Catching up on my magazine reading on the plane to Colorado, I found a terrific article in BusinessWeek on managing your personal credit score. It caught my eye because I’d just finished solving a credit score problem of my own.
My problem began with a Sprint account fraudulently opened in my name back in 2002. In 2005, Sprint sold the delinquent account to a collection agency. As a routine matter, the agency filed a negative report on me to the credit bureaus. That put severe downward pressure on my credit score. All before I even find out about the Sprint account!
Nothing like being assumed guilty and punished before being proven innocent.
To get my negative report deleted and get my credit score back up, I had to go to my local police precinct and file a report, fax copies of it to the collection agency, fedex notarized copies of the police report and other proof of identity to the collection agency, initiate a fraud alert with all three major credit agencies (Equifax, Experian, and TransUnion), and forward to them the collection agency letter acknowledging the mistake.
This is no joking matter. A low credit score doesn’t just have implications for your personal credit but also for your ability to fund your business. The approval of small business loans and the rates charged are affected by the owner’s credit score. Equity investors often run credit scores on the entrepreneurs as part of their "reference checking." Customers or vendors may do a credit check before signing a significant deal.
Moral of the story — just like a patient has to assume greater control of his or her medical care, and an employee, his or her career, we have to be vigilant when it comes to staying on top of our credit rating. All of this takes more time than you think so don’t wait until you need a loan, or are looking for an investor or signing an important contract! Get started now by finding out your credit score (make sure to check with all three, they’re not necessarily the same) and reading the BusinessWeek article, "Anatomy of a Credit Score."
What great advice. I had a little surprise on my credit report when I was closing on my apartment. A lean came up on my credit report. It turned out that someone in California had incorrectly input my Social Security number on someone else’s delinquency. In the end, everything turned out to be alright. But if I had checked my credit before making a major purchase, this situation could have been straightened out before applying for a loan and I wouldn’t have been caught off guard by my bank who made me aware of the situation.