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September 17, 2019

The Complete Guide To Credit Scores

Your credit score is a number that tells creditors and other third parties how risky it is to lend money to you. Did you realize (and not everyone does) that three separate credit bureaus evaluate your credit? Or that there are multiple scoring models used to interpret the data provided by each of these bureaus?

If you own a business, you will likely be working with many different credit providers. So you need a decent understanding of how credit scores work. We’ll guide you through the world of credit scores, how they are calculated, and how you can improve yours.

What Are Credit Scores?

As I said, your credit score, a number ranging from 300 to 850, is used to assess the likelihood that you will repay your debt. This is why banks and other lenders use it to determine whether or not to lend to you.

So just what information goes into determining your credit score?

The number one factor in determining your credit score is your payment history. After all, what better way to determine the likelihood you’ll pay your bills on time than to look at whether or not you have a history of doing so?

Other factors that affect your credit score include:

the amount of time you’ve had credit (the longer, the better)
the types of credit you have (credit cards, mortgages, loans, etc.)
your total debt burden
your credit utilization ratio (your current debt divided by your credit limit)
the number of hard inquiries on your credit report

What Is Considered A âGoodâ Credit Score?

It’s important to note that there is no single official standard for what constitutes a “good” credit score or an “excellent” credit score. Every credit-evaluating institution has its own standards, but there is some general agreement on what constitutes a decent score and what does not.

Merchant Maverick assesses credit scores as such:

Poor: 300 – 579
Fair: 580 – 639
Good: 640 – 739
Excellent: 740 – 850

Why You Have Multiple Scores

You might think that your credit score is one specific score compiled by one scoring institution. However, this isn’t the case.

As it happens, there are three different credit bureaus — TransUnion, Equifax, and Experian — and each one evaluates your credit independently of one another. These credit bureaus gather information about you and your finances while compiling this information into credit reports. By law, you can request a free copy of your credit report from each credit bureau once per year. However, these reports do not actually contain your credit score — just the information your score is based on.

When evaluating you for credit risk, most lenders will check your FICO score. The FICO score was first developed in 1989 by the Fair Isaac Corporation. It uses the data in your credit report from one of the three credit bureaus and assigns you a score based on the FICO scoring model. Just know that your FICO TransUnion score may differ from your FICO Experian score or your FICO Equifax score. That’s because the three credit bureaus may not have the same information about you (a lender may report to one credit bureau but not another). So the FICO scores produced by each set of information may differ a bit.

FICO isn’t the only credit scoring model out there, however. VantageScore is a competing credit scoring model — one used by most free credit score websites. VantageScore weighs your personal financial history somewhat differently than FICO does. Your VantageScore may differ from your FICO score, even when the data comes from the same credit bureau. However, the differences won’t be dramatic (payment history is highly influential in both models). If your VantageScore is in the “good” range, your FICO score is likely to be as well.

Why Your Credit Scores Are Important

For better or worse, your credit scores play a significant role in determining your access to credit. If your credit score falls short of what your potential creditor wants to see, it could imperil your ability to get a mortgage or an auto loan.

Your credit scores not only determine your ability to access credit — they also determine the quality of the credit you can access. For instance, with a poor credit score, you’re likely to qualify for only the most basic of credit cards. These credit cards usually carry higher interest rates than the cards available to those with better credit scores.

Likewise, you’ll be subject to a higher interest rate on a loan if you only have a mediocre credit score than you would with an excellent credit score. Additionally, with a lower credit score, a bank may compel you to make concessions to obtain a mortgage — concessions you wouldn’t have had to make with a higher score.

If you’re running your own business, access to credit is of paramount importance, making it all the more critical that you maintain a decent score!

Next Steps

Now that you know what goes into determining your credit scores and how they can affect your life, how can you track and improve your credit score?

Check Your Credit Score For Free

As I said earlier, you can request a free copy of your credit report from each of the three credit bureaus once a year. However, these reports do not contain an actual score. Thankfully, several websites offer free access to your credit score (typically your VantageScore). These sites may also offer other services, such as credit monitoring, notifications when something new appears on your credit report, credit card recommendations tailored to your particular credit profile, customized advice to improve your credit, and more.

Check out our article on the best free credit score sites to get a thorough rundown of the leading credit score services.

Learn How To Improve Your Scores

Advice such as “pay down your credit card debt” sounds somewhat tin-eared since people tend to take on debt only out of necessity, especially these days. However, the fact remains that doing so is the quickest way to have a positive impact on your credit score. Paying down credit card debt does this in two ways: it reduces your overall debt burden, and it improves your credit utilization ratio. Getting a credit line increase is another action that will boost your credit utilization ratio and, in turn, your credit score.

Another way to potentially improve your credit score is to go over your credit reports and dispute any errors that you might find. Credit bureaus make mistakes — in fact, it’s one of the arguments against their primacy in determining Americans’ access to credit — and it’s not uncommon to see an improvement to your credit score after successfully disputing a mark on your credit report. Unfortunately, there are three different credit bureaus whose reports might contain damaging errors.

Check out our guide to disputing errors on your credit report if you think one of the credit bureaus may be doing you wrong.

Other ways to improve your credit include applying for a new credit card and keeping old accounts open, even if you aren’t using them. Both of these actions positively impact your credit utilization ratio. Just remember, nothing helps your credit score as much as missing a scheduled debt payment will hurt it, so prioritize paying your bills on time over all else.

For more on credit scores and how to improve them, check out the following links!

5 Ways To Improve Your Personal Credit Score
How Long Does It Take To Improve My Credit Score?
Business Credit Scores: The Complete Guide

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August 23, 2019

The Step-By-Step Guide To Getting A Business Credit Card

Getting your company a business credit card could be a great step towards saving money. Between their business-centric rewards and tangible benefits, business credit cards provide numerous avenues for hanging onto your green stuff. On top of the money-saving aspects, credit cards can provide other boosts, like improving your credit score or making big purchases without needing to worry about paying interest.

But how does one exactly get a business credit card? While the answer is fairly easy, it isn’t straightforward. That’s why we at Merchant Maverick have crafted this guide. It will take you through deciding why to get a business card all the way through the application process.

Read on through to find out how to get a business credit card!

1. Decide Why You Want A Business Credit Card

There are plenty of reasons why you may want a business credit card. For starters, you might want to apply for a card to save money via a rewards program. Or perhaps you’ll want to take advantage of various benefits, like employee cards or travel credits. Cards can be also be used if you are making a large purchase and need to carry a balance; however, you’ll want to make sure you get a card with a 0% APR introductory rate so you won’t pay more than you have to.

Many cards also offer forms of zero liability — which helps provide a buffer between your money and a fraudster who has stolen your data — and purchase protection, a way to recoup costs if a recently-purchased item is stolen or damaged. These benefits mean that buying with a credit card may be safer than using your bank’s debit card.

Regardless, you won’t want to apply for a business credit card just to have one. If you do plan on getting a card, you’ll need to make sure you can pay off your bill every month. If you plan on carrying a balance, you should understand the costs and other pitfalls associated with not paying off your monthly charges in full.

2. Check Your Credit Score

Before you actually apply for a credit card, it’s a good idea to check your personal credit score. Even though you’ll be applying for a business credit card, issuers will still check your personal history to make sure you are a good candidate.

Credit scores are tools that help determine the health of your credit. While they don’t show the complete picture of your credit history, they do shine a light on how trustworthy you might be with a line of credit. As such, issuers heavily consider your score when you apply for a credit card.

Both major scoring models (VantageScore and FICO) publish scores that range from 300 to 850. In general, an excellent score is 740 or above, good ranges from 640-739, fair from 580-639, and poor is 579 and below. Your score is tabulated via a variety of factors, including payment history, percent of credit used, accounts’ lengths, and types of credit. For a full breakdown on just what a credit score is, read our post about how long it takes to improve a credit score

Luckily, it’s free and easy to check your score online. You’ll simply need to visit one of these websites, fill in your info, and then your score should be generated. Sites like Credit Karma and WalletHub also offer credit monitoring — a handy feature if you’re looking to improve or maintain your credit score.

If you have poor or bad credit, you still may be able to find a card that fits your credit score. In many cases, issuers offer secured cards for low-credit users. There are even a few non-secured options around — like the Capital One Spark Classic for Business card.

3. Look For Credit Cards With The Right Features

Credit cards come with an array of reward programs and bonus features. In the world of business cards, these rewards and features are often targeted towards the general spending habits of small businesses. However, no two businesses spend alike. Credit card issuers know this and many offer numerous types of cards with differing rewards schemes and benefits. With such diversity, there is likely one card out there that will match the way your business spends its money.

