May 5, 2015
Dear Cathy:
I have filed two bankruptcies and
my credit is horrible. How can a person
like me even think about going into business?
Bad Credit, Iowa
Dear Bad Credit:
A bankruptcy is nothing but a reorganization of your finances and sometimes it is needed -- but only as a last choice. A bankruptcy stays on your credit report
for 10 years. It takes at least 1 to 2 years
or longer to clean up your credit. So
you definitely do not want to wait that long to start a business.
Remember most of the companies
claiming they can clean up your credit are not legitimate.
Only you can clean up your credit so as you build and grow your
business, you do need to order your credit reports yearly from the three credit
bureaus (Experian.com, Equifax.com, TransUnion.com) at http://www.AnnualCreditReport.com.
This means you are going to have 3
different credit scores. If your credit
scores are between 300 – 500, then you are in bad financial shape. A 620 is pretty good but your goal is to have
a credit score over 700 or 750.
Remember you might have to make
phone calls and write letters to fix your credit. It’s estimated that 79% of all
credit reports have some type of errors, over 25% have major errors and over
30% have accounts opened that should have been closed.
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