Personal Credit and Business Credit

credit
Personal Credit

Credit is everywhere in our lives, and without it things can get pretty difficult to function on a daily basis. People tend to assume that credit is credit and when it comes to business there is no difference. This is completely false, and you must be on top of your personal credit, and if you have a business, establish business credit completely separate from your personal credit. Personal credit is for exactly what it implies, your personal things, like a house, a car, major purchases, etc. Mortgages, car loans, school loans, store cards and credit cards usually make up a personal credit file. This credit file is established when you open a bank account and/or request credit from a company (credit, auto, bank, store). This credit file will be with Equifax, Experian and Transunion, the three major credit reporting agencies. These agencies will keep track of every time you apply for credit, how many companies grant you credit, how well you pay your credit obligations, where you live, where you work and if relevant, who you marry. These are the things that are relevant to a personal credit file. None of the items in this file should be for a business you own/run. Your personal credit file should never be used for your business. You must establish a separate business credit file for each business you own/run.

Business Credit

A business credit file is something that every business owner should have completely separate from their personal credit file. When you apply for an Employer Identification Number (EIN) or more commonly known as the business tax identification number, you register your business with the IRS for tax purposes. This EIN will be used to pay the business taxes, opening a bank account for the business and apply for credit for the business. Unlike a personal credit file that is established with one’s Social Security Number, the EIN alone does not establish the business credit file. You as the business owner/manager must take the extra step and also apply for a DUNS number from the Duns & Bradstreet company. This DUNS number works in conjunction with the business EIN number and then a credit file for the business is established. A business credit score is called a Paydex score, which like personal credit files, is keeps track of the credit obligations, and the payment history of the business. Once you establish a few credit files with various companies, your business credit file will be available and you can apply for loans and other major purchases under the business, and never having to use your personal credit.

Intermingling

 Sometimes, personal and business credit intermingle, but you should always strive to keep them completely separate from one another. Keeping them separate from the beginning will ensure you keep them distinct from one another. If you use your personal credit to establish the business, try to make it separate as soon as possible. I know that sometimes the type of business you have doesn’t require the need for credit and you will use your personal credit to open up shop and keep it running, but the sooner you separate yourself from the business, the easier it will be to keep your personal and business funds from intermingling. The intermingling of funds and lack of business records keeping are the major downfalls for many start-up businesses. Once you intermingle funds/credit, it becomes easy to continue doing the practice, making it difficult to separate the two down the line. If you need assistance is establishing your business credit, repairing your credit, or just want guidance on your future credit/business endeavors, feel free to contact me for a consultation.

Aren’t Credit Bureaus Supposed to Protect Us…

I have worked as a paralegal in many aspects of the legal field for over 10 years, and working on various bankruptcy cases I’ve learned many things involving the credit industry. Many people are under the assumption that going to an attorney for their credit issues will protect their rights, but this is wrong. Attorneys are trained in bankruptcy law and collection practices, but very few learn the ins and outs of the rights consumers have and how they can be protected prior to any court intervention.

You should always work on your credit and have errors corrected and/or removed before filing for bankruptcy for two main reasons. First, some attorneys charge by the number of accounts they will be “discharging” for you. Second, once you file for bankruptcy, you have automatically verified all your debts, whether they can be legally collected on or not. Unless you verify your accounts, especially collection accounts, the credit bureaus are not going to correct or delete them all together. Many attorneys are trying to process as many bankruptcies as possible, and will not bother to verify the accounts before filing. They will go by the accounts listed on the credit report and process the case accordingly.

Credit repair does not have to be done by an attorney, but there are several attorneys that will go the extra mile for a client before advising them to go down the bankruptcy route. Using a reputable credit consultant is advisable but finding one with integrity might be difficult. We have been conditioned to believe credit repair is not legal and many engage in shady practices. A reputable credit consultant will give you a contract of services, they will not guarantee results, has a cancellation clause in the contract and does not conduct illegal practices like purchasing trade lines for your report.