You’ll need to decide which type of rewards scheme will fit your business best. If you travel frequently, a card that offers miles for rewards may be your best bet. If you’ll be buying office supplies, gas, or taking clients out to lunch, a points business card may be better. Straightforward cash back credit cards are also an option — they work great for businesses that have varied spending habits.

Credit cards also offer an array of additional features outside of their base rewards scheme. In the business credit card world, most features are targeted towards frequent travelers. This means that potential bonuses include airfare credit, complimentary flight and hotel upgrades, concierge services, travel insurance, and TSA PreCheck/Global Entry credit. If traveling isn’t your thing, you may still benefit from other features like employee cards, extended warranty, purchase protection, or cell phone insurance.

These extraneous benefits probably won’t make or break a card for you. However, they’re still very much worth considering because they could end up saving your business money and time.

As mentioned above, if you have a low credit score, your options are limited. Despite this potential handicap, you should still be able to find a secured credit card to fit the bill. Note that in most cases, secured cards lack any sort of rewards program. While this could be frustrating at first, if you manage payments smartly and improve your credit with a secured card, you’ll be able to upgrade to a better card in the future.

4. Collect Business Documents & Information

After you’ve decided on a business credit card, you’ll want to gather up the necessary information to apply. This way you can fill out the application with relative ease. As mentioned above, issuers do consider your personal credit history, so the information you’ll need to gather is both business and personal in nature.

Common information required on a business credit card application may include:

Business’s legal name, address, and phone number
Business’s tax identification number (also known as the Employer Identification Number or “EIN” — learn how to find or request an EIN in our guide)
Type of business and its structure
Business’s annual revenue
Business’s estimated monthly spending
Business’s age
Role in the business, as well as number of employees
Personal income
Name, address, phone number, and date of birth
Social security number

Once you have all this info handy, you can then move onto the application process.

5. Apply For Your Credit Card

After you’ve picked out a card and gathered your important information, you can finally apply for a credit card.

In most cases, issuers have online applications. You can also often apply via mail or phone.

Assuming you’ve already assembled your information, the application itself should be a breezy process due to the fact that you’ll just be filling out a form with the necessary info. In some cases, you may be approved within seconds of finishing the application. Other times you may need to wait a week or so to find out because the issuer will be reviewing your details.

Note that you may need to wait for up to 14 days before you actually receive your card. Once you get it in the mail, you’ll be able to activate the card and start using it for purchases.

Getting a credit card for your business can ultimately save you money. Through a card’s rewards and benefits, you may find that this little bit of plastic fits into your business’s spending routine perfectly. Plus, smart spending with a credit card can help build your credit, potentially aiding your business down the road when you need to apply for a loan or other lines of credit.

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August 21, 2019

The Best Side Hustle Ideas You Can Start On Your Own

Has the 9-to-5 world of gainful employment left you unsatisfied, either emotionally or financially? If so, have you ever given thought to starting a side hustle?

Maybe you have talents you want to monetize but you just haven’t come up with a concrete business idea to properly tap them. Maybe you’ve been longing to start a side business for a while but just haven’t gotten to the planning stage yet. Or maybe you’re just looking to make some extra cash on the side to supplement your income. Whatever your inspiration, if you’re considering launching a side business, it never hurts to be presented with a list of ideas — and that’s what we have for you in this article!

But first, let’s establish a few things.

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Whatâs A Side Hustle, Anyway?

When we refer to “side hustles” and “side jobs”, we’re referring to ways you can make money that don’t involve quitting your day job. After all, if your hustle fails, you don’t want to be left high and dry without the means to support yourself.

However, we’re choosing to focus on side business ideas over other methods of supplementing your income. For one thing, our focus here at Merchant Maverick is on the needs of small businesses. For another thing, many of these alternate means of support leave a lot to be desired.

A Side Hustle Doesnât Have To Mean Entering The Gig Economy

When you start a side business, you’re building something that potentially can bring you life-changing revenue in the future and open up new professional opportunities. However, the typical gig economy job cannot offer this.

Gig marketplaces often end up paying below minimum wage after you factor in the uncompensated expenses involved. For instance, Uber and Lyft drivers are on the hook for car maintenance, gas, and rideshare insurance, all of which combine to limit a driver’s take-home pay. These (and other) gig platforms also take a service fee out of what you earn for each job. The gig economy may provide opportunities for you to make some money on the side, but these opportunities tend not to be very empowering.

Likewise, you may have considered launching a blog or becoming a YouTube personality as a way to make money on the side. There’s nothing wrong with building an internet presence and monetizing it — in fact, I wrote an article a while back about how to monetize a website/blog — but it’s not what we’re focused on with this article. It’s true that with some talent and a lot of persistence, you can build your online presence up to the point where you can monetize it and generate substantial revenue. Don’t expect a lot of success in the immediate future, however.

Side Hustle & Side Job Ideas That Anyone Can Start

Let’s explore some side hustle ideas that can empower you to take your future into your own hands — all without quitting your day job.

Caregiving For The Elderly

As our population skews ever older with time, demand for caregiving services is only going to increase. If you have an affinity for the elderly and a generous heart, you could try setting up a side business caring for seniors. Of course, it helps if you have some experience in this field, as you’ll need plenty of credentials to get started — licenses, training certificates, first aid/CPR training, etc.

You’ll also need to undergo a background check and have some quality referrals. For more information, here is a list of caregiver training requirements by state.

Babysitting & Child Care

As parents work longer and longer hours to cover the cost of raising children, demand for childcare services is higher than ever. With this in mind, you might want to try opening a daycare center, either from your home or from a dedicated daycare facility.

As daycare regulations are state-specific, you’ll need to check with the relevant agency in your state to determine what training and credentials you’ll need to run a daycare facility. You’ll likely need CPR and child-specific first aid training. If you’re operating a daycare somewhere other than your home, you’ll need liability insurance, and you’ll likely need to be licensed by the Department of Health and Human Services.

If you’re running a daycare center from your home, you won’t need liability insurance to get your license, but you should consider getting some type of small business insurance anyway.

Pet Services

We are a pet-loving people. However, we also tend to spend a lot of time at the office, which means there is plenty of demand for services that care for our pets in our absence. Why not start a pet-related side hustle and cash in on this growing market?

Here’s just a sampling of the pet-related side jobs you could look into:

Pet-sitting/doggy daycare
Pet grooming
Obedience training
Dog walking
Pet photography
Dog pooper-scooper service
Pet toys/clothing
Pet treats

Licensing and certification requirements obviously aren’t going to be as stringent as they are if you’re in the business of caring for people. However, having the proper credentials for things like obedience training can make your side business more appealing to your target audience — after all, people love their pets!

Don’t be too shy to distribute flyers advertising your services to other pet-related businesses in your area.

Arts & Crafts

Here’s a side hustle you can start with some skill — and without the need to earn certifications or licenses. Sites like Etsy have shown that there exists a massive market for handmade arts and crafts.

If you have a talent for creating arts and crafts, you might have the makings of a side hustle. The most important aspect of setting up such a business is determining where you should sell your works to best target your market. Does the demographic you’re targeting attend community events and craft fairs? Or would you be better served offering your products on Etsy (or even your own online storefront)? Once you sort this out and you’ve generated a decent amount of works, you can make some money doing what you love.

Direct Sales

Did you ever get taken to a Tupperware party or an Avon party as a kid and think “hey, I could sell this stuff”? If so, you could try your hand at being a direct sales representative. If you’ve got a little salesperson in you and you want to avail yourself of some free products, it’s not a bad side hustle idea. No licensing or certification required!

It’s true that there are plenty of shady multilevel marketing (MLM) companies operating in this space. However, companies like Usborne, Scentsy, and Pure Romance are relatively reputable. But remember: becoming a direct sales representative is a good way to earn some extra money on the side, but it’s not likely to grow into something that can replace your day job.

Offer Your Freelance Services

Let’s say you want to make some money using the skills you’ve developed at your day job. Or perhaps you’ve got some latent skills just waiting to be monetized. Why not try freelancing in your spare time?

Whether your specialty is writing, graphic design, bookkeeping, tutoring, or hairstyling, there will always be a demand for freelancers. You can freelance independently, though you’ll need some solid professional connections. Alternately, you can join a freelance platform in which individuals and organizations can search for freelance workers based on their skills and experience. Just be aware that these platforms can take significant cuts of what you earn at the end of the day. Research the platform beforehand so you know what to expect in this regard.

Furniture Restoration & Flipping

Here’s an idea out of left field. Did you know you can make money finding cheap/old pieces of furniture (garage sales and Craigslist are good sources for that), restoring them, and selling them for a profit?

