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COLUMN

WESTON COUNTY GAZETTE


BILL TAYLOR
4/18/08
YOUR BUSINESS AND YOUR CREDIT REPORT

Is there a connection between your personal credit report and your business

financing? Since many small businesses are privately owned or in

partnerships, it is likely your personal credit history will be examined if you

look for financing for you business.

When was the last time you checked your credit report? Getting clean credit

now means you'll have more opportunities later.

Now's the perfect time to do a hearty cleanup of your credit history. Even if

you're not currently in need of working capital, forecasting business cycles is

always an imperfect science, so you never know when you'll need a cash

infusion – or when one of your potential business partners or vendors will

decide to check your credit.

What you don't know about your credit history can hurt you, so you should

assess your credit before you even have a need for capital. Alternative

finance institutions get calls from entrepreneurs in distress because they

were denied credit and they badly need working capital. It is often a

challenge for them to help small businesses and individuals gain access to
capital. One of the first questions they usually ask is, “Did you check your

credit report before you applied for financing?” About 80 percent say they

did not.

Now it's easier than ever to get the facts. As of September 2005, thanks to

the Fair and Accurate Credit Transactions Act, consumers in all 50 states can

get their credit reports for free each year from each of the three bureaus –

Equifax, Experian and TransUnion – by visiting

www.annualcreditreport.com. Because your personal credit history is

inexorably tied to your business, you'll want to review all three carefully and

pay to get your FICO credit score well in advance of needing capital. Fighting

inaccuracies and repairing credit can take time, says Howard Dvorkin,

founder and president of Consolidated Credit Counseling Services, a

nonprofit financial counseling agency. "You're not talking a few days; you're

talking a few months."

Once you have all three reports, scan your personal information for

accuracy. Something as simple as two numbers in your Social Security

number being inverted could eliminate your chances of getting credit. Next,

address any inaccurate late payments or charge-offs. Don't be afraid to call

creditors and ask them to remove one-time late payments. If you're

tenacious, 99 percent of the stuff can be removed.


If you can't have an item deleted, send an addendum to all three credit

bureaus explaining the reason for the late payment. It won't improve your

score or get the item off the report, but when lenders review your credit

profile, they can take that into consideration.

Next, order your small-business credit report from Dun &Bradstreet at

www.dnb.com. For $140, you can get a comprehensive analysis of your

business's creditworthiness. For $349, you can sign up for one year of D&B's

SelfMonitor service and receive unlimited access to your business's report,

as well as e-mail updates notifying you of any changes. A lot of vendors and

business lenders will review that, so you're better off finding out the

information before they do. And to keep your personal credit as insulated as

possible, ask to have any personally guaranteed trade lines or credit cards

transferred solely to the business once your company gets a few good years

under its belt.

The bottom line on your credit review: Even if it doesn't feel like a priority

compared to the pressing tasks related to running your business, make it

one. Getting a clear look at your company's credit position today can help

you not only address the past, but also plan more accurately for a successful

future.

SOCIAL SECURITY AND SMALL BUSINESS


Social Security's employer website will give you information on W-2s,

electronic filing, verifying Social Security numbers, free software, technical

specifications and much more. You can register to use Business Services

Online (BSO) at any time at www.socialsecurity.gov/employer.

Through the BSO, you can stop doing paper forms for your W-2 and W-3

wage reports and start doing them online. You also can file the correction

forms (W-2c and W- 3c) online. All you need is something you probably

already have: a computer and an Internet connection. So save yourself some

time and effort and turn your entire wage reporting paperwork process into

just a few keyboard clicks.

The University of Wyoming, United States Department of Agriculture and Weston County
Office cooperate.

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