Month: February 2021

Why You Need to Know About Credit Reports & Credit Scores

Having good credit and using it wisely is more important than ever these days. Fortunately, it is also easier than ever to monitor your credit files and to correct errors that could have a negative impact on your credit rating thanks to a series of new laws designed to protect you, the consumer, in your use of credit, credit cards and the credit system.

The Importance of A Good Credit Report

Your individual credit report is an important barometer of your overall financial health. This summary of your financial reliability—prepared by credit bureaus (also called credit reporting agencies)—tells lenders about your history of paying bills and is used by them to decide whether to loan you money and at what rates and terms.

Your credit report is compiled from information lenders supply to the credit bureaus. It has four parts:

• • Identifying information.
  • Public record information…to determine if you have previous defaults or legal judgments against you.
  • Credit history information…such as a list of your credit cards and loans and whether payments were on time.
  • Inquiries…a section that lists the creditors or other parties that have requested your credit report.

Obtaining a Copy of Your Report Is Free

Typically, there is no single credit report. Most likely, each of the three major nationwide credit bureaus—Equifax, Experian and TransUnion—have a credit report on you. And because the credit bureaus may collect and report different information, many experts advise you to obtain your report from each. Under federal law, you are entitled to obtain a free copy of your credit report once a week from each of the three major credit bureaus (Equifax, Experian and TransUnion). It is especially important to review your credit report before making a major purchase so you can correct an error before it slows down your credit approval or prevents you from getting the best possible loan terms. Your free weekly credit reports are available through April 2021.

Obtain a free credit report by visiting www.annualcreditreport.com or call 877.322.8228

What to Look for, When to Act

With your report in hand, closely review these key areas:

• • Timeliness—If it shows late payments, but you always pay your bills on time, correct the error immediately.
  • Accounts—Make sure all the accounts are yours. Identity thieves often open accounts in your name using stolen information, and they will often show up here.
  • Dormant Accounts—If you notice accounts you no longer use, it might be wise to close them. They could be affecting your credit score.
  • Credit Score—If the report does not include your credit score, ask for it. There may be a charge. A free credit score is not included in your free credit report.

Correcting Wrong or Incomplete Information

• • Identify each item in your credit report that you dispute.
  • Immediately tell the credit bureau, in writing. Federal law requires credit bureaus to investigate your complaint (generally within 30 days), send you a prompt response and correct any errors.
  • Contact the company that provided the inaccurate or incomplete information and request a correction of its records, too.

If a credit bureau’s investigation does not resolve your concerns, the law allows you to submit a brief statement about the matter that must be attached to your credit report and provided to anyone that accesses your report in the future.

The Importance of Your Credit Score

A credit score is a number used by lenders to make a decision on a loan or other credit. Many lenders use a system developed by Fair Isaac and Company called the FICO score—a point system based on your credit history to predict creditworthiness (see chart). Your credit score is most influenced by

• • Your payment history
  • The amount of your debt

 

Late payments, a past bankruptcy, debt collections, or a court judgment ordering you to pay money as a result of a lawsuit will negatively affect your credit score. Too much debt relative to your income is also a warning sign to creditors and will usually lower your score. In general, the better your credit score, the better your chances of getting credit with an attractive interest rate. Since your credit score is highly dependent on your credit report, it is critical that your credit report is accurate. Your score, along with an explanation of how the score was derived, is available from any of the three major credit bureaus usually for a fee. Each bureau may have different information about you, so your score may vary from one company to another.

Your Legal Protections

Federal law (The Fair Credit Reporting Act) provides a “bill of rights” for consumers’ credit records—your right to ask for your credit score…to know when information in your file is used against you…to dispute incomplete or inaccurate information and to have it corrected…to restricted access to your report (including employers, who must have your explicit permission)….and to seek damages in specific instances.

Fraud Alerts: A “Fraud Alert”  can be placed on your credit file. A Fraud Alert helps prevent anyone from opening new accounts in your name, acting as a red flag on your credit report, visible only when businesses access your file to possibly extend you credit. To place an alert on your account, call one of the three credit reporting agencies and ask them to flag your credit file for fraud. An alert will be attached to your credit file and your name will be removed from pre-approved credit and insurance applications for two years.

Initial Alert: An “Initial Alert”  will be active on your credit report for 90 days. Use this if someone has gained access to personal information that could be used to open accounts in your names, such as your Social Security number, or a credit account number. Once an initial alert is in place, potential creditors will need to verify your identity prior to extending credit, so you should provide them with a phone number where you can be easily reached.

Extended Alert: An “Extended Alert”  is recommended if your identity has been stolen. With an extended alert, your credit file will remain guarded for seven years. In addition, your name will be removed from lists marketing prescreened credit offers for five years.

Military Fraud Alert: Members of the military on active duty are eligible for a “Military Fraud Alert.”  This alert allows members of the military to prevent anyone from opening accounts in their name while they are deployed.