With a little experience and some good paints and sealers, you, too, can turn discarded pieces of furniture into items people will gladly pay for. Just make sure the furniture you’re refurbishing is structurally sound and is made of actual wood. When furniture has a quality skeleton, it’s ripe for flipping.

You can sell your restored furniture on your own — perhaps from a Facebook Business page. You can also sell at flea markets or even work on consignment.

What Do You Need To Start A Side Business?

I laid out the steps you should take when developing your side hustle idea in How To Start A Side Hustle: A 7-Step Guide, but here are some essential points:

Get some honest feedback regarding your side business idea from somebody with experience in the field in question before going through with it
Plan out how you’d like to promote your side hustle
Determine what training, certifications, and insurance — if any — will be required in the pursuit of your side business
Determine how much money you’ll need to invest upfront (and make sure that investment won’t put you in the poor house)
Don’t be discouraged if you don’t find immediate success

Software For Your Side Hustle

If you’re going to run a successful side hustle in today’s world, you’re almost certainly going to need business software. You’ll want to create a website to promote your services (and to offer ecommerce if that’s the nature of your side hustle), accounting software, and possibly email marketing software.

When preparing to run your side business, consider the following programs, each of which Merchant Maverick has tested and reviewed for business suitability. (Business software happens to be our specialty)

Wave: Cloud-based software for accounting, expenses, and invoices â the base software is free, while the payroll, payment processing, and bookkeeping components are paid services
QuickBooks Online: Cloud-based accounting software with payroll, payment processing, workerâs compensation insurance, and a custom invoice template
QuickBooks Self-Employed: Cloud-based tax software for freelancers
Square: App-based software with invoice, mobile POS, inventory, and website creation features
Weebly: Easy-to-use website builder with ecommerce support â works seamlessly with Square
Canva: Cloud-based design software â easier to use than Adobe products; doesnât require much design knowledge
MailChimp: Cloud-based email marketing software

How To Finance Your Side Hustle

Business credit cards are probably the most common means of financing a side business. You can also try obtaining a loan, though you should be wary of taking on too much debt at this stage. You don’t want your side hustle to end up causing lasting damage to your personal finances.

Here are some links to help you in your quest for financing!

The Best Business Credit Cards Of 2019
20 Tips To Improve Your Business Loan Application
How Much Money Do You Need To Start A Business?
How To Start A Pet-Sitting Business
How To Start And Fund An Online Boutique

Is It Time To Get Your Own Side Hustle?

Whether for personal fulfillment or just to earn some additional revenue, more people are attempting side hustles than ever. We put together this article to show you that side hustle opportunities extend far beyond the exploitative “gig economy”.

When done right, a side hustle can not only supplement your income, it can also develop into a bona fide self-sustaining business that can eventually replace your day job.

Now go out there and do the hustle!

Square is a great way to accept credit cards for a side hustle

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Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

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August 20, 2019

How To Start A Side Hustle: A 7-Step Guide

So you’ve had thoughts of starting your own business for a while now. Unfortunately, life keeps getting in the way. You’ve got bills to pay, a job to perform, and relationships to maintain. Yet you remain unsatisfied by working for “the man” and don’t want your entrepreneurial dreams to wither on the vine.

Your discontent may grow to the point where you’re ready to just ditch your day job and go all-in on your business idea, throwing caution to the wind. While I don’t want to throw cold water over your entrepreneurial dreams, you probably shouldn’t go about following your bliss this way! After all, most new businesses fail, and many successful entrepreneurs have a failed startup (or three) in their past. If you quit your job and bet the farm on a startup that fails, you won’t be in a position to try again — you’ll be too busy picking up the pieces of your life.

The truth is, many successful companies begin as side hustles. Starting small but allowing room for growth gives you a chance at ultimate success while ensuring that if things don’t go according to plan and your side business fails, you’ll still have your primary source of income, setting you up to try your hand at entrepreneurship again.

Let’s go through the seven steps to follow when starting a side business while keeping your day job!

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Step 1: Find A Great Idea

When considering how to start a side hustle, think about the skills you’ve picked up at your current job. You may well have acquired marketable skills in your current position that could form the basis for your new business. With a set of monetizable skills, you can always offer consulting services to those seeking the knowledge you already possess.

Of course, if you’re not passionate about your current job and what you’ve been doing there, you should probably try something else. If your side business doesn’t involve something you love to do, you’re less likely to maintain the commitment you’ll need to see it through. Besides, who wants to start a business doing something that doesn’t bring joy or satisfaction?

As you run through ideas, consider whether or not you know anybody with experience in the field in question — somebody who could possibly recommend your services to others, or perhaps somebody who can give you honest feedback about the viability of your idea for a side business. Whatever it is you want to delve into, you’ll want to get some measure of validation beforehand from people with expertise in the subject.

Looking for some specific examples of businesses you could start? Check out our piece on side hustle ideas!

Step 2: Make A Plan

When laying out a plan of action, commit to setting aside a certain amount of time per week that you can devote to building your side business. This will almost certainly involve some tough choices. If you spend lots of time each week playing video games or reading your Twitter feed, those are obvious places to cut back. However, if you truly want your side hustle to grow and thrive, you’ll likely have to make some harder cuts. Going out with friends, going to the gym, taking a morning jog before work, even sleep — these are all things you may have to reduce if you want to give your business the attention it will need.

Hey, nobody said this was going to be easy!

Depending on the type of side hustle you’re considering, look into the requirements for running a business in your chosen field. Consider whether you’ll need any certifications to establish your qualifications or any insurance for protection. On that last point, check out our article detailing the types of insurance you might need when launching your business.

If you’re considering starting a freelance business, you may want to look into accounting software that can help you with creating contracts, such as AND CO. I should note that Square provides template contracts, free of charge.

Step 3: Seek Financing

Before your side hustle becomes profitable and self-sustaining, you’ll need to cover the costs of getting it off the ground. Inventory, software, a website — these things all need to be financed. You’ll need to set a budget and seek out funding sources.

Getting a business credit card is perhaps the most common means of financing startup expenses. You can also try taking out a loan. If you do, you may find it easier to obtain a personal loan (which can be used for business purposes) than a bona fide small business loan. Just be wary of taking on too much debt at this stage. You’ll have to pay off any debt incurred, lest your business foray result in lasting damage to your personal finances.

Another potential source of capital for your side hustle — a resource more commonly tapped than most entrepreneurs like to talk about — are your friends and family. Again, make sure you can pay them back — you don’t want a business failure (remember, failure is incredibly common in this arena) to imperil your lifelong personal relationships.

One thing that will greatly simplify your taxes and your accounting is to keep your personal and business financials separate from one another. If you’re able to get a loan, consider setting up a separate business bank account for the funds obtained and using the funds exclusively to fund your side business. Separating your personal and business finances is important if you want to avoid getting audited, among other things.

For more on financing a side hustle, check out the following links:

20 Tips To Improve Your Business Loan Application
The Best Business Credit Cards Of 2019
How Much Money Do You Need To Start A Business?
How To Start A Pet Sitting Business
How to Start And Fund An Online Boutique

Step 4: Find The Right Software

Regardless of the sort of side business you intend to start, you’re almost certainly going to need some business software to keep things running smoothly. It’s exceedingly difficult to run a modern business without accounting software, and you’re definitely going to want to start a website to promote your side hustle and advertise its services (and to offer ecommerce if that’s what your business involves).

Other software you may find useful and necessary includes design software and email marketing software. Thankfully, business software is our specialty. When preparing to run your side business, consider the following programs, each of which Merchant Maverick has tested and reviewed for business suitability.

Wave: Cloud-based software for accounting, expenses, and invoices — the base software is free, while the payroll, payment processing, and bookkeeping components are paid services
QuickBooks Online: Cloud-based accounting software with payroll, payment processing, workerâs compensation insurance, and a custom invoice template
QuickBooks Self-Employed: Cloud-based tax software for freelancers
Square: App-based software with invoice, mobile POS, inventory, and website creation features
Weebly: Easy-to-use website builder with ecommerce support — works seamlessly with Square
Canva: Cloud-based design software — easier to use than Adobe products; doesn’t require much design knowledge
MailChimp: Cloud-based email marketing software

Step 5: Launch Your Business

This is when all your preparation comes to fruition. This is the time to kick your promotion into overdrive. Get everyone you know to like your Facebook Business page and follow your Instagram account, take your website live, and try to solicit referrals and reviews through all your promotional channels. If you’ve built an email list, use it to promote your launch. If possible, include a coupon or some other promotional tool in your email. Depending on the nature of your business, you could even offer some kind of special membership to your initial customers.

