Learn how to manage your credit thereby increasing your credit scores. Learn how and why you should separate your personal credit from your business credit.

1. Managing Your Credit
Both Personal & Business
Total Solutions Alliance LLC

2. Credit Related Facts
• 79% of all credit reports contain mistakes
• 54% of all credit reports contain personal
information that is long outdated, belongs to a
stranger, or is otherwise incorrect
– Most people don’t know that this incorrect
information can have an effect on credit
scores.
• Common types of incorrect information
are: Spelling of names, date of birth and
even social security numbers
• 30% of all credit reports contain accounts that are
closed by the consumer but continue to be
reported as open

3. Credit Related Facts
– Some creditors will look at this open
credit and take that into consideration
when making credit decisions
• 25% of all credit reports contain errors
serious enough to result in the outright
denial of credit
– This can be due to Identity Theft or just
outright incorrect reporting
• Bankruptcy only has approximately a 1%-
2% impact on a credit score.

4. Credit Related Facts
What causes the credit scores to drop
dramatically after a bankruptcy is that
the creditors included in the bankruptcy
will continue to report the account as
negative when in fact the account
included in the bankruptcy has been
wiped as if it never existed and should
be removed from the credit report.

5. Credit Management
Versus Credit Repair
• With credit repair, the focus is on negative credit. If
using a credit repair company, you usually will make
monthly payments and they work on a 90-120 day
cycle.
– Dispute letters are sent out on the negative items
to the credit reporting bureau in the hopes that
the credit repair bureau is so over worked that
they will not have the time to get to your dispute
and eventually just remove the item from the file.

6. Credit Management
Versus Credit Repair
– Some companies will mail you the letters so that
you can mail them yourself. Some will even invest
in the postage stamps for you to mail the letters.
• The letters focus mainly on the negative items
• The problem with that is that this will tag you
as a credit repair client and they work over
time to validate the debt

7. Credit Management
Versus Credit Repair
• With credit management the focus is on both the
positive and negative credit.
– Sometimes by reducing the balances on credit
cards that are in good standing can help in raising
scores and improving credit.
• Try to always carry a balance that is 30% or
below of your approved credit line

8. Credit Management Versus Credit repair
(continued)
• Working directly with the creditor who is reporting
negative credit and coming to an agreement in
writing can also help in increasing scores by making
payment arrangements and asking the credit to
either remove the negative item or start reporting it
in a positive status.
• Do not make the payment until you have
received a letter outlining the terms of the
agreement from the creditor.

9. Credit Management Versus Credit repair
(continued)
• This letter can be sent to the credit bureau if the creditor fails
to keep their end of the agreement.
• If a person has no credit, limited credit, no or limited credit in
good standing, they can increase their scores by applying for
secured credit cards, use only 30% of the credit line and pay
on time. Some secured credit card issuers will review the
account every 6-12 months and if there is a satisfactory
payment history will convert the account from secured to
unsecured.

10. Credit Management Versus Credit repair
(continued)
Business Credit & Personal Credit
• Keep Personal credit separate from business credit.
– If you use your personal credit for business
purposes, this can have an impact on your
personal credit.
• Stay away from Business credit that requires a
personal guarantee, this credit will also show up in
your personal credit profile and can cause your debt
to income ratio to be affected.

11. Credit Management Versus Credit repair
(continued)
• There are many companies that will give credit with
no personal guarantee
• If you have no business credit established, start with
companies that will give you credit and do not
require you to use your SS#. Get a Tax Id number for
your business, if you don’t already have one. Use
your Tax Id number to apply for your business credit.
• Get a D & B number if you don’t already have one.
When applying for a D & B number, they will try to
sell you their credit building service.

12. Credit Management Versus Credit repair
(continued)
• Don ‘t purchase this. This is something you can do
yourself and there are companies who will do this for
free for you.
• Experian also has a business credit division, if you
have established credit for your business make sure
to also check with Experian for accuracy on your
report.
You can do all of the above yourself or there are
companies that will do this service for you.

13. Credit Management Versus Credit repair
(continued)
I highly recommend that if you decide to hire someone
to do this for you that you do your due diligence. Do
not use credit repair companies, if you choose to go
this direction, use a credit management company.

