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Small Business Owners: Repairing Your Credit

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Thinking of starting a business, but your credit score is shot? It is possible to turn things around.

Secured credit cards are a good option for people trying to repair their credit scores. For secured cards, the card owner is required to make a security deposit that the card issuer can use to pay the debt if the owner gets behind on the bill. This is not a debt card, where charges are automatically deducted from your account. Use it like a regular card, charge to your account and pay it off monthly. They key here is to pay it off monthly.

Another option is to slowly build your credit score with a low-limit credit card. Low-limit cards typically come with a maximum credit line of under $500. Be warned, these types of cards come at a very high cost and should only be used as a last resort. The Credit Card Act of 2009 caps first-year fees to 25% of available credit. But, of course, issuers find ways of getting around that cap. Then there are the high processing fees and annual fees, much higher than standard credit cards. These could cost you $95 to process your application and $100 or more in annual fees.

Pay close attention to how you manage your debt. Pay your bills on time and, eventually, your credit score should improve. Once you have your feet under you, don’t fall back into bad financial habits.

Should you find yourself in over your head with a mountain of debt that is causing you stress and keeping you up at night, contact Cossitt Law at 406-752-5616. The staff at Cossitt Law is committed to helping clients untangle their most complex debt issues while protecting their best interests.

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