Archive for the ‘Admin Notes’ Category
In Fact, Credit Scores
Some lenders will work with you if you have credit scores in the 600s, while others offer their best rates only to those creditors with very high scores indeed. Some lenders will look at your entire credit report while others will accept or reject your loan application based solely on your credit score.
The credit score is based on your credit report, which contains a history of your past debts and repayments. Credit bureaus use computers and mathematical calculations to arrive at a credit score from the information contained in your credit report.
Each credit bureau uses different methods to do this (which is why you will have different scores with different companies) but most credit bureaus use the FICO system. FICO is an acronym for the credit score calculating software offered by Fair Isaac Corporation company. This is by far the most used software since the Fair Isaac Corporation developed the credit score model used by many in the financial industry and is still considered one of the leaders in the field.
In fact, credit scores are sometimes called FICO scores or FICO ratings, although it is important to understand that your score may be tabulated using different software. One other thing you may want to understand about the software and mathematics that goes into your credit score is the fact that the math used by the software is based on research and comparative mathematics. This is an important and simple concept that can help you understand how to boost your credit score. In simple terms, what this means is that your credit score is in a way calculated on the same principles as your insurance premiums.
Your insurance company likely asks you questions about your health, your lifestyle choices (such as whether you are a smoker) because these bits of information can tell the insurance company how much of a risk you are and how likely you are to make large claims later on. This is based on research.
Studies have shown, for example, that smokers tend to be more prone to serious illnesses and so require more medical attention. If you are a smoker, you may face higher insurance premiums because of this.
Additional Accounts You May Wish to Consider
In addition to your checking account, you may also wish to consider other types of accounts such as savings, money market, CDs, etc. The interest rates are the lowest on regular savings accounts. They are usually higher on money market, C.D and other special accounts. Some have limits and withdrawals before specified dates may impose penalties. Some are more liquid and a limited number of checks can be drawn on the account without penalty as long as you maintain a minimum balance. The earnings are usually proportionate to the length of time for which your funds are committed.
Keep in mind that all accounts need not be at the same financial institution. However, it only makes sense that the amount of business you do with any one bank will be directly proportional to the benefits you will derive from it. Be sure to look at the stability of the bank you are considering. You will want to feel secure that tomorrow morning when you wake up that your funds will still be available to you.
A good banking record, along with the establishment of rapport with management and personnel of your bank, may get you special concessions. For example, the hold on your deposits may be waived if the management so desires or notary services may be extended for free as a courtesy. If you already have a bank with which you have been satisfied, you may wish to deal where you already have the advantage of being known by them as a valued customer.
Banking is serious business. Selection of the right bank and the right kinds of services will be a definite asset to your business.
Open a Checking Account
The first account you will need is a checking account. The following are some pointers that should help you to make needed decisions:
Your DBA is required. If your business name is an assumed one, you cannot open a checking account under that name without first having filed a DBA as discussed in the previous chapter. The DBA is a means for giving the bank authority to deposit and cash checks under your fictitious name. It should be noted here, that banking policies at most financial institutions preclude offering interest-bearing checking accounts unless your name is part of the company name. If you have filed a DBA, be sure to take your receipt with you when you open your checking account. The bank will require a copy for their records.
Select a checkbook style. When you open your checking account, you will be asked what style of checks you wish to order. You will have to decide between the book type and the wallet type. The smaller one is easier to carry, but the book type is the better choice. It will allow you to record more information about your checking transactions – information that can be invaluable during accounting procedures. There is a personal desk type checkbook that is smaller that the business size and still very adequate. You will have to ask about this particular style as it is not included under business checkbook selections.
How many checks should you order? Be sure to think ahead as to your needs before deciding on the number of checks to order. Reordering of checks can be costly. Start with a minimum order. In most cases there will be some change that needs to be made before long. You may get a new telephone number or decide to add or subtract a name.
At the same time you order, you may request that your checks be numbered beginning at a number other than 101. Frequently, this request will be denied on new accounts. However, if you are successful, the use of higher-numbered checks may keep the recipients of your checks from being tipped off that you are a new business. If all else fails, you can discard the first book or two books of checks and start your business with a higher check number.
