You Should Know – The Top 3 Export Credit Financing Mistakes Businesses Need To Avoid

Any type of business requires funds to sustain their day-to-day operations. Import and export companies face the same situation as well. Fortunately, there are various export credit financing solutions that importing and exporting businesses can rely on. With these solutions, these businesses will have fewer worries regarding the funds they will need for their operations.

To be successful in acquiring and getting the most out of these export credit financing solutions, it is important to avoid certain mistakes. These top 3 mistakes you have to avoid are:

1. Failing to fully understand your credit utilization ratio. Banks and financial institutions may examine the existing debts you have on your business’ books to see if your current and projected cash flow can handle taking on additional debt. You can avoid getting a rejection from these establishments by learning beforehand how to calculate both your personal and business’s credit utilization ratios (the amount you owe compared to your credit limit) before applying for a new loan or any type of financing option. Financial experts say that a good rule of thumb is to keep your utilization rate below 30 percent for both overall and for each revolving credit line.

2. Not calculating your annual percentage or APR. There are many numbers and fees involved with any financing offer. Interest percentage rate, daily debits, and service fees are just some of these numbers. You can understand and make sense of all these numbers by first calculating the APR of your offer before signing any contract. The APR pertains to the true cost per year of borrowing money and is usually higher than the advertised interest rate. It takes into account the interest rate and compounding effects as well as any additional fees and charges. As such, it is essential to ask about the APR when looking at loan offers. If you can, learn how to calculate it yourself. If a bank or financial institution won’t give you the information you need to calculate the APR, they may not be looking out for your best interests and it would be best to consider another company.

3. Not asking for feedback from banks or financial institutions that rejected your application. Lastly, if one of your financing applications is rejected, don’t give up easily. Ask the institution for feedback and make an effort to learn from the process. Business financial consultants say you should politely ask for an explanation of the lender’s decision to see what and how you can improve for your next attempt.

You Have To Fix It – Life Is Tough When Your Credit Score Stinks

Whether it was a foreclosure, short sale, deed-in-lieu of foreclosure, a job loss or just plain irresponsibility, there are some steps you can take to get your credit score back into the range where it is attractive to mortgage lenders and you can finally buy that house.

Where does my credit score come from?

Credit scores range from 300 (the worst) to 850. Although a score of 700 will get you lower rates and more credit opportunities than lower scores, 760 and above is considered prime.

If you’ve ever ordered your credit report you did so from one or all of what are commonly known as “the big three” credit reporting agencies: Experian, Trans-Union and Equi-fax.

These agencies compile massive amounts of financial information obtained from companies from which Americans have obtained credit in the past. From this, they determine each person’s payment history, the length of the person’s credit history, the various types of credit he or she has and the amount of credit debt held.

When the big three agencies turn their information over to Fair Isaac Corporation (F.I.C.O.) or, in some cases, Vantage, it’s fed into a complicated formula and out pops a three-digit number that pretty much rules your financial life. Thankfully, your credit score adjusts, according to how risky you appear.

Pay on time

The best way to repair your credit score is by paying your bills on time, every month. Yes, it sounds simple and it is the responsible thing to do, but it’s also one of the quickest ways to pump your score into a more acceptable range. Don’t believe us? According to a study conducted by Experian,100 percent of super prime consumers and 97 percent of those with prime credit have no late payments on their credit reports.

Furthermore, The Raleigh Area Development Authority says that a person with a 707 credit score can raise it 20 points, just by paying bills on time for one month.

Manage the plastic

credit score

Your use of credit cards may be the culprit when your score is at rock bottom.

First, credit scoring agencies look at the age of your credit. New credit, such as opening new credit card or department store accounts, makes them leery. Just what will you do with all this new-found credit? Since they don’t know, you become a higher credit risk and take a 10 point ding on your score.

High balances make you appear risky as well. If your cards are maxed out you may lose up to 70 points on your credit score.

Don’t close your credit card accounts, just pay them on time. Consumers with no credit cards or installment loans look risky (it’s that fear of the unknown again) and tend to be penalized with lower scores. Besides, closed accounts still show up on your credit reports and may still affect your score.

If you have the money in your budget, another quick way to raise your score is to pay down high credit card balances. Try doubling your payments for a few months or at least pay a payment and a half.

