Fair Isaac, the company that develops the formula to determine credit scores looks at the average statistics of consumers and factors that into your score, called a (FICO). According to Fair Isaac the average consumer will have:
One inquiry on their personal credit report in a given year
54% of credit holders carry a balance of less then $5,000 on all debts other then a mortgage
Have access to $12,190 on all credit cards combined
Now are entrepreneurs, like you, the typical consumer? I asked one of my clients (J.G.). No., said J.G.. You will see that as an entrepreneur, we have several more credit needs then the average consumer. So when the personal credit bureaus compare us to the average consumer, our credit consumption is not normal. Which is why your credit score lowered since starting your business. That’s not fair said J.G. My reply, If you don’t understand how the system works, you’re right.
Let’s look at J.G.’s situation. He has applied several times with suppliers for various credit lines over the last year. Each inquiry will likely drop his credit score approximately 5-10 points. The credit...
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