Your Guide to Solving Problems in Getting Credit |
|
Money is a necessary evil! Wants turn into needs the moment you have some of this "M word". Banks have relished this and showered us with numerous financing wonders to help us turn a want into a desirable need. But by doing so, they have created a category of people like us who want everything under the sun but have bad credit scoring. Here is how you can solve all your credit problems. Let us first understand what and does a credit score works and how to get a good credit score: Credit scoring models are complex - variable factors have variable effects. The best people talking about this would be your creditor. Nevertheless scoring models generally follow the following guidelines to arrive at your credit report: 1) Do you pay your bills on time? 2) What is the outstanding debt you have? 3) How long is your track record? The longer the better! 4) Have you applied for new credit recently? The lesser the better! 5) How many and what types of credit accounts do you have? More is good many are not good. Credit scoring models generally also focus on your current job or occupation. Although every financing company has its own criteria for credit scoring, it is these generalized points that credit scores are generally based on. This system was created to impartially make fast and accurate decisions on lending to a lot of people at a time. So, if you have bad credit, you will be facing problems in getting credit. But this is not a dead-end. Even if you have a low credit rating, you may well find yourself in front of your lender's credit manager for further discussion and negotiation. Now, the credit manager will be looking for the following questions answered: 1) Do you have an existing source of recurring income through an existing business? Is the income sufficient to make the loan payments? 2) If you are new at business, what ahs been your past experience in the business? Was it a profiteering one? 3) Do you own enough financial reserves and personal collateral sufficient to solve the unexpected problems and fluctuations that affect all business? I know you must be thinking if I would be having the above why would I need a loan! Well, that's where you are wrong. The credit manager is looking for a close match of the above. Remember they need to be in business too. To do so, they must lend to at least some people whose creditworthiness is less than perfect. I know you have a gut feel that you too can slip through these cracks I am pointing too. You can too qualify! The only thing you need to do is SHOW THE BANKER WHAT HE WANTS TO SEE! Become that banker's ideal customer. Banker's best bet looks like: 1) Person who has worked on a managerial level for a year or two of a successful business in the same field as the proposed business. Remember same business, different fields but good profits will not work. If you have to start this change, make sure you hire people with strong marketing background of the preferred business, to makeup for the lack of experience. 2) Person having a good location, a sound business plan, and a little capital. To conclude, remember: 1. Keep the Banker's model in use when talking to a Bank. 2. Be skeptical to counter the optimism you have achieved. 3. Be READY for questions like; what makes you think you can succeed in this business? If you are not ready to answer such questions you are in deep trouble. |
