5 Things You Can Do To Improve Your Credit Score

(Submitted by Chris Smalley, Business Development Specialist, Small Business Development Center, OSU South Centers)

Planning on buying a car, house or even starting your own business? One of the major factors that help the lender determine your loan ability and interest rate is your credit score. If you can get your FICO score above 700, you have a lot better chance of obtaining a loan at a competitive rate which in turn translates into a smaller monthly payment leaving you with more cash flow for other expenses. Here is an article on 5 things you can do to improve your credit score. www.pnc.com

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Credit scores. We all have one. Well, technically we all have at least three – one from each of the three credit bureaus: Equifax, Transunion, and Experian. And most of us know a few things about credit scores like the fact that they’re important, or that you can’t apply for a loan or credit card without one.

You might be wondering, what IS a credit score?

Good question.

One of the most common credit scores is known in financial circles as a FICO® score. It is a three digit number that provides lenders and other financial institutions with a summary of your credit history. According to the FICO blog, the average credit score in the United States as of April 2016 was 699. The algorithm for determining each individual’s credit score is a closely held secret, but most financial professionals agree that it’s a mix of the following factors:
•The length of time you’ve been using credit
•How much debt you have compared to your available credit
•If you’re reliable when it comes to making payments on time
•That you use a mix of different types of credit instruments (i.e. loans, credit cards, mortgages)
•How often you’re applying to open new lines of credit

If you’re wondering why the range of your credit score matters, it all comes down to this: Your credit score determines how much interest you’ll pay and how much money you can borrow. It also determines whether or not you’ll be on the hook for extra security deposits when renting a home or setting up your utilities.

The better your credit score, the more likely your interest rate will be lower, your borrowing limit higher, and the less chance you’ll have to dish out extra funds when setting up your electric bill or cellphone.

The great news about credit scores is that these numbers aren’t permanent or static. They CAN change and you have the power to increase your credit score by following a few simple rules.

5 HABITS THAT WILL IMPROVE YOUR CREDIT SCORE

Always pay your bills on time. Every time.

One of the most important things you can do to improve credit or maintain an excellent credit score is to make sure that you always pay your bills on time. Many of us like to pay more than the minimum balance on our credit cards or loans, and that’s a good and smart thing to do. But if you ever find yourself in a bit of a financial bind, make sure you can make at least the minimum payment on time to keep your credit score from taking a significant hit.

Be mindful of the reason you’re applying for new credit.

If you’re on the hunt for a new car, home, or personal loan, make sure you do your loan shopping before you apply for new lines of credit. Recent credit inquiries can reduce your score so plan for when you apply for a new line of credit or an increase in your existing line of credit. It is worth mentioning that when you apply for any credit, closed end installment loans, or open end credit lines, the lender makes an inquiry with the credit bureaus. An inquiry or two won’t significantly impact your credit score, but several inquiries over a short period of time might lower it a few points.

Never max out your credit cards.

A significant part of your credit score is calculated by examining your debt to credit limit ratio, or how much debt you’re carrying compared to the amount of available credit you have. If you have $100 in credit and you have $99 charged to that account, that means you have 1% of your available credit open for use. Not good. A good rule is to tie up no more than 30% of your total credit limit.

Keep your oldest account open and in good standing.

Want to know one of the biggest mistakes you can make after paying down your debt? Closing your oldest account. Did you know that one of the most important parts of calculating your credit score is the length of your credit history? If you close your oldest accounts, your credit history is instantly shortened. It’s okay to close accounts, but make sure you keep your oldest account open.

Monitor your credit report and your credit score.

Part of improving or maintaining your credit score means keeping an eye on your credit report and your credit score. You can get a free copy of your credit report every 12 months from each credit reporting company by visiting AnnualCreditReport.com. It’s a good idea to check on your credit score at least once a year or before you apply for any new car loan or mortgage.

A New Year and Successful Resolution that can really change your life

(Submitted by Chris Smalley, Business Development Specialist, Small Business Development Center, OSU South Centers)

The New Year always seems to bring some type of resolution to our lives. Eating healthier, quitting smoking, working out, or going to bed earlier just to name a few. But how long do people really stick to these types of resolutions? A resolution that I started 8 years ago and have no intention of quitting anytime soon was my own business.

For my entire life, I had watched my parents own and operate their own business and although they probably would say it wasn’t always a positive experience the majority of my memories were good ones. I happened to be at a crossroads between careers, which seemed like a perfect time to act on my lifelong dream and follow the example they had set for me in business ownership. Having a plan, starting small and being in control all were things I knew were a must to be successful when creating something from scratch.

Successful? What does that really mean? To me, successful people think long term, not short. I went into business with the idea of creating something for my children. I didn’t have any when I started…I now have 3. Successful people know that is takes a lot of hard work, and it’s not only about luck (although sometimes you may get lucky).

I grew up on a farm and as mentioned before spent a lot of time in my parents retail business. I have never shied away from work in fact I think I’m attracted to it and am more comfortable when working. It’s a good thing because building a business takes a lot of blood, sweat and at times tears.

Successful people take responsibility and don’t blame others. They are humble and eager to learn the things they don’t know. I took responsibility and was eager to learn new things about business ownership (and let me be first to tell you there are more than you would think).

Successful people talk about ideas not people. Competition in business can sometimes take over and adversely affect your character. I have always felt however there is plenty of work and I feel competition is a good thing that keeps everyone honest. Successful people know purpose and mission and don’t focus on rank and status. They are driven by growth and not by money.

Now don’t get me wrong, the extra income achieved is nice but the idea of growth and the satisfaction achieved when something comes to fruition definitely outweighs the monetary value. Successful people want others to succeed. I enjoy nothing more than seeing others around me grow because of my experiences and me being able to share with them those experiences.

