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Why Business Financing Is Important To Companies

Why Business Financing Is Important To Companies

Business financing is an essential service that benefits both start up companies as well as established entities needing help. Small, as well as medium, as well as big companies can benefit from this service. The funds can be used for many different things that are related to the building up of the business.

Banks are the primary institutions which deal with this kind funding and they usually have specific specialized departments dealing with this. Professionals dealing with this are normally called business bankers and are specialists in this area. They typically hold banking qualifications comprising studies such as economics and financial management and statistics. This enables them to have the technical skills needed to do the job.

However there are other financial institutions that offer this service and usually operate as niche players. You can find both private as well as public funders and they tend to have more or less similar qualification criteria. There are certain differences though because their founding premises are not the same. The private players have making profit as their main goal hence they will tend to have higher repayment rates. While public sector players tend to have a developmental agenda of helping especially small businesses and budding entrepreneurs. Therefore the latter usually charge next to nothing in interest on their loans.

Furthermore there are those that operate as parastatals aimed at helping those individuals or companies operating business within the public sector domain. These businesses may be operating within the public domain but might also have profit making as their other focus. They are usually in partnerships with government to provide services to communities that the government do not have the expertise to provide.

Funds can be used as seed money to start up a business from scratch. The money is used to take care of activities such as finding office space and buying furniture and stationary. Salaries for critical staff responsible for helping with initial operations can also come from these funds. Business cards and access cards as well as staff apparel can also be taken care of by this seed money.

Small to medium companies usually use this funding to strengthen their operations when things get tough. They can also use it to fund expansion plans that need a large investment that they might not be in a possession of at that particular moment. If the business is doing really well they might start needing bigger premises and to hire more staff.

Refurbishments and relaunching cost a lot of money that might not have been budgeted for. The funds can be used for this purpose to revitalize and strengthen the image and brand of the company. Road trips and exhibitions can be financed and accommodation for staff might need to be rented.

Financing institutions typically have different types of products aimed at the different types of companies and ventures. Some ventures might be risky which will attract high interest rates because of the risk involved. But the positive is that a company can get a product that is tailor made specifically for them.…

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Influencing Positive Changes With Sustainable Finance

Influencing Positive Changes With Sustainable Finance

Sustainable finance has emerged as one of the most promising and optimistic trends in the finance sector. It is said to be playing a key role in shaping our society’s future by combining financial goals with socially responsible behavior. Where some investors are showing concern for the environment, they are worried about the effects of certain products on the society. Even though the vision of responsible investment varies to a great extent, the end result is the same.

The concept of “Double Bottom Line” is one of the main causes of why many investors are uncertain about recognizing sustainable finance. According to them, combining financial goals and social responsibility requires additional investment. However, if recent studies are to be believed, socially responsible mutual funds and indexes have showed outstanding performance through the years. This establishes the fact that you don’t need to compromise on profit making if you make responsible investments. In recent years, several major investment and commercial banks have also started taking social and environmental concerns into consideration for business. Even their stakeholders are of the view that investors should demonstrate more responsibility towards the businesses they are financing.

Sustainable finance has been considered vital for the accurate transaction management and portfolio of any company. Even though several investors are addressing sustainability and environmental impacts of their operations, a lot more still needs to be done. Sustainable finance needs to be implemented especially in affected environments and communities. Financiers must adopt more than just good intentions. They must follow strong policies that have been applied across all departments and practice leadership in their sector and society, respectively.

During the 1990s, UNEP Finance initiative was launched by the United Nations Environment Program. This global partnership of 170 finance companies and UNEP was targeted towards a better understanding of the environmental and social aspect of financial performance. In a nutshell, efforts are being made globally to embrace a modern approach instead of the traditional investment policies. Even though the rate of socially responsible investments is relatively small, it is becoming more influential. It is essential to make more investors aware of integrating social concerns when making investments.…

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7 Things You Will Need to Know to Start Your Business

7 Things You Will Need to Know to Start Your Business

In this article, I will explore the essential things to consider prior to starting a business. There are a number of different things I could write here, but I want to use my past experience to write what I consider to be the most important things for your business.

1) Absolute faith in what you are doing – People often start a business and become disillusioned when the honeymoon period is over for their new business or when they realize there are roadblocks to their achievement. It is crucial to know where you are going an not allow yourself to be shaken by obstacles in your path. Train your mind for success and you will get past these challenges.

