|  | 

Business

Strengthen your personal credit score before starting a new business

your business

Strengthen your personal credit score before starting a new business

If you’re thinking of starting a business, one of the first things you need to consider is the strength of your personal financial position.

Even if you’re only at the research stage of your business start-up process, it’s easy to find yourself trapped in a cycle of personal debt – if things don’t go to plan the bills quickly mount up and you don’t have the income to cover your expenses.

One of the negative consequences of running up personal debts is that even once you’ve worked through your challenging situation, and established a more stable financial position for yourself, it’s likely that you’re going to be left with a compromised credit history that will inhibit your ability to successfully apply for loans, credit cards, or finance in the future.

It’s important to try and repair the damage that’s been done. Here are some steps that you can consider when looking to rebuilt your credit history

Simplify your personal financial affairs

The first step to take is to consolidate all of your debts. Usually the simplest way to tackle debt consolidation loans for bad credit is to bring any credit cards or store credit facilities into a single personal loan. This will help to simplify the repayments required and will most likely give you a lower overall interest rate charge, saving you money in the longer term. Consolidating your debts as part of a debt reduction strategy is a good indicator that you’ve got your debts under control and can effectively manage your finances – particularly if you’re considering applying for an unsecured business loan.

Your home could be your most important asset

If you own your own home, or property of some sort, then unlocking your equity from this asset can help to reduce your unsecured personal debts. The advantage of using the equity in your property to manage your finances is that by securing your debt against the asset you will be able to achieve a lower interest rate, thereby saving you money. However the drawback with this approaches that if for some reason you are unable to maintain payments against the debt that you’re servicing, then you are placing your home at risk.

Ensure that you’re setting yourself up for success

Don’t set yourself an unrealistic payment plan, it will only end up causing you more problems if you remain in a financially vulnerable position. Shop around financial institutions to ensure that you’re getting the best interest rate possible, and a repayment structure that suits your circumstances. You need to be able to commit to a realistic budget that can cope with the monthly repayments that you are setting for yourself.

Keep tight control of your expenditure

Until you can demonstrate that you have returned to financial stability, it’s imperative that you don’t take on any new debts. Avoid the tempting offers of new credit cards, or lines of credit with low interest rates – stick with the debt consolidation plan that you’ve set for yourself. Repair your credit history and begin to look to a sound financial future.

strengthen-your-personal-credit-score-before-starting-a-new-business

ABOUT THE AUTHOR

Related Articles

  • How to rebuild your credit score

    How to rebuild your credit score

    A step-by-step guide A credit score is an assessment used by financial institutions, such as banks, that is used to assess a client’s ability to manage their own credit, and how well they can be trusted to pay back the money loaned to them. Rebuilding your credit score is part of the recovery process required

  • Cheers! Beer company donates $72,000 to LGBTI community

    Cheers! Beer company donates $72,000 to LGBTI community

    Is it time to change which beer you drink? The US beer brewing company MillerCoors reaffirmed its dedication to the LGBTI community. Through its nationwide program Tap Into Change, the company donated $72,000 to the community. The program is in its sixth year and has so far donated $175,000 to programs focused on equality. MillerCoors

  • Apple’s iPhone 8 – Coming in 2017

    Apple’s iPhone 8 – Coming in 2017

    2017 will mark the 10th anniversary of the iPhone and Apple has something major planned to celebrate the occasion. We’ve got several months to go until the launch of the iPhone 8, but because of Apple’s ambitious plans for the device, there are already an abundance of rumors hinting at the impressive features coming in

  • GAY LUBE COMMERCIAL ‘BANNED FROM AIRING’ DURING RUPAUL’S DRAG RACE

    If you can’t watch a male lubrication ad during RuPaul’s Drag Race, when can you? We officially have our first casualty of the long-running drag competition moving from Logo to its more mainstream sister network, VH1. Boy Butter founder Eyal Feldman claims Comcast banned the commercial in Chicago for being too gay. “I learned that

POST YOUR COMMENTS

Pic of The week

Pic of The week

4GUYS Magazine is your essential guide to the Toronto, Vancouver, Montreal, Calgary and Seattle area. You’ll find the latest information on dining, nightlife, culture, news, politics, communities, and trends in Toronto—everything to help you make the most out of living in and around the city.

Division of

Division of

Our Directory

Our Directory

Maximize your Business Visibility and Accelerate your Marketing

Featured Models

Help with $2, $5, $10, $20, $50

Help with $2, $5, $10, $20, $50

If you like our site Help us to make it better. THANK YOU

add-your-events-for-free

add-your-events-for-free

Add as many events as you want for FREE

Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.