You’ll want to leverage every contact you have in the field and convince them to spread the word about your new project. Additionally, look for online communities to join to gain visibility for your business. Naturally, to be accepted in such a community, you don’t want to just promote your business relentlessly. Establish yourself as someone who is helpful and genuine, not someone just out to make a quick buck!

If there’s any aspect of your business that you don’t feel equipped to take on, delegate the work to an employee (or business partner, or contractor). Focus on where your strengths lie.

Step 6: Prepare for Setbacks

As I said in the introduction, running a successful business — on the side or not — is quite difficult. So much so that the vast majority of new businesses no longer exist after five years. As such, don’t be discouraged if your side hustle doesn’t find immediate success.

It’s quite common to experience cash flow issues with a new side business. Here are a few articles containing helpful information on the subject:

What Is Cash Flow?
How To Calculate And Analyze Business Cash Flow
10 Strategies To Improve Cash Flow

Step 7: Evaluate & Carry On

At a certain point, it should become easier to see what’s working and what isn’t for your side hustle. Ideally, your “hustle” will grow to the point where you can afford to tell your boss to take their job and shove it (or just politely give your two weeks’ notice). To do that, always be on the lookout for ways your side business can evolve and adapt to modern business realities as you gain a greater understanding of the business world.

Maybe there’s a market you haven’t tapped that you could pursue. Maybe there’s a new product idea you can make real. There will likely be opportunities to take your side business to the next level. Just hold off on quitting your day job until your business cash flow approaches or matches the current income from your day job.

A Side Hustle Is Still A Business

Your side hustle may not be your primary focus. After all, you’ve still got bills to pay and health coverage to maintain, so you don’t want to endanger your day job in the pursuit of a dream. Nonetheless, the same elements that translate to a greater likelihood of business success apply regardless of whether your business is your part-time or full-time endeavor.

Bear in mind that it is entirely possible to launch a side business doing what you love and watch it ultimately grow into something bigger. You don’t need to be some annoying Silicon Valley whiz kid rolling in VC cash to build a successful company. Just keep these tips in mind, and you never know — your side hustle just might turn into a thriving company that actually does give you the freedom to quit your day job. And if it fails, well, at least you kept your day job, giving you a financial base from which to give entrepreneurship another try. Plenty of successful entrepreneurs have had businesses fail, so don’t get discouraged if things go south.

Now get out there and hustle! Here are some ideas to get started.

Square is a great way to accept credit cards for a side hustle

Reader	eCommerce	Retail	Food Service

Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial

The post How To Start A Side Hustle: A 7-Step Guide appeared first on Merchant Maverick.

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August 2, 2019

Chase Credit Journey Review: Free Weekly VantageScore From TransUnion

Online services offering free access to your credit score have proliferated in recent years. This growth shouldn’t be surprising to anyone, considering how important one’s credit score has become in determining access to all manner of life opportunities.

Seeing this trend, several banks and credit card issuers have decided to get in on the action, offering free credit score access to customers and non-customers alike. Chase is one such bank. Via Chase Credit Journey, Chase is now offering you free access to your VantageScore from TransUnion, updated weekly. Although accessing this feature is quick and easy for Chase members, you do not need to have any accounts with Chase to use Chase Credit Journey.

Let’s explore exactly what Chase Credit Journey has to offer you and whether or not the service is genuinely free and safe.

What Is Chase Credit Journey?

Chase Credit Journey was launched in 2017 by Chase as a way for anybody — not just Chase account-holders — to check their credit score for free. Your score will refresh weekly, though you can check it whenever you want with no restrictions. Checking your credit score through Chase Credit Journey will not affect your credit score.

Now, you won’t be seeing your FICO score — the score relied on by most creditors when evaluating potential customers. Instead, you’ll be seeing your VantageScore credit score. I’ll go into what that means for you later.

Along with access to your VantageScore, Chase Credit Journey offers the following additional services:

See the following information from your TransUnion credit report (and get Credit Alert notifications whenever any of the following changes):
- New credit inquiries
- New accounts opened
- Address changes
- Account status changes
- Fraud alerts
- Delinquent account notices
- New public records reported on your credit report
Track your credit score changes (you’ll see how your score has changed with each weekly update)
Credit Score Simulator — shows how actions you might take can affect your credit score
See which Chase credit cards you prequalify for

Is Chase Credit Journey Free?

Yes, Chase Credit Journey is entirely free. Chase is a large, thriving banking institution with plenty of other ways to generate revenue!

Can Anybody Sign Up For Chase Credit Journey?

Yes. Signing up for Chase Credit Journey is easier if you’re already a Chase account holder — in fact, all you need to do is click on Chase Credit Journey after you sign in to your account as you usually do. You can also sign up for the service without being a Chase member. You’ll have to verify information from your credit report and enter your Social Security number, however.

Credit Scores & Reports Offered By Chase Credit Journey

The credit score you’ll see from Chase Credit Journey is your VantageScore credit score from TransUnion, one of the three major consumer credit bureaus.

As I said earlier, your VantageScore is not the same thing as your FICO score, which is the score used by most financial institutions — including Chase itself! — when evaluating potential debtors. VantageScore is a newer credit-scoring formula that weighs certain factors differently than FICO when calculating your score. Your VantageScore shouldn’t diverge too much from your FICO score, so it’s still a useful measurement. Learn about the differences between the two in our Merchant Maverick guide to credit scoring models.

I should note, however, that Discover’s free credit score service — called Discover Credit Scorecard — does show your actual FICO score (from Experian, which is a separate credit bureau from TransUnion but is still one of the three big bureaus). On the other hand, with Chase Credit Journey, you’ll get credit score updates weekly, whereas Discover’s service updates your credit score monthly.

Along with your score, you’ll see the main factors affecting your credit — details pulled from your credit report.

You’ll also have access to other important information from your TransUnion credit report — information I detailed in the “What Is Chase Credit Journey?” section of this article. However, you won’t be able to see your full TransUnion credit report. To access your full credit report from any of the three big credit bureaus (TransUnion, Equifax, and Experian), youâll need to go to AnnualCreditReport.com — this site will provide you a free copy of your credit report from each bureau every 12 months.

Other Services Offered By Chase Credit Journey

Chase Credit Journey doesn’t offer as many extra services as, say, Credit Karma or Credit Sesame, but you will have access to a few additional features.

Credit Alerts

As I mentioned earlier, Chase will send you alerts when any of the following pops up on your TransUnion credit report:

New credit inquiries
New accounts opened
Address changes
Account status changes
Fraud alerts
Delinquent account notices
New public records reported on your credit report

Credit Score Simulator

This tool allows you to simulate what will happen to your credit score should any of the following factors change:

Your credit usage
Your number of balances
The age of your credit
Your payment history
The number of hard inquiries on your credit report (remember, when you check your credit score on a site like this, that’s a soft inquiry)

Prequalified Offers

Chase will show you which Chase credit cards you prequalify for based on your credit information. You can also see if you prequalify for a home loan or refinance your auto loan.

I should note that Chase Credit Journey doesn’t offer the same level of free perks as some non-bank-affiliated free credit score sites. For example, Credit Karma offers a service that lets you search for any unclaimed money you might be owed, while Credit Sesame gives you $50,000 of free identity theft insurance coverage.

Final Verdict

Chase Credit Journey is a handy way to keep track of your VantageScore credit score and stay alert to any changes that might adversely affect your credit health. While Discover’s free credit score service lets you see your actual FICO score, Chase’s service updates your score weekly as opposed to Discover’s monthly updates.

Regardless of how well Chase Credit Journey compares to other similar services, there is no risk or downside involved in signing up with Chase Credit Journey, even if you use other free credit score sites as well.

Should you use Chase Credit Journeyâs credit score services?

This service might be a good option if:

You want access to your VantageScore credit score, updated weekly
You want access to Chase’s credit alerts

You might want to use a different service if:

You want access to your credit information from more than just one credit bureau
You want extra features, such as identity theft insurance, in addition to free credit reports and credit monitoring
You want access to paid subscription plans for a higher level of credit management services

The post Chase Credit Journey Review: Free Weekly VantageScore From TransUnion appeared first on Merchant Maverick.

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August 1, 2019

The Difference Between Revolving And Non-Revolving Lines Of Credit

When your small business needs additional capital, it’s not uncommon to turn to a lender to quickly get the funding you need to operate or expand your business. Fortunately, there are many funding options available to small businesses, from low-interest Small Business Administration loans to lines of credit.

For small business owners that want a flexible form of financing, a line of credit is a popular option. When applying for a line of credit, you’ll encounter two options: revolving lines of credit and non-revolving lines of credit. In this post, we’re going to explore the differences between the two. Which option is best for your business? Read on to find out!