2) A business plan – The more clarity you have on where you are going the more likely it is you will get there. A business plan is essential to getting to where you want to go and it is needed when proposing to get investors for your business idea. Have a mission statement of what you want to accomplish with your business. It will help you through when times get rough.

3) Financial means – Some businesses require a larger financial investment than others. Whether you have the money or not, it is smart to find ways to get money outside of yourself for your business. By attracting investors or loans, you can get the money you need. Just make sure that you do not take on more debt than your business can produce.

4) Tax and asset protection strategy and assistance – Ensure that you set yourself up with the proper entity for your business to avoid risking your personal assets in a lawsuit and from ending up with high tax bills at the end of the year. This is critical to the survival of your business.

5) A strong marketing plan – Create a direct response marketing plan that allows you to track your results and keep your costs low. The more creative you become, the more potential customers you will attract to your business.

6) A business that can be systemized – We all only have 24 hours in a day. By creating a system that can run without you there, you can leverage your time and truly grow wealth. The Internet is a great asset in accomplishing this.

7) Absolute persistence and a desire to help others – When things get tough, you will not only need faith, but a drive to finish what you started. This becomes easy when you know your business helps you fulfill a greater purpose for your life and helps to improve the lives of others.

You can start a profitable business that will succeed. Be honest with what you want to do and dedicate your efforts to its success no matter what.…

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Building Your Deal Team – Assembling the Right Players

Building Your Deal Team – Assembling the Right Players

Thinking about selling your company, buying a competitor, or maybe raising capital? You need a deal team with the right mix of talent and experiences to get the best value and to assure the transaction happens. As economic activity is starting to pick-up, some small and mid-sized companies are testing the waters and seeking to launch strategic initiatives to move their businesses forward. In some cases this means raising capital and in other cases it means partnering with or selling to an investor or buyer with deep pockets or where there’s a strategic fit. No matter what the case, having the right team can make the difference – not just in the value and quality of the deal, but whether you actually get the deal done.

So, before you jump into a transaction and start negotiating, make sure you have the right players on your side –

1. Legal Counsel – a critical member of the team. As management considers its alternatives and potential actions, it needs to understand the issues and potential ramifications. Your lawyer should be experienced with transaction structuring and securities law issues, and should be someone whose judgment you value and trust. There are many issues that arise out of the various corporate finance and M and A (mergers and acquisitions, which includes selling a business) transactions. It’s important to have a lawyer who is a “deal doer” as opposed to a “deal killer.” Deal doers have the best interest of the company and shareholders in mind and are focused on completing deals and finding ways to make transactions close. In all deals, there are obstacles and emotions that arise even after the business principals have agreed on the major terms. A lawyer who can think creatively can facilitate solutions to overcome these obstacles.

Though you may have a long and successful relationship with personal counsel that may be strong in real estate, estate planning, or some other discipline, that lawyer may not be the right counsel for corporate finance and M and A transactions. Typically these folks will focus on the wrong issues and spend too much time getting up to speed, the end result being either a poorly done deal or a failed transaction. If current counsel lacks the skills you need to achieve a successful transaction, ask him to help you locate and evaluate new counsel with the right skills; do this before you begin the transaction process, not afterwards.

Having counsel that is known for doing deals and for expertise in transactions can be invaluable in the process and will lend credibility in reaching your goals. Lastly, some law firms have partners that cross over from counsel to an informal investment banker. This is not bad if they have the marketing skills, deal instincts, experience, and available staff time; but it can be problematic if their role is not well understood and defined.

2. Investment Banker / M and A Specialist – if you are selling your company, this role is a must. If raising capital, others on the team may be willing and able to assume the position; it depends on the stage of the company and the type funding required. Investment bankers and M and A specialists are intermediaries that drive the transaction process, help present and market the company and may actively participate in negotiating the deal. You can think of them as the “deal quarterback”. In some cases you will find a strategic advisor or consultant filling this role, which is fine too. The process of a selling a business is reasonably complex and requires an integrated effort of the entire team to get the best results. The key is to have a partner-level professional with transaction AND business experience that understands the entire process, the subtleties, and the inter-related issues and opportunities.

3. Accountants – we use the plural tense because there are usually multiple accountants involved in the process. First there is the need to have financial statements that comply with generally accepted accounting principles (GAAP). Valuations tend to boil down to a multiple of EBITDA (earnings before interest taxes depreciation and amortization) or cash flow. The audit accountant can help your team insure that you have defensible earnings information that will likely be required in negotiating the deal. Without it, you will be operating from a position of weakness and constantly being second guessed by the investor’s or buyer’s team.

