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Tracy Becker
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In 2009, the US government passed the CARD Act, stating a child must be over 21 or have a steady income before they can be considered for their own, personal credit card/line.  

The CARD Act has helped prevent the frivolous use of credit by forcing young adults to wait until they are more responsible and financially secure before opening their own credit card; while it is important for a young adult to be fiscally responsible and understand the value of a dollar before opening their own line of credit, it is equally important to note that an individual’s age of credit history can have a significant impact on their personal credit score.  That being said, adding your child as an authorized user on your line of credit can have a positive effect on a child’s personal credit score once they are able to add primary accounts.  This can help them stay ahead of the curve later on in life. 

One of our clients’ recently considered adding his daughter to his line of credit as a gift for her tenth birthday.   He asked us if it would help her credit now.  It will not help her right now but could in the future.  Without primary credit in her name the score formula will ignore the authorized user accounts and they will not add any value.  Once she has primary credit in her name the authorized user accounts will be computed into the FICO score formula.  The open dates will become a part of the average age of credit and scores will increase.  If the parent has high balances and poor payment history on the account it could negatively impact the scores.

Read more: https://www.linkedin.com/pulse/young-adults-credit-scores-tracy-becker-fico-pro?trk=prof-post
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The FICO® SBSS℠ Credit Score is used by the SBA and over 7,000 lenders when extending business loans. 


What is the FICO® SBSS℠ Credit Score?
The FICO® SBSS℠ Credit Score is used by the U.S. Small Business Administration and over 7,500 business lenders to assess the risk level associated with businesses applying for term loans and lines of credit up to 1 million dollars. The FICO® SBSS℠ Credit Score system is customizable and generates a faster score and as a result, many lenders, including the SBA, are using it as a tool to pre-screen and approve business loans. 


How does the FICO® SBSS℠ Credit Score work? 
The FICO® SBSS℠ Credit Score categorizes small businesses by the likelihood that they will make timely payments. It ranges from 0-300 with the higher credit score reflecting the lower risk. The score is based on the principal(s) FICO® personal credit score, information compiled by business credit bureaus and other commercial data (age of business, payment history, amount of employees, assets and revenue, etc.). 

Personal Credit Scores are tabulated by using information gathered by the three major credit bureaus, Experian, Equifax, and TransUnion; whereas business credit scores are tabulated by using information compiled by business credit bureaus, including Dun & Bradstreet, Equifax, and Experian.  The FICO® SBSS℠ Credit Score system allows lenders to accrue a personalized score based on their own priorities. The lender may prefer a certain business credit bureau, in which case they can customize the generator to drive information from that bureau first.  If the data is revealed to be limited, the generator will automatically pull from the next two business credit bureaus consecutively.  The lender can also have the generator place a greater emphasis on a personal credit profile instead of other credit factors; that is, they can opt for the personal credit profile to be considered as the highest determining factor when generating a score. 

How does it impact businesses?
The minimum FICO® SBSS℠ Credit Score threshold used for approvals by the SBA pre-screening is 140 to date, however, most lenders have adjusted their threshold of approvals to be between 160 - 180; This means that if a firm has any derogatory information or has minimal business credit, the principal(s) only chance of gaining a minimum FICO® SBSS℠ threshold of 140, would be to have exceptional personal credit. 

According to the Finance Index represented by bQual, the majority of franchise brand owners such as Checkers, Jamba Juice, Lenny’s Sub Shop, etc. reveal an average FICO® score of 748.15, an average FICO® SBSS℠ Credit Score of 191.38 with average liquid assets of $158,760.  This would be the ideal candidate to thrive as a franchisee making them a more attractive candidate to a lender and a franchisor. 

The impact of a poor to average FICO® SBSS℠ Credit Score can cost a business pricing on financing or a rejection on loan approval. Without this much needed financing, a business could fail or be forced to stay stagnant.  Plain and simple; most lenders are using The FICO® SBSS℠ Credit Score to quickly determine if providing a loan to a business is worth-while.  Lenders are not required to disclose that they use the FICO® SBSS℠ Credit Score generator and very few business owners have even heard of the FICO® SBSS℠ Credit Score. Until now, there have been nearly no resources available to explain how the score impacts a business’s ability to qualify for funding and as a result, business owners are left helpless and in the dark. 

The truth is, the market is changing; new technology and a fast-paced work world have contributed to a more competitive market. Maintaining an up-to-date and reputable credit profile is crucial for a business to maintain itself; a derogatory mark, an average personal credit score or a limited business credit profile are all contributing factors that can result in a lender’s decision to deny funding. 
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Check out the North Shore Advisory Inc. LinkedIn page for up-to-date information on personal and business credit repair! 
400 million+ members | Manage your professional identity. Build and engage with your professional network. Access knowledge, insights and opportunities.
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The holiday season is here! With that comes gift shopping which without care can lead to poor credit scores.

At this time of year we are all so used to hearing the same old song from the department store clerk singing the words, "If you open a store card today you will get an extra 30% off of your purchase".  Well that sounds great but is it really?  Let's take a look.
 