What Is A Revolving Line Of Credit?

A revolving line of credit is also known as open-ended credit. A lender provides you with a set credit limit, similar to a credit card. You can make draws on this line of credit as many times as you wish, provided you don’t exceed your credit limit.

Once you’ve made a draw, you’ll begin to repay the borrowed funds, plus interest and/or fees, on a schedule set by the lender. Repayments are typically made once per month or weekly, although this varies by lender. As you pay down your balance, the funds are replenished and become available to use again and again, giving you easy, on-demand access to the capital you need when you need it.

A revolving line of credit can work for any business. However, businesses that have a recurring need for capital will benefit the most from this type of funding. Businesses in the foodservice or retail industry, for example, would benefit from a revolving line of credit because funds could be used to purchase inventory or supplies as needed.

Let’s take a look at an example. A business has been given a line of credit up to $20,000. The business makes a draw of $2,000 from the line of credit. The business pays back $1,000 of the line of credit. At this point, up to $19,000 is available to borrow. The business makes draws of $5,000. Now, the line of credit is at $14,000. Over the next few months, the business repays $2,000. The business still owes the lender $4,000 (plus interest and/or fees) and has $16,000 available to draw.

What Is A Non-Revolving Line Of Credit?

A non-revolving line of credit is similar to its revolving counterpart in a few ways. Instead of receiving a lump sum of cash as you would with a traditional loan, a non-revolving line of credit gives you access to a credit limit assigned by the lender. You can make one or multiple draws on your line of credit provided you don’t exceed your credit limit.

A non-revolving account does not replenish after you pay your balance. When the funds are depleted, the account is closed. If additional funds are needed, you would have to apply for a new line of credit or other financial product.

Let’s take a look at an example. Let’s say that you have a non-revolving line of credit with a limit set at $20,000. You draw $5,000. Your balance is now $15,000. Even though you repay the $5,000 (plus interest and/or fees), your balance remains $15,000. You draw another $10,000, bringing your balance down to $5,000. After making multiple payments, your balance remains $5,000. Once you’ve drawn the remaining balance, the lender will close your line of credit.

A non-revolving line of credit is still quite flexible, Your funds will be available to use as you need them, and you can make as few or as many draws as you need until you hit your credit limit. Any business can benefit from a non-revolving line of credit. However, these funds can be used for a variety of purposes, including hiring and training new staff, purchasing additional inventory during a busy season, or using to fill in revenue gaps.

Revolving Line Of Credit VS Non-Revolving Line Of Credit

While revolving and non-revolving lines of credit are very similar in a lot of ways, there are a few distinct differences between the two. Understanding these differences can help you make the best choice for your business.

Borrowing Limitations

Revolving and non-revolving lines of credit both allow you to make multiple draws as needed up to your assigned credit limit. However, the primary difference is what happens once your credit limit is reached. For revolving lines, funds are replenished as you pay off borrowed funds. Non-revolving lines do not replenish their funds, and the lender will close the account once the credit limit has been reached.

Maintaining Your Account

In most cases, a revolving line of credit will remain open provided you pay off borrowed funds as agreed. You will not have to submit multiple applications to maintain your account. However, the lender may periodically check your credit or the performance of your business to determine if changes need to be made to your account.

If you receive a non-revolving line of credit, your account will be closed once all of the funds have been used. At this time, you can fill out another application to receive another line of credit. However, if your situation has changed (i.e., your credit score has dropped or your revenues are lower), you may not qualify for the same credit limit, terms, and interest rates as you did before, so this is something to keep in mind.

Interest Rates

Typically, non-revolving lines of credit have lower interest rates than revolving lines of credit. However, you should still shop around. Other factors including personal and business credit profiles, annual revenues, and available collateral can also have an impact on your interest rate.

Maximum Borrowing Amount

If you’re looking to borrow a larger amount of money, you might want to consider applying for a non-revolving line of credit. Non-revolving lines of credit aren’t as risky as revolving lines, so lenders often are willing to offer higher borrowing limits to qualified borrowers. Maximum borrowing limits vary by lender — as well as factors including credit score and business performance — so, again, make sure to explore your options before committing to a lender.

Which Is Right For Your Business?

Still scratching your head deciding which line of credit is best for your business? To help you make the right decision, take these factors into consideration.

Borrowing Limits

As previously mentioned, non-revolving lines of credit pose less risk to lenders, so initial credit limits are often higher. If you need access to a higher amount of capital, consider applying for a non-revolving line of credit or even a traditional small business loan.

Use Of Funds

If you need consistent access to cash for purchases like inventory or supplies, a revolving line of credit that replenishes over and over again will be a better fit for your business. If your capital needs are more occasional, a non-revolving line may be the best choice.

Borrower Requirements

You also need to evaluate the borrowing requirements of each line of credit you’re considering. The lines of credit with the lowest interest rates and best terms typically require a longer time in business, a good-to-excellent credit score, and higher revenues. If you have past credit challenges, there are lenders that offer lines of credit based on the performance of your business. Be aware, however, that these lenders often have higher interest rates and/or fees that raise the total cost of borrowing.

Time To Funding

You also need to consider how quickly you need access to cash. There are many revolving lines of credit available that you can access within just minutes of submitting your application. On the flip side, getting a non-revolving line of credit from your bank or credit union may take longer, but you could receive much better rates and terms.

Collateral Requirements

Your revolving or non-revolving line of credit may be secured or unsecured. If the line of credit is unsecured, a specific asset is used to back the loan. This is typically business assets, such as equipment or real estate. If you don’t make your payments as agreed, the lender has the right to seize the property to repay the debt.

If your line of credit is unsecured, it isn’t tied to a specific asset. However, you may still have to sign a personal guarantee or the lender may put a blanket lien on business assets.

Interest rates are typically lower and maximum borrowing limits are typically higher on secured lines of credit. Both revolving and non-revolving lines of credit can be secured or unsecured, so make sure to understand collateral requirements when applying for your line of credit.

Where To Find Revolving & Non-Revolving Credit

With an understanding of revolving and non-revolving lines of credit, you should have an idea of whether or not this is the right funding option for your business. If so, the next step is to find your lender. There are multiple sources available that offer lines of credit to businesses just like yours.

Banks

Many banks offer lines of credit to small business owners. Lines of credit from banks often have the lowest interest rates, minimal fees, and best repayment terms. The downside is that banks typically have the strictest borrowing requirements, so this option is best for established businesses. To get started, visit your current financial institution, or shop around your options at local banks in your area.

If you’re a new business owner or don’t meet the requirements for a business line of credit, you may be able to apply for a personal line of credit provided you meet the lender’s requirements.

Credit Unions

Like banks, many credit unions offer business and personal lines of credit with competitive interest rates. While borrower requirements may not be quite as strict as banks, all borrowers should have a solid credit profile, steady revenue, and meet other criteria set by the lending institution. To apply for a line of credit or other financial product, you must be a member of the credit union.

Alternative Lenders

The internet has made it easier than ever to get the funding you need by connecting you with a network of alternative lenders around the nation from the comfort of your home or office. Many alternative lenders offer prequalification tools that allow you to see if you’re eligible for funding without taking a hit to your credit score. Alternative lenders may have applications that are fast and easy, allowing you access to funds within minutes of hitting “Submit.”

One of the positive aspects of working with an alternative lender is that most don’t have the strict requirements found with traditional lenders. In some cases, the performance of your business is what qualifies you for funding, so personal credit challenges, a lack of business credit, or even a short time in business doesn’t bar you from approval. On the downside, though, you’ll find that interest rates are higher, additional fees must be paid, and terms aren’t as favorable as those that come from banks and credit unions.

Final Thoughts

A line of credit can be a great way to boost cash flow for your business. However, it’s important that you shop around, understand the cost of borrowing, and ensure that a line of credit is the best option for your specific situation. If you decide that a line of credit is a good fit for your business, check out our list of the best lenders that offer lines of credit. If this funding doesn’t seem like the best fit, consider other financial products such as SBA loans, small business loans, or business credit cards.

The post The Difference Between Revolving And Non-Revolving Lines Of Credit appeared first on Merchant Maverick.

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August 1, 2019

Discover Credit Scorecard Review: Free FICO Scores From Experian For All Users

As the cost of living soars and our credit health becomes more important than ever, sites promising free access to your credit score have proliferated to meet the demand. Likewise, many credit card companies had been offering free access to consumers’ credit scores — but only to those with an account with the card issuer or bank in question.

Thankfully, this is starting to change. Enter the Discover Credit Scorecard. This service gives everyone — even those who are not Discover accountholders — the ability to access their FICO credit scorecard for free.