Second, there are the tax accountants. Particularly in the sale of a company (vs. financing), there are a number of decisions that can directly impact the eventual after-tax cash proceeds to the shareholders. Your ally and partner in making these decisions is either your tax accountant, which should have corporate finance or M and A transaction …

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What Constitutes True Net Worth?

What Constitutes True Net Worth?

Do you know what you are worth, and is it that important anyway? Net worth is taking center stage as many financial bloggers publicly track theirs’ monthly, and there is even a website, , where you can “track, share, and compare” yours with others on the site. This is taken to a bit of an extreme in my mind, but the sad reality is that most of us are clueless when it comes to knowing our net worth. We blindly acquire assets and incur debt without knowing its impact our bottom line.

So what exactly is net worth? It is the number you get when you subtract your total liabilities [everything you owe] from your total assets [everything you own]. It is a point in time measurement, as it typically changes daily, and is an important financial planning tool….especially when it comes to planning for financial goals. Ideally it should be a positive number, where you have more assets than liabilities. Net worth is an informative barometer of your overall financial health, and in particular the direction it is heading, if you monitor it quarterly or annually.

Unfortunately some people confuse net worth with self-worth, and any discussion about net worth begs the question, “What really is ‘true’ wealth’ anyway?” I invite you to broaden your notion of net worth and want to share some expansive thinking about ‘assets’ and ‘liabilities’ from two mentors I have studied with.

One mentor, Spencer Sherman, financial planner and author of The Cure for Money Madness, offers a unique tool for assessing net worth from a more holistic viewpoint, what he calls Actual Net Worth. For example, we so often take our health for granted, which is actually our most precious asset. Sherman challenges us with the question, “Would you prefer to be a sick billionaire or a poor person in excellent health?” Given that most of us would prefer the latter he surmises that health must have a monetary value. So in addition to the monetary assets included in a traditional net worth statement, Sherman’s Actual Net Worth worksheet includes “human assets” such as health, potential lifetime income, untapped skills and creativity, friends and family, and service to the world.

Another mentor, Mark Silver, who teaches a course entitled, The Heart of Money, questions the concept of “liabilities” in a similar way. He views financial debt as a “dependency” on others for a service or item previously provided. He asserts that all of us have liabilities/dependencies even if they are not financial in nature. He asks us to examine our lives and find areas of dependence where we owe something that feels emotionally uncomfortable to us or where we feel ‘indebted’ in some way, and how this is impacting the “net worth” of our lives.

Approaching ‘net worth’ in this holistic way keeps things in perspective and provides an opportunity for us to embrace ALL our assets, as well as an opportunity to evaluate the ‘cost’ of carrying non-financial liabilities in our lives. It also reminds us that focusing purely on money as a measure of ‘net worth’ is an overly simplistic and potentially devaluing vantage point.

Financially Smitten Call to Action for YOU today:

Visit Spencer Sherman’s website and download his Actual Net Worth worksheet. It is available for free on his home page by clicking here. Take some time to complete it and reflect on what it’s like to know your actual net worth number. Then, consider any non-financial liabilities, or “debts” you are carrying that are diminishing your ‘bottom line.’ Are there any situations and/or relationships that feel like ‘debt’ to you-in time and/or energy? What steps do you need to take to unburden yourself from this indebtedness?…

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Factoring Without Recourse Explained

Factoring Without Recourse Explained

Factoring agencies are now the kingmakers of the business finance world, and it would seem that many companies have managed to succeed only with the assistance of these agencies. You have to hand it to the factoring agencies, they really know how to market themselves, and how to make a solid impression. Through a careful blend of strategic marketing and the provision of quality services, the factoring agencies are now the de facto rulers of the business finance market.

One of the worst mistakes a business owner can ever make is to assume that all factoring agencies are created equal, and that they all have the same requirements, and provide the same quality of service. This is a highly competitive market (bordering upon cutthroat) and so this means that the business owner will be able to find the factoring agency that most closely suits their current needs and requirements.

Eager to save money, wherever and however they can, many business owners have actively sought to hire only those factoring agencies that provide factoring without recourse services. But what exactly is factoring without recourse?