Credit Freeze: Take action to protect your personal financial security. Place a credit freeze on your accounts by calling each of the three nationwide credit bureaus to restrict access to your credit report. If you want a business, lender, or employer to review your credit report, then upon your request, the credit bureau will lift the freeze either temporarily or permanently at no charge to you. Companies that had access to your report prior to the credit freeze will still have access to the reports.

Victims of Identity Theft Have Additional Rights

You have specific rights when you believe that you are the victim of identity theft:

• • You can ask the nationwide credit agencies to place “fraud alerts” in your file (see above).
  • You have the right to free copies of the information in your file.
  • You can request and obtain documents relating to fraudulent transactions made or accounts opened using your personal information.
  • If you believe the information in your files is the result of identity theft, you can request that the consumer reporting agency block that information from your file.

 

Learn more about credit reporting agencies:

www.equifax.com 800.685.1111

www.experian.com 888.397.3742

www.transunion.com 800.888.4213

For more information visit: www.ftc.gov/credit.

 

As a small business owner, you wear a lot of hats and juggle many different responsibilities. But above anything else on your plate, you know it’s imperative customers pay you on time. You need cash flow to manage your business, pay your debt and invest in your growth.

Here are five easy ways to get paid faster:

1. State your payment terms clearly. Before you begin any work with a customer, settle your terms and conditions. It’s best to have an agreement in place that clearly defines your company’s expectations for completing work — the project’s parameters and how much it will cost, when payment is due and how the customer can make the payment. If you opt to add penalities or rewards for early or late payment, specify the details in any documentation provided.
2. Expand your payment options. Your ultimate goal should be to make it as easy as possible for customers to pay you. Ask your customers which payment methods they prefer so you can ensure they can provide payment within your terms. Additionally, when you offer multiple ways to pay, it’s harder for customers to avoid making a payment on time.
3. Use electronic invoicing. If you’re still sending paper-based invoices to your customers, you may want to rethink your process. When you upgrade to electronic invoicing, your invoices are sent directly to your customer — you don’t have to worry if it was lost in the mail or delivered to the wrong person. Additionally, most electronic invoice services offer customers a way to pay directly to your account with the click of one or two buttons. Plus, there’s a better “paper” trail so you can track delivery and payment if desired.
4. Send invoices as soon as possible. Make it a habit to send invoices as soon as you complete a project, so your customer receives the invoice when your business is “top of mind.” If you wait to send invoices, your customers may delay payment as well.
5. Follow up on late payments. While likely not your favorite thing to do, you must follow up with customers who have not paid you on time. Consider sending a “payment due” reminder email, or give your customer a quick call. If you use electronic invoicing, you can automatically set up reminders to ensure customers pay you on time.

Every business is different, but implementing these practices will increase your chances of getting paid on time and in full. And once you receive payment, you can then pay for the things you need and invest in your company’s future.

To learn more about the ways Pinnacle Bank can help you manage your cash flow, talk to one of our Business Specialists today at 877.759.7939.

Your employees are critical to your company’s success. Ultimately, you want engaged employees who help customers in the same way you would. And while you may hire people with this in mind, how do you maintain that same focus each day? Plus, with many employees working remotely, how do you keep them engaged and excited about your company?

Here are six tips to reward and recognize your employees — an essential way to keep them engaged:

1. Recognize employees at in-person or virtual meetings. Whether in person or at a remote staff meeting, take time to celebrate wins together. Point out significant accomplishments and be specific with your reasons for the recognition. You should also allow time for employees to socialize with one another.
2. Give employees gift cards to local businesses (if possible). Support other local businesses that may be struggling by purchasing gift cards and use them as rewards for your employees. It’s a great way to support your community as a team. And if you can find a way to automate the gift card, that’s even better. Timeliness matters, so try to get any reward to an employee as soon as possible.
3. Write a personal message for a job well done. Everyone likes to feel appreciated. When you notice an employee going the extra mile or giving the type of service you would give to a customer, send him or her a note. You can send a card or an email — either way, it is the thought that counts.
4. Recognize employees on public channels. It’s always a great idea to highlight employees making a difference or accomplishing significant milestones on your company’s Intranet or social media channels. Not only will other employees see their contribution to the company, but customers may as well. Just be aware of what is and isn’t appropriate to share publicly and ask employees for permission to share personal milestones (even by asking you’re bringing recognition to the employee).
5. Offer opportunities for professional development. Give employees ways to hone their skills or enhance their education through online or in-person (if available) courses. You may even want to register your entire team for specific classes. The more committed you are to your team’s education and advancement, the more they will work tirelessly to reach your company’s goals.
6. Buy lunch just “because.” Sometimes it’s just a good idea to buy your team lunch as a thank you for their hard work. Whether you have a team working at an office, store, or remotely, you can get creative and find a way to make it happen. And as a bonus, you can even eat together no matter where your team works.

As you continue to manage your business through difficult economic times, it’s critical to keep your eye on your employees. People are social creatures by design, so find ways to connect with your employees by leveraging the resources and opportunities all around you. Take the time to recognize and reward your employees and you’ll be sure to see engagement increase and potentially a more robust bottom line.