Discover Credit Scorecard not only gives you access to your FICO score — it also provides credit monitoring and Social Security number alerts.

Is Discover Credit Scorecard truly free? And is it safe? Let’s explore the service and answer these questions!

What Is Discover Credit Scorecard?

Back in 2016, Discover became the first major credit card issuer to allow everybody to check their FICO scores on the company’s website for free — not just Discover cardholders.

Along with viewing your FICO score and the factors from your credit report that determine your FICO score — your total accounts, the length of your credit history in years, number of hard inquiries in the past 12 months, the percentage of your credit limit that you’re using, and number of missed payments over the past seven years — Discover Credit Scorecard also alerts you to three different types of new activity that can impact your credit score or signal potential fraud:

Social Security Number Alerts: You’re alerted if your SSN is found on a Dark Web site.
New Account Alerts: You’re alerted whenever any new credit cards, loans, or other accounts appear on your Experian credit report.
New Credit Inquiry Alerts: You’re alerted when new credit inquiries appear in your name on your Experian credit report.

Is Discover Credit Scorecard Free?

Discover Credit Scorecard is completely free. You’ll never have to enter a credit card number, and there are no paid tiers offering access to extra services.

Who Can Sign Up For Discover Credit Scorecard?

Absolutely anybody can use Discover Credit Scorecard so long as you have a Social Security number. You do not need to be a Discover customer. It’s fine if you’ve never even touched a Discover credit card — you can still use the service.

Credit Scores & Reports Offered By Discover Credit Scorecard

The credit score you’ll get from Discover Credit Scorecard is your FICO score from Experian, one of the three major consumer credit bureaus.

The fact that you’re getting your FICO score is significant, as FICO is the credit-scoring formula most often used by banks and other creditors. Many competitors in the free-credit-score space, such as Credit Karma and Credit Sesame, give you your VantageScore credit score instead. While your VantageScore and your FICO score won’t typically differ too severely (and some creditors do use the VantageScore formula), your FICO score is still what most people think of when they think “credit score.” Learn about the differences between FICO and VantageScores in the Merchant Maverick guide to credit scoring models.

Note, however, that you’re getting info from your Experian credit report only, and there are two other major credit bureaus. By contrast, Credit Karma offers access to information from both your TransUnion and your Equifax credit reports, and two out of three beats one out of three. Still, with Discover Credit Scorecard, you’re getting your FICO score as opposed to your VantageScore. It’s your FICO score that is more likely to come into play when you apply for Discover credit (or any other loan/credit card product).

Your free Credit Scorecard will be updated monthly.

Note that while you’ll get select information from your Experian credit report, you won’t get access to the full report. To do that, you’ll need to go to AnnualCreditReport.com and request a copy of your credit report (it’s free).

Other Services Offered By Discover Credit Scorecard

Discover Credit Scorecard offers fewer extraneous services than many free-credit-score competitors. However, you will get access to a few important features in addition to your credit score.

Social Security Number Alerts

Discover will notify you if your Social Security number is found on any of thousands of Dark Web sites. These scans are run daily.

New Accounts Alerts

Should any new credit cards, loans, or other accounts appear on your Experian credit report, Discover will notify you. Discover will check for any new activity daily.

New Credit Inquiry Alerts

Discover will alert you whenever new credit inquiries appear in your name on your Experian credit report. Discover will check for new credit inquiries every day.

Unlike other similar services, Discover won’t show you credit card/loan offers tailored to your credit profile. The company will invite you to see if you’re pre-approved for a Discover it credit card.

Final Verdict

Discover Credit Scorecard is a great way to keep an eye on your FICO score and the factors that go into determining your FICO score. The only downside is that you’re able to pull data from your Experian credit report, but you won’t see anything from TransUnion or Equifax. What’s more, the service doesn’t offer as many extra features as some competitors. For instance, Credit Sesame offers $50,000 in identity theft insurance for free, while Discover offers nothing of the sort. Nonetheless, free access to your FICO score is nothing to scoff at.

Should you sign up for Discover Credit Scorecard?

This service might be a good option if:

You want access to your FICO score, refreshed monthly
You prefer to see your FICO score over your VantageScore
You want free credit monitoring and free SSN monitoring

You might want to use a different service if:

You want access to your credit information from more than just one credit bureau
You want extra features such as identity theft insurance in addition to free credit reports and credit monitoring
You want access to paid subscription plans for a higher level of credit management services

The post Discover Credit Scorecard Review: Free FICO Scores From Experian For All Users appeared first on Merchant Maverick.

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July 29, 2019

Can Business Credit Cards Affect Your Personal Credit Score?

Want to get a business credit card, but are worried that doing so may hurt your personal credit score? Then this guide is for you!

Business credit cards are often a great idea — they help separate business expenses from personal purchases and rewards are usually built with business spending in mind. Plus, they often incorporate extra benefits targeted towards business users.

However, in some cases card issuers report activity on a business credit card to one of the three major personal credit bureaus — Equifax, Experian, and TransUnion (these bureaus collect and sell data regarding the credit history of individuals, and problematic usage can impact your ability to get loans and apply for credit cards). This means that negative actions like missing payments or high credit utilization may indeed affect you personal credit.

It isn’t all gloomy, of course. By staying on top of payments and using your business credit card wisely, you should only save money in the long term. Plus, depending on the issuer, you may actually help your personal credit score.

To get the full picture on just how a business credit might be able to harm your personal credit score, read on below!

How Business Credit Cards Can Affect Personal Credit

Unfortunately for those that want to keep business credit entirely separate from personal credit, you’ll often be required to back up your business credit card with a personal guarantee. Should your credit card require this, you’ll be on the hook if your business’s account defaults. Note that in some cases, issuers won’t report your activity to personal credit bureaus while other may only report when your account is seriously delinquent.

As always, it’s helpful to monitor your credit score. That way you can track any changes and potentially stop harmful practices before things get out of hand. Don’t know your credit score? Find out with one of these free tools.

Here are a few key reasons why your personal credit score may be affected by business credit card usage:

Credit Inquiry For Your Application

When you apply for a business credit card, the issuer may look at both your business credit and your personal credit history. If this is the case, you’ll receive a hard pull on your credit.

Hard pulls will drop your credit score by a few points. However, they shouldn’t be damaging to your credit in the long term (unless you apply for numerous cards in rapid succession).

Credit Utilization

If you are using a high amount of your available credit, and your card’s issuer reports all your activity to personal credit bureaus, you may see a negative impact on your credit score. Credit utilization is based off the amount of credit you’re using and the amount of available credit you have.

In general, it’s best to only utilize up to 30% of your available credit. It’s even better if you can keep the amount below 10%. Luckily, business credit cards usually include higher credit limits than those that fall under the personal variety.

Failure To Make Payments On Time

This is the big one. Late payments make up a big part of your credit score and can stay on your history for up to seven years. Plus, some issuers will only report info to personal credit bureaus if your business credit is seriously late on payments. This means that while you may be safe utilizing a lot of credit, you will still be dinged for operating a delinquent account.

Besides potentially affecting your personal credit, a delinquent account costs you more money, too. For starters, you’ll likely need to pay a penalty APR (generally around 29.99%) and may be further subject to other late fees.

Issuers That Report Spending To Personal Credit Bureaus

Some issuers will send information to credit bureaus and others won’t. We’ve outlined how some of the major issuers handle credit report below.

These issuers will report your activity to personal credit bureaus:

American Express (but only negative activity)
Barclays (depends on the situation)
Capital One
Discover

These issuers won’t report your activity to personal credit bureaus unless your account becomes delinquent:

Bank of America
Chase
US Bank

These issuers generally won’t report your activity to personal credit bureaus:

BBVA
Citi
Wells Fargo

Note that all the above issuers do report activity to commercial credit bureaus, with the exception of BBVA (which does no reporting at all).

Can Employee Spending Affect Personal Credit?

Employee spending won’t directly affect your personal credit. However, if your employees spend more than you can pay off in a payment period, or their spending constantly utilizes too much of your available credit, you could see dings on your credit report. To avoid these potential problems, be sure to frequently monitor charges to your account and set up the spending tools that come with your card. For all the ins and outs of employee cards, read up on our guide.

It’s also worth mentioning that employees who are authorized users may see an effect on their own personal credit scores. If you are on top of payments and manage spending efficiently, you could help boost their credit scores. On the flip side, if you’re struggling with payments, it may be worth double-checking that employees are okay with being authorized users — otherwise, they could have their credit unknowingly damaged.

Should I Get A Business Credit Card That Wonât Affect Personal Credit?