If you build it, you can buy it

Many Americans didn’t do anything to deserve a low score other than to have never used credit. To credit scoring agencies, these people are, again, unknown entities. How they will use credit when they receive it is a mystery and therefore makes them a credit risk in the eyes of the agencies.

Unlike the folks that need to slow down on their credit card usage, you need to obtain a card, use it and pay the balance on time. Ensure that you obtain a card from an institution that will report your responsible use of credit.

To make it easy on you, we’ve compiled this handy, fix-your-credit checklist:

– Order your credit reports from each of the big three agencies to determine where you stand

– Dispute any errors you find on your credit report. Some shady credit counseling companies may suggest you dispute everything on the reports, which may do way more harm than good. The Federal Trade Commission offers advice on how to file disputes on its website.

– Pay all your bills on time, every month

– Pay down your credit card balances. If you can only afford to pay one at a time, pay department store cards first, if you have them, otherwise, pay off the one with the highest balance first. Aim to get the balances within 30 percent of your credit limit.

– Use old credit cards that you haven’t used lately to keep their histories active. Remember, old credit is worth more than new credit when it comes to your score.

– Obtain a secured credit card if you have no credit history. Use the card for small purchases and pay the balance on or before the due date.

– Consider obtaining a small loan if your credit report lacks an installment loan history. Ensure that the lender reports to all three agencies.

– Ask creditors to re-age your accounts. This might be challenging but if even one creditor agrees to do so your score may improve dramatically.

Ask the credit card companies to increase your credit limit

Erika Bentley

Keeping Real Estate Simple

Top 5 Smart Tips for Improving Your Credit

Troubling financial situations happen in life to a host of individuals and families. The key to solving the crisis is having an action plan that you can follow to resolve your situation. On top of that, don’t become discouraged. With patience and determination, you can improve your credit score and get on the road to financial health.

Consider the following 5 Tips for improving your credit:

Debt Merging: This May Be the Right Path for You

What is Debt Merging? This type of loan is a single loan that enables you to repay your debts to a number of or all of your creditors at once. This type of loan usually comes from a financial institution.

Consequently, you have only one outstanding loan remaining – to the financial institution. However, remember to contact a variety of financial institutions before you select this type of loan. The interest rates offered by competing financial institutions may be different.

Study Your Credit Report

The reason to do this is to determine which items you can pay. A credit report contains a history of how an individual has paid their bills and how much open credit they have. It also contains anything else that would affect a person’s creditworthiness. A credit score is a judgment about an individuals’ financial health, at a specific point in time.

Banks or other consumer agencies, which are considering a person for a loan or other financial products, will check one’s credit history. Your credit score calculated by the credit reporting agencies is available to you. However, you must pay a fee.

You may want to know your credit score if you suspect it requires improving. Additionally, you may want to know it if you’re planning to acquire a loan or other new credit in the coming years.

Work With Your Creditors

Make contact with your creditors to arrange payments to them. Many creditors will allow you to move forward with a special payment plan. Your goal is to work out a payment plan with them that you can afford. These relieve financial stress on you, while allowing you to pay down, consistently, your debt. Essentially, it’s a good solution that benefits you and the creditor.

It’s important to get all the details of the arrangement – the agreement – in writing. Remember to calculate whether you can actually make the regular payments that you’ve agreed to with the creditor(s).

Budget, Budget, Budget Your Typical Daily Expenses

Part of the process of improving your credit is saving money so you can use ‘saved money’ to pay down debt. You goal is to get out of debt sooner rather than later, while still being able to afford your debt repayment responsibilities.

Look at your household budget and cut out spending of extraneous goods and services you really don’t need. Be honest with yourself and do without where you can. You will be happy down the road when that debt load is lifted and your credit score has improved.

Consider a Financial Expert

There are many expert financial specialists available who have the experience to help you make informed financial decisions. A financial specialist such as an accountant assists people in planning and managing their financial resources. They offer information, insight, advice, tips, and more that you may not be aware of to help you get back to a healthy financial state. Use them when you feel your efforts alone may not get you the desired financial results you require.

Consider the above 5 tips for improving your credit. Stay positive and take the necessary action now to improve your financial situation. You can do it with a concerted, methodical, disciplined effort. Moreover, consider that help from a seasoned professional. Your plan of action for better financial health begins today!