14. FICO Scoring Factors
• Payment History (35%):
• - Account payment information on specific types of accounts
(credit cards, retail accounts, installment loans, finance company
accounts, mortgage, etc.)
• - Presence of adverse public records (bankruptcy, judgements,
suits, liens, wage attachments, etc.), collection items, and/or
delinquency (past due items)
• - Severity of delinquency (how long past due)
• - Amount past due on delinquent accounts or collection items

15. FICO Scoring Factors
• - Time since past due items (delinquency), adverse
public records (if any), or collection items (if any)
• - Number of past due items on file
• - Number of accounts paid as agreed
Amounts Owed (30%):
• - Amount owing on accounts
• - Amount owing on specific types of accounts
• - Lack of a specific type of balance, in some cases

16. FICO Scoring Factors
• - Number of accounts with balances
• - Proportion of credit lines used (proportion of
balances to total credit limits on certain types of
revolving accounts)
• - Proportion of installment loan amounts still owing
(proportion of balance to original loan amount on
certain types of installment loans)

17. FICO Scoring Factors
Length of Credit History (15%):
• - Time since accounts opened
• - Time since accounts opened, by specific type of account
• - Time since account activity
Types Of Credit Used (10%):
• - Number of (presence, prevalence, and recent information
on) various types of accounts (credit cards, retail accounts,
installment loans, mortgage, consumer finance accounts, etc.)

18. FICO Scoring Factors
New Credit (10%):
• - Number of recent credit inquiries
• - Time since recent account opening(s), by type of account
• - Time since credit inquiry(s)
• - Re-establishment of positive credit history following past
payment problems

19. Increasing Your Score
• Pay your bills on time.
• Proving that you can pay your bills on time is the best thing
you can do to improve your score. And it’s never too late to
start. Even if you’ve had serious delinquencies in the past,
these will count less over time.
• Keep credit cards balances low.
• High outstanding debt can pull down your score.

20. Increasing Your Score (continued)
• Check your credit report for accuracy.
• There may be inaccurate information on your credit report
that can be easily cleared up. Always contact the original
creditor and all three credit bureaus whenever you clear up
an error, so that the inaccurate information won’t reappear
later. Requesting a copy of your credit report won’t affect your
score if you order it directly from the credit reporting agency
or an authorized organization.

21. Increasing Your Score (continued)
• Pay off debt rather than moving it around.
• Consolidating your credit card debt on one card or spreading
it over multiple cards will not improve your score in the long
run. The most effective way to improve your score is by simply
paying down the amount you owe.
• Have credit cards-but manage them responsibly.
• In general, having credit cards and installment loans which
you pay on time will raise your score. Someone who has no
credit cards tends to have a lower score than someone who
has managed credit cards responsibly.

22. Increasing Your Score (continued)
• Don’t open multiple accounts too quickly especially if you
have a short credit history.
• This can look risky because you are taking on a lot of possible
debt. New accounts will also lower the average age of your
existing accounts, something that your FICO score also
considers.
• Don’t close an account to remove it from your record.
• A closed account will still show up on your credit report, and
may be considered by the score. In fact, closing accounts can
sometimes hurt your score unless you also pay down your
debt at the same time.

23. Increasing Your Score (continued)
• Shop for a loan within a focused period of time.
• FICO scores distinguish between a search for a single loan and
a search for many new credit lines, based in part on the length
of time over which recent requests for credit occur.
• Don’t open new credit card accounts you don’t need.
• This approach could backfire and actually lower your score.
Make sure to check your credit report at least every 6-12 months
to make sure that there are no mistakes.

24. Increasing Your Score (continued)
• Disclosure: Keep in mind that individual results will vary
depending on the individual’s credit profile.
• Be patient, building a strong credit profile, both personal and
business takes time but is well worth it.
• Do your due diligence and with a little patience and effort
you are well on your way to creating a strong credit
profile, both for personal and business use.

25. Total Solutions Alliance LLC
For Free Consultation on we can help you go
from Financial Crisis to Financial Prosperity
contact:
Pilar Tobias
408-372-4797
PTobias@TotalSolutionsAlliance.com
www.TotalSolutionsAlliance.com