Understanding the Importance of Monitoring Your Credit

by Susan Carter

Have you looked at your personal and business credit reports lately? Do you know if everything on them is being reported accurately? If you are to be a successful businessperson, it is vital that you make a habit of checking your credit history.

Its not difficult. Financial institutions look at your credit record when you try to obtain funds for your business, such as applying for a line of credit. If youve not made an ongoing effort to be sure your credit is being reported accurately, and negative items show up on the reports, then these lenders will view you as being unable to manage your debts well and may just decide not to trust you with their money or their leased equipment. The best method to be sure this doesnt happen is to check your credit reports regularly and be sure that everything is accurate.

Here is what you should be watching for:

Items that should not be there. What do I mean by this? You want to be sure items aren’t on your report that you previously cleared up and you dont want to see any item(s) that never should have been there at all. What if you have a negative (or derogatory) mark that showed up previously on your credit report? Youve spent a lot of time clearing it up and then it starts showing up again? Hopefully, youve kept the paperwork showing how you corrected this problem because without it, you would have to start all over again to fight this negative mark when it reappears. All credit reporting agencies are known to have a high rate of repeat errors, so why take the chance. There easily can be items on your report that are inaccurate. The sooner you notice them, the quicker you can get them deleted. Anything that should be there. If youve spent time building up a positive credit history by paying off loans and this has put you in good standings, then you surely want these good marks to appear on your record. Its so important that your credit history includes these on-time, paid debts because when lending institutions or vendors considering offering a business line of credit, theyre going to look carefully at your creditworthiness by evaluating the amount of current outstanding debt as well as previous paid off debt. Your true history is showing. Everyone knows that ID theft is running crazy these days and its not just individuals at risk. ID thieves can easily steal the financial data from your company and go on a shopping spree using your hard earned business credit history. By regularly verifying that the data listed on your credit reports belong to your business, you greatly reduce your risk. Be sure the entire credit history is showing – as well as the correct accounts. Don’t be afraid to call on anything you find that looks suspicious. If you dont recognize something as belonging to your business, it is much safer to ask than to risk a bad situation from causing your business a problem.

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