If your business has suffered in the past and you need to find credit cards, you may be able to locate a few companies that will offer you a line of credit. Bad credit credit cards are typically for individuals, but there are resources to help you find bad credit business credit cards for your business.
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Sometimes, businesses run into financial problems and use business credit cards to get them out of a jam. However, it can be challenging to find credit card companies who will extend the olive branch and give you a credit card. Challenging, but possible!
More than likely, you will need to start with reputable places that won’t take advantage of you by charging you incredibly high interest or astronomical fees. They may even offer to increase your credit if you continue to build your business in a positive manner.
Start with the Small Business Association and get a list of credit card companies that have offered credit cards to small businesses in the past. They usually advertise this as a specialty. This is an excellent resource to tap, especially if you have less than 50 employees.
If you cannot locate a credit card company that will extend a traditional type of credit card to your business, you may be able to find secured or prepaid credit cards. They do pretty much the same thing, but have different limits.
What is a secured credit card?
A secured credit card is issued to an applicant who may have displayed less than stellar credit ratings from the top three credit bureaus: TransUnion, Experian, and Equifax. If you have not been able to convince a credit card company to issue a standard credit card for your business, a secured credit card is a good replacement.
The credit card companies that issue secured credit cards want you to re-build your credit and will allow you to deposit a certain amount into a dedicated account that you can draw from using the card they provide; the amount you deposit becomes your maximum balance.
As you manage your account, your information is consistently reported to the credit bureaus. If you continue to maintain a low balance, pay in full and on time each month, your credit rating will increase. Your credit card company may then elect to issue you a refund for your deposit. Your credit card may then become an unsecured card and considered a loan from the credit card company.
What is a prepaid credit card?
A prepaid credit card is different from a secured credit card because it is not reported to the credit bureaus and a credit check is not required. Prepaid credit cards are like bank debit cards because you are only entitled to spend the amount of money that is in the account. You are safe from over drafts, but you will not gain any positive credit ratings.
Using a prepaid credit card can help your business get out of debt because you are balancing your budget each time you use it and the money is not borrowed. You are also able to deposit, or load the credit card any time you want.
Prepaid credit cards often come with various fees associated with them like ATM transactions or point of sale purchases. Before you agree to accept a prepaid credit card, read everything to ensure you have full understanding of your financial obligations.
How can I raise my businesses credit score?
First, find out your true score by logging onto the Internet to receive your free annual credit report. In accordance with the Fair Credit Reporting Act, you can receive free credit report every twelve months. Take this information and review it very carefully. You need to verify every negative vendor and confirm that the report is accurate. If you find discrepancies, you must alert the credit bureau immediately.
You can dispute your discrepancies in three ways, online, by mail or telephone. You will need to follow separate steps depending on the method you choose. If you dispute online, you will be guided through the process and provided with a case number so you can follow-up if necessary. Mail disputes take the longest; the approximate turnaround time is 45 days.
Once you submit your dispute, you must wait to be contacted. The credit bureau will reach out to the reporting vendor to verify their data. They complete the necessary investigation, make corrections to your file (if applicable), and provide you with the resolution.
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