The nature of factoring is such that the client will sell their invoices to the factoring agency who then assumes control and responsibility for the collection process. With factoring without recourse, the factoring agency will assume all the risks as well, and so in the event that a customer specified within an invoice does not pay up as and when required, this bad debt stays with the factoring agency. In effect then, the client company will be able to wash their hands of any bad debt.

On paper and in theory, it would seem that this is a very one-sided benefit, in that the client company has the assurance of not only the work being carried out for them, but also ensures that they do not need to contend with the risk of a customer defaulting on the terms of the loan. In reality however, the factor will try and claw back their money in some way, and so they will either charge a higher commission for the services they provide, or they will provide a smaller quality of service.

In addition, a factor that provides factoring services without recourse will also typically be less forthcoming and generous with the amount of money that they provide to the client company upon initial delivery of the invoices in the first instance.

There are some types of industries and markets whereby factoring services without dependence upon recourse is not only normal, it is downright essential, and so the factoring agencies involved in such markets are generally more accommodating. Some markets that are so affected in this manner include the freight and delivery market.

Ultimately, the final decision can only ever be made by the business owner. Only they will be able to weigh up all the facts, along with the benefits and drawbacks of each of the various methods of factoring, and then make a decision based from there.…

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Beyond Market Multiples: Increasing the Value of Your Company Before the Sale

Beyond Market Multiples: Increasing the Value of Your Company Before the Sale

Great news! After a long drought of M and A activity, the market for private companies is showing signs of life and recovery. If you own, operate or advise a middle market company, $5 million to $500 million in revenue, what does this mean for you and your clients when thinking about shareholder liquidity or selling the business? And how can you improve the odds of getting a deal done?

From a private equity perspective, the dollars invested in middle market companies more than doubled from 2009 to 2010. Publicly traded strategic buyers like the S and P 500 companies have historical levels of cash, and are seeking to deploy part of this hoard to generate significant revenue through external growth initiatives like acquisitions, which can provide access to new customers, higher margin product lines, new technologies and entrepreneurial talent. The same concept applies to what private equity refers to as tuck-in or bolt-on acquisitions for larger existing portfolio companies.

While the number of transactions is increasing and appears to be rebounding, the character of the market and deals is different from that of the pre-great-recession vintage. In the period of 2004 to early 2008, there was significantly less scrutiny in underwriting and financing transactions. Today, the performance bar has been raised high with a flight to quality. Transactions are being done with only the very best industry players within a market; and these companies are able to garner valuation multiples at nearly 2008 levels. However, the average and lower performing businesses will likely find greatly depressed multiples, or worse, no interest from buyers or investors at all.

Thus the quandary – what is the typical middle market company to do to create a partial or complete exit for its owners? Here is an approach that has proven successful in increasing the value of a company before the sale and enhancing the likelihood that a transaction will occur:

1. Start the process by clarifying the objectives and desires of the owners. The game plan for creating an exit needs to be aligned with the ambitions of the shareholders. For example – are any of the shareholders active in the business, and if so, do they want to continue with the company? An important part of this step is to align the expectations of the shareholders by gaining a realistic understanding of the current value of the business based on the reset-rules of the economy and the company’s recent performance.

2. Determine how the company really compares to the industry – in terms of financial performance (i.e. profit margins, sales growth rates, productivity, etc), competitive position, growth strategy, customer base and concentration, and talent. In effect, conduct what a buyer may call “strategic due diligence” on your business and grade your performance.

3. Shore-up the fundamentals. Why sell your company and leave untapped value for the buyer? Value that you can realize by making some of the predictable improvements that a buyer will make, but do it before you sell. Develop and implement initiatives to address the gaps and weaknesses uncovered by the diligence mentioned above. This step, by itself, can create a significant premium in value for the average business. Keep in mind that making performance improvements takes time it may take from a few months to over a year to complete; so plan a head.

4. Think about your business from the buyer’s perspective. Your company is an investment. What is the growth opportunity and strategic value beyond today’s numbers? Even with your house in-order and a strong foundation, what investments could be made by management if more capital was made available to further increase the value of your business? What actions can the business take to validate this new investment opportunity and to reduce the associated risk? Being prepared to answer these questions, having pre-thought the outcome and taking steps to make it real, can allow the shareholders to sell the business not just on the value of today, but to capture and participate in the value creation moving forward.

