Understanding your Credit Score and Credit Report

Jan 24, 2014

Credit affects everything you do later in life. Buying a car, putting down a house, and running your own business. It is important to understand how to monitor and track your own credit score and credit rating. The following common questions will help you to understand credit reports so you can stay on top of your own credit history. If you don’t follow up on your credit reports, you may find yourself in a position of being considered high risk for a credit processor.

What is a credit report?

The first thing you need to understand about your credit report is that it’s not a constantly changing number. The best way to think of it is to think of it as a snapshot of your credit rating, but not a constantly running video. When a lender pays for a credit report to be run on you they are generating the report at that time, not accessing a report that’s constantly held regarding your credit history.

What’s in a credit report?

A credit report shows your credit and loan accounts, the balance owed for each, and the payment history for each account. Any unpaid or past-due bills, even phone bills and non-credit contracts can show up in your credit report as a red flag. Your credit score is based on the information contained in your credit report.

How can you see your own credit report?

You can check your request for your own credit report to check your credit score. Checking your own credit report does NOT hurt your credit score. When you check your own credit report you are making what is called a ‘soft’ inquiry. If you or a lender just checks your credit report it’s called a ‘soft’ inquiry.

Who else can see my credit report?

Lenders or potential business partners that you may do business with can pay to have a credit report run for you. When an inquiry is made in response to an application you’ve filed then the inquiry is called a ‘hard’ inquiry. Too many hard inquiries at the same time on your credit report CAN lower your credit score meaning it’s important to mind the number of lenders you are applying to at the same time.

How can I fix bad credit?

Bad credit is a reality in business and finances. If you have bad credit it can feel as though you’re at the bottom of the credit well without an escape rope. The time-tested method for fixing bad credit or recovering from bankruptcy is to make payments, even if it’s the minimum, on time over an extended period of time.

If you discover fraudulent information on your credit report file a complaint with the Consumer Financial Protection Bureau so that they can contact the credit report agency to resolve the problem with your credit report.

 If you have bad credit or if you have declared bankruptcy it’s important to know you’re not lost in the woods forever. There are alternative sources of funding available for business owners saddled with bad credit. If you are in such a position explore carefully to find the interest rates that best suit your business and industry. Managing your credit score is important in a credit-based economy. If you are in a high-risk credit processing business then understanding the workings of credit reports is even more vital. Protect yourself, protect your business. High-risk individuals with regards to credit history are walking on thin ice, as are those who do business with them.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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