 
Not only does opening a new credit card cause a third party credit review which can drops credit scores but it also impacts your average age of credit making it younger.  Younger credit means higher risk and a drop in credit scores.  If a mortgage applicant is at a 740 credit score and two new accounts are opened during Holiday shopping the 740 score could drop over 50 points.  Depending on the loan amount the difference between a 740 credit score and a 690 credit score could be hundreds and thousands of dollars more over the life of a 30 year loan.   It may also mean a rejection.  To recover back to the original average age of credit could take years.  Be sure to share this with your loan applicants or potential home buyers so they are aware before they start opening new credit cards.
                                                               
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Tracy Becker

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Building Diversified Credit Accounts on Credit Reports can Increase Scores

Most credit scoring systems define our level of risk to a lender by reviewing both our payment patterns and our ability to manage credit. From the information gathered by the three major credit bureaus a score is then formulated for each bureau. Most mortgage lenders take the middle number of the three credit scores and it becomes the indicator of the borrowers risk level. The categories of accounts we can add that make up a credit score are Revolving, Installment, and Mortgages. Revolving credit account balances such as credit cards, overdraft on a checking account, and certain types of lines of credit have the most dynamic influence on scores. The closer the outstanding balance gets to the limit the more the scores can drop. Because this type of credit allows the borrower to decide how much they will charge (up to the limit) and what payment they will make (no less than the minimums) the lender has a clearer view of an individual’s ability to manage credit. Installment credit which can include student loans or car loans or leases has a set monthly payment and needs less decision making or management skill. This is also the case for most Mortgage credit. Therefore, high mortgage or installment debt ratios have less of an impact on credit scores than do revolving credit ratios. Mortgages are the hardest type of credit to qualify for and more points are added to scores once these types of loans become seasoned. Seasoned credit is over one or two years old.

Age of credit is a factor used by the score formula and the older the average age of credit the better it is for credit scores. However, timing of applying for and opening new credit is key. Make sure you are opening new accounts years in advance of applying for a loan to give enough time for accounts to season and add points to scores. By opening many accounts in a short period of time scores can plummet due to reducing the average age of credit substantially.

When building a new business, the first 5 years are critical to a firm’s success and usually there is little or no profit. Some businesses are able to get financing based on their receivables but this may be at a high cost. In most cases if the business owner has excellent personal and business credit they can get the necessary credit related financial tools at lower pricing.
Of course if accounts are paid late or not paid at all credit scores will also drop dramatically. Collection accounts, late payments, and other delinquencies will reduce credit scores and outweigh positive credit building.

Aside from this it can be of great value to have one of our credit experts review any credit report challenges you come across. Getting the right feedback or help can be essential to the success of loan approval as well as good customer service. We are always available and well equipped to give individuals/business owners insight into what strategy would deliver the highest credit scores.
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The Experian Credit Bureau Hacking Is Not Just A One Time Event
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Tracy Becker

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New York based national Credit Restoration & Education Company, North Shore Advisory, Inc. has helped thousands of individuals and companies throughout the United States for over 25 years. Founder and President, Tracy Becker, a Certified Expert Credit Witness, Certified Fico Professional, and established author (check out her latest book, Credit Score Power), has lead her …
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Learn more about FICO credit scores!
For professionals that serve those purchasing real estate or seeking financing we know firsthand how confusing and frustrating credit and scoring can be. W
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What is a "consumer dispute statement" on credit reports?  Can it increase/decrease credit scores and interfere with loan approval?

When an individual decides to review their credit and attempt to work on improving it they either challenge the validity of the credit history with the bureaus or directly with the creditor. This process may cause consumer dispute statements (CDS's) to appear on credit. Initially, when a negative account is disputed it will be taken out of the score formula or be calculated differently for a period. This change in calculation can cause increases in credit scores until verification by the creditor and the credit bureau is complete. The same applies to good accounts but scores can drop.
 
When the initial verification is complete the account will be corrected or verified as accurate. If the consumer continues to dispute the account a notation that the consumer disagrees/disputes the account is placed on the credit report. This can continue to alter the score and removal is more complicated.
 
Most loans will not be approved by a lender or will be kicked into manual underwriting if a CDS is pending or unresolved on credit.  Most loan professionals (LP's) are aware that a CDS can inhibit their ability to get a loan closed but may not realize the reasoning behind it.
 
Lenders want to price loans correctly with the true level of risk reflected. An accurate score prior to pricing and extending financing is of primary concern which is why these CDS's  can be important.
 
A quality credit repair company will explain this to LP's when changes to a client's credit are complete.  They will also advise the LP when new reports can be pulled for credit score accuracy.  By conferring with the LP they remove CDS's that can cause issues for approval and  give the green light for all to advance forward with loan application.  Unfortunately, there are many dispute factory type credit repair companies and even consumers that randomly dispute with no strategy into how these dispute notations will impact loan approval and successful timing of a closing.

If you need any credit advice or feedback feel free to reach out to North Shore Advisory, Inc. Credit Repair Experts.
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How do personal and business credit scores and indexes vary?