When it comes time to choose, you should look for cards that offer rewards that best fit your business’s spending profile. However, if you anticipate that you’ll constantly be behind on payments, then you may want a card that doesn’t report to personal credit bureaus. Of course, that’s not a very savvy way to plan to get a credit card; instead, you should try to follow some of these best practices for credit cards.

One way you can ensure your personal credit won’t be affected is by applying for a corporate credit card. Because corporate card liability is placed on the business level, you’ll be able to avoid any personal guarantees. However, corporate cards are only available for larger companies; for instance, you’ll likely need to make at least $4 million in annual revenue.

Get a complete breakdown of the differences between corporate and business cards.

Maintaining Good Credit: Best Practices

The number one best thing you can do to maintain (or even build) good credit is pay off your card in full every month. By doing so, issuers won’t have a reason to report negative activity to credit bureaus. Plus, you’ll save money by not paying extra for interest or on late fees.

On top of this, you’ll want to keep your credit utilization low. This means that you should only use up to 30% of your allotted credit line — and, ideally, between 1% and 10%.

Get more tips on how you can boost your credit score with a credit card.

Final Thoughts

While business credit cards can affect your personal credit history, your score should be fine as long as you stay on top of payments and don’t utilize too much credit.

Ultimately, smart use of a business credit card can only be a good thing. By boosting your business’ credit score, you’ll be able to apply for better credit cards and lower interest loans, helping your business grow faster.

The post Can Business Credit Cards Affect Your Personal Credit Score? appeared first on Merchant Maverick.

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July 29, 2019

How Business Lines Of Credit Work

If you’ve been looking for loans, there’s a pretty good chance you’ve come across the term “business line of credit.” Lines of credit are an incredibly convenient and versatile way to borrow money. Businesses looking to smooth out their cash flow, or those that want a rainy day fund to draw on, may find them particularly useful.

We’ll try to answer some of the more common questions about business lines of credit below.

How Business Lines Of Credit Work

The easiest way to think of a business line of credit (and lines of credit in general) is like a virtual credit card. In fact, credit cards areÂ a type of revolving line of credit.

Rather than paying out a lump sum, as they would with a loan, a lender can extend a line of credit to borrowers. The line of credit comes with a credit limit which represents the maximum amount of money you can potentially borrow on that account at any given time. You can draw on that line of credit in whatever increments you desire, so long as the total amount you’ve borrowed is less than or equal to your credit limit. If it’s a revolving line of credit (most are), the credit is reusable. So if you have, say, a credit limit of $5,000 and borrow $500, you have $4,500 remaining to draw upon. If you pay off your $500 principal, you’ll have $5,000 to draw upon again.

Simple, right?

Well, not exactly. Lines of credit come in a variety of different forms with lots of variations in terms of their duration, grace periods, how they handle interest, draw fees (if any), and security. Most lines of credit that last longer than a year are subject to annual review. There may also be an annual fee to keep the account active.

So what is a business line of credit? Simply, it is a line of credit that is oriented toward business expenses and serves to provide a business with working capital. Like non-business lines of credit, these lines of credit can be structured in a variety of different ways. Many business lines of credit, particularly those with smaller credit limits, are unsecured, meaning that you don’t have to put up any collateral to qualify.

How Asset-Backed Business Lines Of Credit Work

Not all business lines of credit are unsecured, however. When you sign up for a line of credit, you may be asked to put up an asset as security. In the case of asset-backed lines of credit, the asset you provide as security is used to determine the amount of credit that the lender will extend you. Your credit limit will be a percentage of the value of your assets.

Acceptable assets will vary from lender to lender, but can include things like your accounts receivable, invoices, or inventory. On the surface, this may sound a little bit like invoice factoring, but there are some important differences. Whereas with invoice factoring, you’re actually selling your invoices to a factoring company in exchange for a cash advance, you still own the invoices if you use them as security for an asset-based line of credit. That means, for example, that you’ll still be responsible for collecting payments on those invoices.

If at any time the value of your collateral changes, your credit limit will likely be affected.

Why would you go for this kind of line of credit? Collateral reduces the risk to your lender which, at least theoretically, allows them to offer you better terms and rates than you’d get with an unsecured credit line.

How Interest-Only Grace Periods Work

Some lines of credit come with an interest-only grace period, notably the ever-popular home equity line of credit (HELOC). You do sometimes see them offered as perks for business lines of credit, though usually for a shorter period of time.

For the length of the specified grace period, you don’t have to pay down the principal at all if you so choose; you need only make interest payments on the amount you’ve borrowed. You’ll probably want to if you can, however, since a lower principal means lower interest payments.

In many cases, when the grace period ends, you’ll no longer be able to draw on your line of credit. At that point, it effectively functions as a loan with regular monthly principal and interest payments.

Business Lines Of Credit VS Business Term Loans

So now that you have a sense of how business lines of credit work, let’s look at how they compare to business term loans and when you might want one over the other.

Business term loans come in a number of different forms, but they all provide a lump sum up-front. You get your money, minus any origination fees, and then typically enter the repayment period immediately. Like business lines of credit, business loans are meant to be used for specific business-related expenses (inventory, working capital, etc.).

Why would you want a business loan over a business line of credit?

They’re (usually) easier to qualify for.
The rates can be better than a similar line of credit.
You know exactly how much money you need.
You want a predictable repayment schedule.

Why would you want a business line of credit over a business term loan?

You need some “insurance” against upcoming expenses.
You don’t know how much money you’ll need to borrow.
You want to smooth out your company’s cash flow.
You want flexibility.

Be sure to pick the right tool for the job.

Business Lines Of Credit VS Credit Cards

Remember when I said credit cards are a type of line of credit? That’s true, but there are some important differences between them and the kind you’d get from a lender.

Credit cards are optimized for point of sale transactions; you swipe them and, provided you have enough available credit, you’ve successfully made the purchase. What credit cards aren’t good for is getting cash into your hands when you need it. In fact, cash advance rates for credit cards are really dismal, and one of the worst ways to use your credit card. Business lines of credit, on the other hand, are a relatively inexpensive way to infuse your company with cash on short notice.

Credit cards come with an interest-free grace period every month, so a savvy credit cardholder can avoid ever paying interest on their credit card purchases. The flip side of this is that any balance you carry on your credit card will be subject to high-interest rates.

Why would you want a credit card over a business line of credit?

You want convenience when making retail purchases.
You want to take advantage of credit card rewards programs.
You make purchases you can pay off quickly.
You want the insurance perks that come with using a credit card.

Why would you want a business line of credit over a credit card?

You need cash on demand.
You need to carry a balance month-to-month.
You need a higher credit limit.

Note that some lenders offer lines of credit that allow you to tap them with a credit card. Some of these products even have reward programs. Just make sure you know for sure what type of product you’re working with so you can use it optimally.

Should You Get A Business Line Of Credit?

A business line of credit offers a wealth of advantages to borrowers, but that doesn’t mean they’re a great fit for every company. Most come with costs, so you’ll probably need to do some math to determine if they’re a wise investment.

Pros:

Money When You Need It: When an unexpected expense hits you, you don’t have to search between your couch cushions for loose change or take out a high-interest short-term loan to cover the gap.
Peace Of Mind: Having a backup account to cover expenses can do a lot to help you operate with confidence.
More Credit For Your Effort: Since a revolving line of credit can be reused, you’re potentially getting a lot of capital for the effort you put into your application. No one wants to apply for loans more often than they have to.

Cons:

Fees: Annual fees, draw fees, and interest payments can add up over time. If you don’t see yourself using your line of credit in the near term, it may end up being an unnecessary expense.
Easily Abused: If you’re a spendthrift, having a deep well of credit to draw from might encourage your bad habits.
A Loan Or Credit Card Might Be A Better Option: As we touched on earlier, there might be a better tool for the job than a business line of credit. If you just need a one-time cash infusion or need to make frequent, smaller retail purchases, consider a different product.

Final Thoughts

Business lines of credit can be a great alternative to term loans if you need a more flexible product or want to have a cushion to fall back on. Think a business line of credit is what you need but aren’t sure where to look? Check out our recommended lines of credit.

The post How Business Lines Of Credit Work appeared first on Merchant Maverick.

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July 23, 2019

Credit Sesame Review: Free VantageScores From TransUnion

It should come as no surprise that, as the stratospheric rise in the cost of housing, health care, and education exceeds wage growth, interest in managing one’s credit health would soar as well. After all, our credit scores play a huge role in determining our access to the credit we need just to keep ourselves afloat. Of course, we’d prefer not to have to pay money just to keep track of our own credit score.

This is where services like Credit Sesame come in.

