramus, N.J. If your business has receivables, a factoring agency will lend to you against them. Factors charge about 5% of the total sum, plus 2% to 3% per month until the receivable is collected. You can also borrow against your credit-card receipts. AmeriMerchant, for example, will offer advances against your future credit-sale revenue but typically charges about 20% interest over six months.

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