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Many people, especially small business owners, have damaged personal credit. This incredibly stressful situation can arise from myriad circumstances, including a mistake on someone else’s behalf. You’d think that the wealth of information at our fingertips (courtesy of the Internet) would make bad credit less common but this doesn’t appear to be the case. One possible explanation is that most online articles about improving personal credit are fairly rudimentary. They regurgitate the same basic fundamentals that anyone with a credit card has been aware of since the day it came in the mail. This suggests that these are the only ways to fix damaged credit, as if the reader’s outlook wasn’t already pessimistic enough.

Fortunately, it turns out that there a number of things you can do aside from simply making payments on time or cutting down on expenses. Here are six rules for rebuilding personal credit:

1. Get Non-Biased Information

Rule number one for any major change on your horizon is to make sure you are listening to the right people. Once you have ascertained that you are receiving non-biased information from experienced professionals, you will feel much more secure about every move you make from then on. So, before taking any sort of action, ask yourself if you legitimately trust the source of the advice you are about to follow. Do you have any reason not to trust this source?

At United Capital Source, we’ve found that non-biased information isn’t exactly easy to come by these days. You may have spoken to someone who tried to convince you to get a credit card or take out a business loan when, in reality, this wasn’t beneficial for your long-term financial health. This is why one of the first things we tell new clients is that whether they choose to work with us or not, our only intention is to help their businesses succeed. The information we provide is solely meant to make business owners more knowledgeable about business financing, as opposed to selling our products.

2. Pay High-Interest Debts First

When you have multiple debts to pay off, it’s usually best to focus on those with the highest interest rates. Paying off high-interest debts before moving on to low-interest debts ultimately reduces the total amount of money you have to spend to become entirely debt-free. If possible, you might want to consider increasing your monthly payment for higher-interest debts.

3. Consider Consolidation

Debt consolidation isn’t for everyone, but this doesn’t mean it should be taken off the table altogether. It’s typically meant for people who are looking to pay off multiple credit cards with somewhat similar interest rates. Someone might have one credit card with 30% interest and another credit card closer to 20%. Transferring the latter credit card will likely save a significant amount of money over the long-term. Debt consolidation can also make it much easier to remember payments.

4. Try To Negotiate Rates

A common trait of successful business leaders is not being afraid to ask for better rates. This applies to suppliers, electric companies, and credit card vendors. Hearing “no” over and over again doesn’t mean you will never hear “yes” the next time around. And even if you do hear a “no” from your credit card vendor, you’ll still feel a lot better knowing you asked rather than wondering what the outcome would have been.

5. Look Into Bad Credit Business Loans

There’s a myth that the first step to fixing bad credit is avoiding all forms of debt. Yes, you probably shouldn’t buy a new car or accrue more debt on your credit cards. But paying off an appropriately-sized small business loan is one of the quickest ways to build your credit score. Companies like United Capital Source regularly approve numerous business loans with bad credit (business line of credit, merchant cash advance, revenue based business loan) for applicants with poor or little credit history. The terms and repayment structure are realistic for your financial health and will not make it difficult for you to cover other monthly business expenses. Depending on the program, just a few months’ worth of business loan payments could dramatically improve your personal credit score.

6. Check Credit Score Periodically

Some people have credit cards that allow them to view their credit scores several times per year. Others are only able to check their credit scores for free once a year. But once a year is much better than never. Even people who have never missed a monthly payment and have very little debt should check their credit scores periodically. The introduction of this article alluded to peoples’ credit scores dropping due to someone else’s mistake. Unfortunately, this happens all the time. But if you catch these mistakes shortly after they occur, you can minimize the damage and bring the score back up.

The bright side of bad credit is that fixing it makes you a better business leader. It’s very similar to what happens when you apply for and pay off a small business loan. You emerge with a stronger knowledge of your finances, a more sensible spending plan, and the assurance that you will never find yourself in the same situation again. Remember: It’s moments like these that separate the successes from the failures. Plenty of successful business leaders dealt with debt-related problems, but it’s how they reacted to them that made them who they are today.

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