Credit bureaus and creditors pay large sums to advertise that credit repair is illegal, but don’t believe the hype. Credit repair is LEGAL and regulated under the 1996 Credit Repair Organizations Act (15 U.S.C. §§ 1679-1679j), and these organizations/companies use the 1970 Fair Credit Reporting Act (15 USC § 1681 et seq) to repair a client’s credit file. These laws have been around for decades, but big bucks are paid to have you think credit repair is illegal and that nothing but time can fix your credit.

If you are interested in saving money by working on your credit file, correcting errors and improving your credit scores, contact me and schedule an appointment today.

Just Because its Bigger, Doesn’t Mean its Better

big not betterCredit repair companies are looked upon with a skeptical eye as many have been led to believe that credit repair is illegal and only time can repair your credit. This is not true and the Fair Credit Reporting Act gives you the right to challenge incorrect information in your credit reports. Why wouldn’t you challenge information in your credit reports that are reflecting negatively on your credit worthiness. There are many credit repair companies out there, but not all provide the same level of service.

Not too long ago, someone reached out to me with questions about credit repair. I was shocked to find out that he had signed up with a large, and very well-known repair company, over a month had passed yet he had not heard a thing from them. Our turnaround time is less than a week, and we get started immediately on your analysis and disputes. The credit repair process takes time when done legally; hence, the faster you begin the process, the quicker the results.

Also, credit repair is not only disputing negative items in your credit reports, establishing good credit at the same time is essential for the process to work. Knowing when and how to establish new and good credit history is something Martinez Consulting Services teaches, as well as other credit habits that should be implemented in order to achieve financial goals and independence. Learning how to use credit correctly will help raise your scores and credit worthiness in the eyes of creditors and lenders, placing you in a position where you can purchase your dream home, dream car, send your kids to the college of their choice or take that dream vacation without leaving you destitute. The possibilities are endless if you take control of your credit and finances today. To request information or to get started, please send your contact information with preferred method and time of contact to Lmartinez964@optimum.net.

Other Services we Offer:

Notary Services

  • Mobile Notary
  • Apostille Services
  • Signing Agent Services

Business Services

  • Business Formation
  • Licensing/Permit Application
  • Consulting Services
  • Credit Services

Individual Services

  • Document Preparation
  • Typing Services
  • Credit Repair/Analysis
  • Virtual Bankruptcy Assistant (For attorneys only)

The Time is Now – Repair Your Credit Today

FullSizeRenderWelcome to a new year. A time to start over and a time to fix our past errors. One of the biggest mistakes people often make is not taking care of their credit. Whether noticeable or not, credit affects our day to day lives, regardless of using the credit or not. Knowing how to use credit correctly can open many doors, like:

  • Better rates on mortgages and refinances
  • No or low interest rates on credit cards
  • Lower rates on car loans
  • Better insurance rates, whether life, auto, etc.
  • Positive results on job screenings that perform credit checks
  • Better housing options

Having good credit is important and you need to stay on top of it. Under the Fair Credit Reporting Act (FCRA), you have the right to dispute all inaccurate, erroneous and obsolete information. Information being reported that is wrong can be legally removed from your credit reports. This goes for anything and everything, including but not limited to:

  • Foreclosures
  • Student loans
  • Late payments
  • Bankruptcies
  • Repossessions
  • Child support
  • Charge offs
  • Public records
  • Collections
  • Judgements
  • Tax liens

Martinez Consulting Services will help repair your credit and teach you the necessary tools to help you achieve your credit goals, whether it’s to be debt free, buy a house, buy a car or take that dream vacation. The possibilities are endless if you take control of your credit and finances today. To request information or to get started, please send your contact information with preferred method and time of contact to Lmartinez964@optimum.net.


 

Other Services we Offer:

Notary Services

  • Mobile Notary
  • Apostille Services
  • Signing Agent Services

Business Services

  • Business Formation
  • Licensing/Permit Application
  • Consulting Services
  • Credit Services

Individual Services

  • Document Preparation
  • Typing Services
  • Credit Repair/Analysis
  • Translation Services (Spanish/English)
  • Fingerprinting

Lorraine Martinez
Mobile Notary, Business and Certified Credit Consultant
Martinez Consulting Services Corp.
P.O. Box 506
Bronx New York 10459
347-947-0084 Tel/Text
800-957-4405 Fax
Lmartinez964@optimum.net

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