I have been able to carry over my experiences of business ownership into my fulltime career as a business counselor allowing me to share firsthand what expectations my clients should have. Successful people complement instead of criticize. Successful people embrace change instead of avoiding it. I embraced the opportunity of change and took control of my life. You too can take control and make yourself successful in 2017.

Remember 3 very important steps. Make a plan – plan for success so you don’t fail before you have a chance to get started. Start small – Allow yourself to get your feet under you and work out the bugs while you can. Be in Control – Allow yourself to control the business, don’t let the business control you. If you follow these 3 simple steps you will be successful in your endeavors.

For more business start-up/expansion assistance contact your local SBDC office.

The Ohio State University South Centers
Business Development Netork
1864 Shyville Rd. Piketon, Ohio 45661
740-289-2071

Assistance Sources for your Business Start-Up or Expansion

(Links shared by Chris Smalley, Business Development Specialist, Small Business Development Center, OSU South Centers)

puzzle-654110_1920 (2)Knowing where to go when you run into issues that may be outside of your business expertise is vital to business success.

Below are a few key links and phone numbers in our southern Ohio area for important assistance sources. You may reference contacts as needs arise during your business start-up or expansion:

SBDC at OSU South Centers
740-289-2071
http://southcenters.osu.edu/business/

Southern Ohio Procurement Outreach Center
800-408-1334
www.sopoc.org

Community Action Committee of Pike County
740-289-2371
www.pikecac.org

Lawrence Economic Development Corporation
800-408-1334
www.lawrencecountyohio.org

Portsmouth Inner City Development Corporation
740-353-8395
www.pidcovmba.org

Economic Development Alliance of Southern Ohio
740-772-5100
www.edaso.org

Ohio Valley Regional Development Corporation
800-223-7491
www.ovrdc.org

Internal Revenue Service
800-829-1040
www.irs.gov

Jackson County Economic Development Office
740-286-2838
www.jcedb.com

Adams County Chamber of Commerce
937-544-5454
www.adamscountychamber.org

Brown County Chamber of Commerce
937-378-4784
www.browncountyohiochamber.com

Gallia County Chamber of Commerce
740-446-0596
www.galliacounty.org

Highland County Chamber of Commerce
937-393-1111
www.highlandcountychamber.com

Jackson County Chamber of Commerce
740-286-2722
www.jacksonohio.org

Lawrence County Chamber of Commerce
740-377-4550
www.lawrencecountyohio.org

Pike County Chamber of Commerce
740-947-7715
www.pikechamber.org

Ross County Chamber of Commerce
740-702-2722
www.chillicotheohio.com

Scioto County Chamber of Commerce
740-353-7647
www.portsmouth.org

Vinton County Chamber of Commerce
800-596-4459
www.vintoncounty.com

Tips to avoid the demise of your small business startup

(Link shared by Chris Smalley, Business Development Specialist, Small Business Development Center, OSU South Centers)

thumb-489549_1920“According to the Small Business Administration, only two-thirds of new businesses last at least two years, and 44 percent survive for at least four years.” So what can you do to keep your business alive?

Take a look at CNN Money (money.cnn.com)’s article, 10 Tips: Avoiding the startup graveyard, by Jessica Seid, CNNMoney.com staff writer, that was posted online on September 20, 2006 at 10:31 AM EDT. These tips span the years.

Business Plan Overview

(Submitted by Chris Smalley, Business Development Specialist, Small Business Development Center, OSU South Centers)

2015 4-2 Business Plan Overview - C Smalley

A business plan is a roadmap to how your business operates; or if you are a start-up, how you envision it to operate. If you are seeking financing, it is generally required that you develop a business plan to some degree. To what extent your plan is developed is typically driven by the amount of financing you are requesting, coupled with your financial history and how the funds will be used.

A business plan usually consists of an Executive Summary, a Business Description, and the 3 M’s – Money, Marketing, and Management.

The Executive Summary is just that a brief overview summarizing the entire plan including the compelling reason the business will succeed. If you are seeking financing, the summary also includes how much is needed for what and from where.

The Business Description describes why the company exists and its relevance in the industry. It also discusses the products or services you will offer and what sector of the industry you will serve (are you in wholesale, retail, etc.).

The 3 M’s – the Money Section (or Financial Section) is typically coupled with a financial projections model showing the cash flow projections, profit and loss statement and descriptions of how each is achieved. It is best to not only show these numbers but also discuss how you arrived at them. To demonstrate your accuracy, utilize figures from industry standards or factual numbers from your current business or a like business. This Section is also where you will discuss details about the break-even and ratio analysis as well as where needed funds will be obtained. You will also need to include your personal financial statement; since in most cases, the business is not the only thing lenders look at and a personal guarantee is required for financing.

The 3 M’s – the Marketing Section can be a plan all on its own as the information supplied in this section is possibly the most important. You may have the best product or service in town but if not marketed properly that product or service doesn’t matter. You will want to answer questions like: Who is your target customer? What is your competitive advantage? What is your strategy on positioning your product or service? What marketing mediums will serve your business best? What kind of marketing budget are you planning? How will you gauge if the type of marketing you are doing is working? All of these are some very in depth questions that call for some detailed and well thought out answers.

The 3 M’s – the Management Section is also very important; however, it may come a little easier to most as this is the area that most business owners already have intact. Although, there still needs to be some leg work done in developing resumes that show the experience of owners and managers. This section should also include an organizational chart showing who is responsible for what and how the decision making process flows: How many employees are needed? What skills do they need to possess? How is risk managed? What professional support is needed?

A well put-together business plan can better your chances of securing funding at a financial institution as well as lead your business to success.

Contact your local Small Business Development Center (SBDC) for more in depth assistance on developing a Business Plan.