The overall objective in positioning for an eventual sale, recapitalization or ownership transition is to address the low hanging fruit, in terms of operational performance and strategic position, and shore-up the critical value drivers, fundamentally making the business stronger. And, in the process identifying the longer-term investment opportunities for the business; the break-out strategies; and the initiatives that will allow for geometric increase in value if the company has access to additional capital. This then allows you to lead the sale process with a robust investment opportunity beyond the foundation that exits today.…

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Business Equipment Finance

Business Equipment Finance

When starting out a new business one of the things you need to consider is the overheads. This is a problem at the start of the business, when you have yet to make any money from your great idea and yet need to buy all of the initial equipment you’re going to need and promise a regular salary to any employees. While the latter point will come down to just how good that business plan of yours is, and probably come from an investment of your own cash; the purchasing of equipment needn’t present any cost for you upfront. How you ask? The answer is through business equipment finance, which will enable you to spread the cost of your equipment over several months or years (whatever suits you personally) in exchange for a small amount of interest, thereby negating the necessity for large investments up front.

This is useful for many reasons and minimizes the risk slightly while leaving you more cash free to funnel into marketing and HR. Furthermore it means that you can avoid cutting corners and select the most high-spec and high-quality equipment that will provide the biggest investment by lasting longer before it needs replacing. You may even be able to buy in bulk and save yourself a lot of money in the long run. Get loan repayment insurance and invest the money you save and you can kit your business out with the very best equipment with no risk. As you begin to succeed in the world of business you will start to recognize that the best business models are often those that require the least amount of investment up front.

Now that you’ve chosen business equipment finance to fund your business equipment and supplies, you need to start thinking about the kinds of things you’ll need for your business. Obviously this will depend largely on the type of business you’re running – for a bungee jumping company you might want to invest in a lot of rope while this won’t really be that useful if you’re setting up a management consultancy company.

There are however many things that will be useful no matter what your business trades in. The most obvious of these are computers, and you will most likely want one per individual in the company. While you may think this is an area you can save money on by going for lower-spec models you’d be wrong and would only end up having to update them shortly after. This is because software will be designed to run on the latest machines, and once a new operating system comes out that your old processors and RAM can’t handle you will be unable to use the latest versions of Microsoft etc which will lead to much wasted time converting files and downloading freeware to mimic the newer software. Likewise you will need to invest in the latest software, with Microsoft Office most likely being at the top of the list, though many in the publishing industry now use Macs for their user friendly interface.…

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The Right Business Finance Package For the Right Business

The Right Business Finance Package For the Right Business

Business finance is customarily a main detail when it comes to starting a brand new business, growing an established business, or maybe purely up holding the particular quality of business. Business loans are regularly made out to be a negative action from the business owner though if operating right it may in fact become a salvation of the business along with its repeated development along with its productivity.

Any business owner may well come up with a numerous inspired visions as well as strategies although if your lacking the correct business financing, it is possible that even the finest laid strategies can, and generally will, go skewed. When a business owner is dealing with the situation of whether there is acceptable money obtainable to complete the vital practices accurately operate for the business on a daily basis, it will simply generate havoc over the future.

It is most important that the business owner possesses the capacity to access sufficient funds to be able to be at ease so they can set up certain systems as well as operations crucial to becoming a promising entrepreneur. Fairly often, it is the business loan which delivers such clarity for a entrepreneur so as to permit you to continue on focusing with the elemental factors of the beneficial commerce operation.

Options of loans intended for business loans involve the secured business loan or the unsecured business loan. The secured business loan it is required that the business is able and willing to offer collateral against such finance. Such collateral may be in the way of land, buildings, and/or machinery. Offering collateral automatically makes it easier for the business in gaining favor in the eyes of a loan agency. This customarily results in certain rewards for a business owner. Those rewards could be in the form of length of duration of your loan, interest rates, penalties along with postponement requirements, furthermore a variety of added terms and conditions. Keep in mind, if choose longer loan period the repayments will be of smaller amount thus there are certain rewards to it.

Alternatively, a unsecured loan can have various benefits for the recipient of the loan. Such rewards can include a smaller amount of paperwork, quicker decisions by the finance agency, in addition to support for a business owner that is incapable of offering collateral of any kind. Regularly, in spite of this, the settlement time for this style of business loans is shorter also pretty often, interest rates possibly will be greater.

