10 tips to help you build business credit.

Publishing is being hit hard by a declining economy and rapidly changing technology. However, you’d think a publisher of textbooks would be somewhat ‘recession proof’. Not so. Moody’s last week withdrew its credit ratings for Houghton Mifflin Harcourt HMH), one of the biggest educational publishers in the US.
Moody’s, which measures and rates businesses’ ability to repay their debts, said that it would withdraw rating for all of HMH’s debt securities, believing the company’s debts are high risk. The result to HMH will be higher borrowing costs. The Boston, Massachusetts based firm has annual sales of approximately $2.1 billion.
According to the …read more

Americans’ credit happy spending habits may cause some to seek credit repair, but now it seems the credit rating agencies are the ones whose policies need an overhaul – at least when it comes to rating mortgage-backed securities.
On December 3rd, The Securities and Exchange Commission (SEC) approved a series of measures to increase transparency and accountability at credit rating agencies. The new rules ensure that firms provide more meaningful ratings and greater disclosure to investors.
Credit rating agencies’ ratings of residential mortgage-backed securities are responsible in part for the current credit crisis. The SEC performed an extensive 10-month examination of three …read more

The best case is a person who has wealth (assets) and income (cash inflows) and uses his income to generate assets that earn income which generates more assets which earn more income which generates more assets which generate more income . . .
A truly rich person is one who does not have to earn income, but has assets which earn income for him.
Behind all the jargon, what accounting really does is track the process or cycle of assets generating income which generates assets which generate income which generates assets . . .
This post is part of the b5media Business Channel …read more

Consider a person who owns a huge mansion, an expensive car and designer clothes, but has no job.
He has wealth, but no income. He has assets which do not earn and are expensive to maintain. (The case with many an actor past his heyday). Of course, these assets can always be sold and generate temporary cash inflows. However, when they have all been sold and there is still no job . . .
Consider a person who earns an annual salary in 5 or 6 figures, but who spends all of it in consumables. He will …read more

At the end of the day, what accounting does is: it measures wealth and talks about how income creates wealth.
There is a world of difference between wealth and income. It is easy to confuse the two. And many think wealth and income are synonymous. Wealth is what is owned. Income is what is earned.
Wealth consists in assets. Income consists in cash inflows.
This post is part of the b5media Business Channel Great Blog Off! Find out more about the Blog Off at http://www.b5media.com/b5media-blogs-for-a-cause.
If you want your $$$$ to have the maximum & optimum effect on …read more

Even if you do not need to borrow to cover Expenses (especially if you are generating a Cash surplus), it is good financial strategy to borrow anyway and pay on time. Borrowing –when you know you can pay on time– establishes your credit rating and improves your credit standing. With a good credit rating and standing, it will be easy to borrow when you really need it.
If you follow the financial strategy of borrowing to establish or improve your credit rating / standing, do not keep the proceeds of the loan in your Savings Account or …read more

Whenever you use your credit card for a purchase or any expense payable through a credit card, the issuing bank or credit card company is betting that you will not pay your whole balance within the free 30-day grace period and they will earn revenues from your account. By paying the whole balance before the 30-day interest free period, YOU WIN THE BET.
The greatest income of issuing banks and credit card companies come from the interests and penalties they charge for outstanding amounts at the end of the 30-day period.
So, bet on a sure thing. Pay your whole credit …read more

First, find out your credit score and credit risk rating by obtaining a credit rating report from TransUnion (www.transunion.com), Experian (www.experian.com), or Equifax (www.equifax.com). Ascertain whether all the entries are correct and fair.

The most common causes of a low credit score (600 and below) or a high credit risk rating (R5 or higher) are:
a short credit history: 2 or 3 late payments do not look as bad in a 5-year record as in a 2-year record
total loan payments are more than 40% of your personal disposable income
a record of bankruptcy (records are kept for 10 years)
frequent late payments: an …read more

Credit Scores generated by the financial institution’s credit rating system range from 300 to 850, where the higher score denotes a better risk. A score below 600 is subprime. Although credit bureaus estimate that more than half of US residents have credit scores higher than 700 and will qualify for normal market rates on their loans, it is nevertheless important to find out how you can fall into the subprime category and be saddled with higher interests and more stringent loan provisions.
A score below 600 can be earned:
…read more