Although they are both extremely important, here are some differences between personal and business credit that many fail to realize:

For personal credit, FICO scores are the leading score in the consumer banking and scoring world. FICO scores can reflect the history of credit profile for many years with the last 5-6 years of delinquencies impacting the score the most. On the other hand, with business credit Dun & Bradstreet credit scores may reflect delinquencies, but it is not the date of the delinquency that matters most it is the amount of debt owed plus the delinquency that would be meaningful to how the scores fluctuate and show greater risk.

FICO scores will clearly show each creditor name and account number where as Dun & Bradstreet trade lines do not reveal the name or account number of the creditor. If you have a problem with a delinquency posted on your D&B report it could be very difficult to find out which creditor posted the misinformation.

For a lender to review your personal credit you must give your consent. Anyone can pull a Dun & Bradstreet credit report on a business without consent.

FICO scores do not reveal the income or financial status on the credit reports. Dun & Bradstreet will report current financials if the information is public or if the business requests they be reported.
Many businesses are harmed because they don't realize these differences. Since anyone can review business credit reports without getting consent from the company it is very important to keep current credit at its best. Potential lenders, vendors, and accounts could be evaluating credit and making decisions that will impact the profits and success of a company.
How do personal and business credit scores and indexes vary?

Although they are both extremely important, here are some differences between personal and business credit that many fail to realize:

For personal credit, FICO scores are the leading score in the consumer banking and scoring world. FICO scores can reflect the history of credit profile for many years with the last 5-6 years of delinquencies impacting the score the most. On the other hand, with business credit Dun & Bradstreet credit scores may reflect delinquencies, but it is not the date of the delinquency that matters most it is the amount of debt owed plus the delinquency that would be meaningful to how the scores fluctuate and show greater risk.

FICO scores will clearly show each creditor name and account number where as Dun & Bradstreet trade lines do not reveal the name or account number of the creditor. If you have a problem with a delinquency posted on your D&B report it could be very difficult to find out which creditor posted the misinformation.

For a lender to review your personal credit you must give your consent. Anyone can pull a Dun & Bradstreet credit report on a business without consent.

FICO scores do not reveal the income or financial status on the credit reports. Dun & Bradstreet will report current financials if the information is public or if the business requests they be reported.
Many businesses are harmed because they don't realize these differences. Since anyone can review business credit reports without getting consent from the company it is very important to keep current credit at its best. Potential lenders, vendors, and accounts could be evaluating credit and making decisions that will impact the profits and success of a company.
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In her circles
782 people
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William E. Nassour's profile photo
thi le ha nguyen's profile photo
Dan Ruiz's profile photo
Thenote Factory's profile photo
Rick Bennett's profile photo
Tyre Realty Group's profile photo
Laurie Furness's profile photo
John Bennett's profile photo
Patricia Horoh's profile photo
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Owner and founder of North Shore Advisory Services, Inc. Study, analyze, decipher personal & business credit and scoring systems. Share knowledge with professionals about scoring systems and credit to provide them with cutting edge information for their clients. Have and continue to increase/improve credit scores dramatically (40-280 points) for consumers & companies to help them save in interest on loans, lines, leases, etc. Lead clients to present themselves in the most attractive light to lenders and creditors for varied types of financial products.
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Credit, Leadership, Public Speaking, Mortgage Lending, Negotiation, Social media, Loans, Customer Service, Management, Sales, Credit Analysis, Strategy, Fiance, Credit Scoring, Problem Solving, Team Leadership, Sales, and more
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Tracy Becker, Fico Pro
Introduction
For almost 25 years, I have owned and operated a Credit Education and Restoration Company. With an intense desire to help individuals/businesses reach their credit goals I have developed and cultivated an impeccable reputation and level of success. My company is known in the banking, real estate, accounting, & financial industry for our boutique style credit repair services which are second to none. Our credit improvement process has manifested results in as little as 20-40 days with increases as much as 40-150 points. With close to 25 years of credit expertise and experience in business, rest assured that with our programs clients will be getting the services of an expert staff committed to working towards their credit goals. We will use our vast experience to tailor a strategy which will offer the best possibility of producing results. North Shore Advisory, Inc. does not outsource personal information to third parties or offer any type of financing as many companies do. And because we stand by our record of excellence, we don't bill for personal credit repair for simply trying. We only bill for items we improve or remove. That's our guarantee.

I enjoy Public Speaking across the country where I educate bankers, CPA's, realtor's, financial planners, and all kinds of professionals, helping them find solutions to credit problems. I am a Certified Fico Professional and trained as a Credit Expert Witness with expertise in personal and business credit. I have published two books most recently, "Credit Score Power". I am also consistently interviewed for both national Television & major news publications where I regularly write/contribute. I am “The Credit Coach” for “Eye on Real Estate” a popular WOR710 AM radio show as well as the credit coach for Douglas Elliman.

Contact me: tracy@northshoreadvisory.com
And listen to me twice per month on the "Eye on Real Estate" radio show with host Dottie Herman CEO and President of Douglas Elliman: http://lnkd.in/wFT_Jh
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@tracybecker