Top 5 Smart Tips For A Factoring Application

Businesses monitor the cash flow demands on a regular basis. Nowadays, they use the invoice factoring, especially when they don’t want to get loans from banks. If you own a business and you want to submit a factoring application, consider the 5 tips given below before you go ahead and submit your application.

1. The Factoring Application

First of all, you need to get in touch with the factoring company so that they get to know more about your business. You can also talk to the company on the phone. The information you will provide is given below:

· The name of your company

· Business type

· Information about your valued customers

· Your contact information

The acceptance of your application depends largely upon the type of your business and customers. Most factoring companies prefer invoices owed by trusted businesses. Individual consumers are not that important in their eyes.

2. Aging Reports

In the aging report, details for the initial application are included. The report mentions the amount that the customers owe and the time they will take to make payment. Usually, customers that make payment within 30 days are considered better than those who take more time.

3. The Process of Factoring

The buying of accounts receivable at a good ratio of discount is called factoring. The factoring provider offers an upfront payment on invoices that are approved. The factor takes care of the collection process and then releases the balance as soon as the invoice is paid by the customer. The fee is deducted by the factor before the balance is released.

4. The Cost of Factoring

So, how much will the factoring cost? This is a common question. The cost depends upon the industry, customer strength and the time it takes for the payment to be received.

The pricing is also affected by the value of invoices. The rates will be better if the volume is higher.

5. The Underwriting Process

The factor is interested in your customers’ strength because they are going to buy the account receivable instead of putting together a plan. Moreover, the factor will conduct an evaluation of the creditworthiness of each customer.

Aside from this, the factor will look at the public records of the company to verify the titles. This search involves liens, judgments, corporate status, pending litigation, UCC, criminal records, back taxes and so on. It also includes other items that may affect the process of receiving payments.

On average, the process of due diligence may take 5 to 10 days on fresh accounts. As soon as the starting review process is finished, the approved customers can receive cash within 24 hours. So, the process is not as complicated as most people think and the cash can be received easily.

Factoring offers cash flow solutions for old and new businesses. And they can offer funds for expansion, growth, and expenses.

So, this was a brief introduction to the process of factoring. Hopefully, you can take the right steps now.

 

Are You Have an Credit’s? How’s Your Credit?

As a business owner you’re entitled to create for yourself a business credit profile to eventually obtain a massive amount of money in your business name alone.

But what about your personal credit? Many work from home business owners credit scores are just too low. Costing them thousands of dollars and can be easily rectified if they could learn how to raise their credit score.

So what do you have to do to raise your credit score?

Well for starters you’ll need to see what’s on the three major credit bureaus (Experian, TransUnion, Equifax) reports on you. You can obtain a free credit report from each credit reporting bureau once per year or if you were denied credit recently. If you don’t want to wait 2-3 weeks for your reports to come in the mail you could always pay the $40 fee to Experian.com and get immediate access to all of your reports.

Once you’ve acquired your credit reports, if you discover you have any negative items on them, then you’ll need to be about the business of getting those items removed, even if you were at fault for them being there.

What most people don’t know about restoring their credit is that when you have negative items on your reports, you can dispute them with either a dispute letter via the mail or online at Experian and TransUnion. Equifax won’t allow you to dispute negative items online, you’ll have to go via the snail mail route with them. There is an advantage to disputing those items online because it’s less time consuming. And besides, who wants to wait for reports to come in the mail if they don’t have to.

So when you file a dispute, the credit reporting bureau Experian, TransUnion, Equifax has to contact the creditor who reported the negative item or delinquency on your report and ask them to verify the accuracy of the account. The creditor is required by law to provide proof of the account within a 30 day time period. If they don’t, those item(s) will automatically be removed from the requesting credit bureau for failing to provide proof.

If for some reason you later check your reports and see that the negative items were not removed, then you’ll need to challenge it in writing. If you’ll consistently challenge the credit bureaus about items that don’t come off, eventually the creditor will stop responding or fail to provide proof of the account. When that happens that creditor will not respond to the credit bureau’s request within the 30-day required time-frame and the delinquency will then be removed.

Take the power into your own hands and raise your own credit score.

 

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