Prior to applying for a business loan of some type, the entrepreneur wants to be ready as well as prearranged. It includes arranging every one of business finance paperwork such as tax returns, profit and loss statements, balance statements, and also a few added items that could be called for from a financial organization. If you are more prepared you can be, the better your impression to the lender. Loaning agencies enjoy thinking the people they are loaning money to can be reliable and prepared. Your ability to submit the lending agency with all paperwork that is required in a well-timed manner plus in a prepared fashion will certainly aid in enhancing the view to a lender.

Hence, borrower’s needs to keep in mind that business loans are proposed to earn you money, instead of cost the business funds. Which means that all the funds that you borrow have to be spent sensibly with the purpose that every single cent is spent in increasing your earnings exponentially? Thus, an organized filing practice plus frequent analysis of the outflow in addition to earnings can be fundamental in making sure that the loan is going towards correct use within several areas business.

The old motto of it takes money to make money is really isn’t so far-fetched and also actually applies to business loans as well. As well as, a thinking process of spending other people’s funds to produce your personal cash might too be exceptionally beneficial to a business owner.

Lenders are keen to produce business loans to entities that can establish themselves to be trustworthy as well as a beneficial risk. Which is done as a result of having an attractive business design in place in addition to ordered, helpful commerce finance papers obtainable for scrutiny of the loaning representative(s)? In the situation you is willing to provide your loaning organization all necessary documents, furthermore if you have thought out the effect that the extra income may cause to your previous income, in that case most likely, you are a serious contender for the business loan.

Thus, business loans are able to in reality put riches in your pocket – a lot additional if they are used in a way which increases the drive in …

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It is Fun to Know More About Your Credit Score!

It is Fun to Know More About Your Credit Score!

Your credit score is a valuable asset in modern times. It influences your financial life all the way. The more you know about it, more you will succeed financially. Very few people know exactly how it is calculated. Here are some interesting facts for you:

1. Why it is called FICO – Your credit score is based on the date collected and analyzed by a company called Fair Isaac Corporation. That’s why it is called FICO score.

2. What is its importance – The score tells your creditors the extent of risk they will take if they lend you money. If you have a high score, creditors are comfortable lending you more money. But if you have a lower one, they will assume that the chances of getting their money back are less. You may then face tougher terms like higher rate of interest or shorter repayment periods.

3. The score is divided into five parts – Various aspects of your financial details make up the total credit score. You history of re-payments, credit presently enjoyed by you, and duration of your credit history, things like this will hit your credit score.

a. Your history of payment – Your prospective creditors want to know whether you pay your bills on time or not. This is a very important factor for any creditor and 35 per cent of the score will be based on this factor. Even if you are not regular in paying your utility bills, it will reflect on your score.

b. The ratio of available credit – Your utilization of available credit will show how much ‘needy’ you are while applying for a loan. If you have used your credit cards to the fullest, it will hit your score badly. This will be taken as a sign of weak financial position. 30 per cent of your score is based on this ratio.

c. Duration of your credit history – If you are enjoying credit for a long time without any repayment problems, you are a good customer. 15 per cent of your score is made up of this factor. So it is advisable to hold on to credit cards which you got long ago, even from your student life!

d. Your expectation of credit – The amount for which you are applying for a credit will also be an important factor. 10 per cent of your score is made up on this basis. While applying for a big mortgage, all your other debts will be considered to find out whether you are a risky customer. Once you get such mortgage, your score will lower immediately as a consequence.

e. Type of credit used by you – Credit is after all considered as debt but there are grades of credit. If you have low or no interest credit cards, that is considered as good credit. If you are paying a good percentage of principle out of your loan regularly, it will be taken as a good sign as you are making the repayment quickly. The final 10 per cent of your credit score is calculated on this factor.

4. There are some strange things which will affect your credit score. For example, if you are late in the payment of your library dues, this fact may be reported on your credit report and it will immediately lower your credit score! You may miss out on payment of a bill from your doctor under the assumption that your insurance cover will take care of it, and it will hit your score! You should be very careful about such accidentally unpaid invoices and should make prompt efforts to resolve them.

5. The number of credit cards you hold will also affect your credit score. Many people are just fond of collecting more and more credit cards as a hobby! This habit may prove costlier for them as they may get tougher terms.

Your prospective lenders will determine on the basis of your credit score whether you are an eligible customer for them on not. So it is important for you to protect it from all these hardships. It is just like your baby and you need to take extra care to see that it grows bigger and healthier.…