Describing itself as “a fast-growing credit and loan management platform,” Credit Sesame offers four primary credit management services. When you sign up for a free Credit Sesame account, you’ll get access to the following:

Your credit score
Your credit report
Credit monitoring
Identity theft protection

How does Credit Sesame work? Is it safe? And is it genuinely free? Read on to discover the answer to these questions and more!

What Is Credit Sesame?

Credit Sesame was founded by Adrian Nazari in 2010. Since then, the company has grown to the point where it now employs 119 people. Millions of users now subscribe to Credit Sesame, though the company doesn’t give an exact number. Some sources claim the site has six million members, others say eight million, while others say 12 million.

A free Credit Sesame account offers the following:

Access to your TransUnion (one of the big three credit bureaus) credit score once per month
Daily credit monitoring with an alerting system that alerts you when your TransUnion credit score changes
Up to $50,000 in identity theft insurance

Is Credit Sesame Always Free?

If you’re satisfied with the services you get access to with a free Credit Sesame membership, you can use Credit Sesame forever without having to pay a cent. However, Credit Sesame does offer paid services in addition to the free services. These services are offered in the form of three different subscription plans: Advanced Credit, Pro Credit, and Platinum Protection. Here’s what you’ll get with each of these plans:

Advanced Credit

$9.95/month
Daily credit score updates from TransUnion
Monthly credit score updates from all three major credit bureaus
Full credit reports each month from all three credit bureaus

Pro Credit

$15.95/month
All of the above, plus:
Full identity protection
Credit monitoring with alerts for all three credit bureaus
24/7 access to live experts to help solve credit report inaccuracies

Platinum Protection

$19.95/month
All of the above, plus:
24/7 access to live experts for stolen/lost wallet protection
Black market website monitoring
Public records monitoring
Social Security Number monitoring

Is Credit Sesame Safe?

I have seen nothing to indicate that Credit Sesame is unsafe at all. You don’t need to give them any credit card information, and you only have to enter the last four digits of your SSN to establish an account.

No data breaches or any other loss of private user information associated with Credit Sesame have ever been reported. If you sign up with Credit Sesame, I wouldn’t worry about the safety of your personal information.

Credit Scores & Reports Offered By Credit Sesame

Credit Sesame shows you your credit score from TransUnion, one of the three major consumer credit bureaus. This score is calculated using the VantageScore formula, which means that the score you’ll see is not your FICO credit score. VantageScore is a different, newer credit-scoring model than FICO, and while your creditors may be assessing you based on your FICO score, your VantageScore shouldn’t be that far removed from your FICO score (learn about the differences in our complete guide to VantageScore VS FICO scores). Additionally, as VantageScore is the newer scoring model, it has become increasingly utilized by potential creditors with time. Your score will be updated by Credit Sesame once a month.

Your VantageScore credit score from TransUnion takes your credit information and history into account, giving you a picture of your overall credit health. It’s a nice feature to have for free, though I will note that competitor Credit Karma gives you free access to your VantageScore from both TransUnion and Equifax (another one of the big three credit bureaus).

Along with your credit score, Credit Sesame will show you five data points from your TransUnion credit report to show you how these factors affect your score: Payment history, credit usage, credit age, account mix (this refers to how many different types of open accounts you have — credit cards, auto loans, etc.), and the number of recent credit inquiries you’ve had.

You’ll also get access to information about any debts you have (including what percentage of your monthly income goes toward debt payments), along with credit monitoring, which means you’ll be alerted to any new activity that appears on your TransUnion credit report.

Note that while you’ll see selected data pulled from your credit report, you won’t have access to your full credit report with just a free site membership. You’ll need an Advanced Credit subscription ($9.95/month) for that. With an Advanced Credit subscription, you can get your full credit report each month from all three credit bureaus, not just TransUnion. Alternately, you can make a single standalone purchase of your TransUnion credit report for a one-time payment of $9.95.

With an Advanced Credit subscription, your TransUnion credit score will be updated daily, not just monthly. You’ll get monthly credit score updates from the other two major credit bureaus (Experian and Equifax) as well — something you can’t see for free.

Other Services Offered By Credit Sesame

I’ve touched on Credit Sesame’s other services, but let’s now delve into what the site has to offer beyond credit scores and reports.

Credit Monitoring

A free Credit Sesame account will get you credit monitoring for your TransUnion credit report. You’ll get alerts whenever new activity appears on your TransUnion report. However, to get credit monitoring/alerts for all three of your credit reports — TransUnion, Experian, and Equifax — you’ll need a Pro subscription ($15.95/month)

Identity Theft Insurance

Most credit score sites don’t give you free access to identity theft insurance, so Credit Sesame stands out in this regard. You’ll get $50K in insurance coverage for identity theft, fraud, and other financial crimes. Hey, it’s free insurance! And if you want more coverage, sign up for a Pro Credit subscription and get $1 million in identity insurance.

Along with identity theft insurance, you’ll get some identity restoration tools. These come in the form of documents showing you how to report fraud to government agencies, sample letters to credit bureaus, and the like.

Credit Card Recommendations

Credit Sesame will recommend credit cards to you according to your likelihood of approval (based on your credit score). These offers also show you how much credit you’re likely to gain access to in the event that you’re approved. You can also check to see if you pre-qualify for any personal loans. You can even search for mortgage lenders.

Final Verdict

Credit Sesame’s free tools let you check and monitor your credit score as well as determine just what aspects of your credit profile are dragging down your score (or boosting it, as the case may be). What’s more, $50K of free identity theft insurance is nothing to scoff at!

However, if you want full access to your credit reports, full identity protection, and such bonuses as full Social Security Number monitoring, you’ll need a paid subscription. What you get for free is of considerable value, though.

Should you use Credit Sesameâs credit score services?

This service might be a good option ifâ¦

You want to know your TransUnion credit score for free
You want free identity theft insurance
You want free credit monitoring
You’re willing to pay for a higher degree of credit management help

You might want to use a different service ifâ¦

You specifically want to know your FICO score
You want free access to both your TransUnion and Equifax credit scores (Credit Karma has this)
You want to use debt/loan calculators to help you formulate your credit building strategy (some competitors have this)

Want more tools to help you boost your credit score? Check out these articles!

Guide to credit bureaus
Guide to credit scoring models
How to improve personal credit score
How to dispute errors on your report

The post Credit Sesame Review: Free VantageScores From TransUnion appeared first on Merchant Maverick.

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What Are Credit Scores?

What Is Considered A âGoodâ Credit Score?

Why You Have Multiple Scores

Why Your Credit Scores Are Important

Next Steps

Check Your Credit Score For Free

Learn How To Improve Your Scores

1. Decide Why You Want A Business Credit Card

2. Check Your Credit Score

3. Look For Credit Cards With The Right Features

4. Collect Business Documents & Information

5. Apply For Your Credit Card

Whatâs A Side Hustle, Anyway?

A Side Hustle Doesnât Have To Mean Entering The Gig Economy

Side Hustle & Side Job Ideas That Anyone Can Start

Caregiving For The Elderly

Babysitting & Child Care

Pet Services

Arts & Crafts

Direct Sales

Offer Your Freelance Services

Furniture Restoration & Flipping

What Do You Need To Start A Side Business?

Software For Your Side Hustle

How To Finance Your Side Hustle

Is It Time To Get Your Own Side Hustle?

Step 1: Find A Great Idea

Step 2: Make A Plan

Step 3: Seek Financing

Step 4: Find The Right Software

Step 5: Launch Your Business

Step 6: Prepare for Setbacks

Step 7: Evaluate & Carry On

A Side Hustle Is Still A Business

What Is Chase Credit Journey?

Is Chase Credit Journey Free?

Can Anybody Sign Up For Chase Credit Journey?

Credit Scores & Reports Offered By Chase Credit Journey

Other Services Offered By Chase Credit Journey

Credit Alerts

Credit Score Simulator

Prequalified Offers

Final Verdict

What Is A Revolving Line Of Credit?

What Is A Non-Revolving Line Of Credit?

Revolving Line Of Credit VS Non-Revolving Line Of Credit

Borrowing Limitations

Maintaining Your Account

Interest Rates

Maximum Borrowing Amount

Which Is Right For Your Business?

Where To Find Revolving & Non-Revolving Credit

Final Thoughts

What Is Discover Credit Scorecard?

Is Discover Credit Scorecard Free?

Who Can Sign Up For Discover Credit Scorecard?

Credit Scores & Reports Offered By Discover Credit Scorecard

Other Services Offered By Discover Credit Scorecard

Social Security Number Alerts

New Accounts Alerts

New Credit Inquiry Alerts

Final Verdict

How Business Credit Cards Can Affect Personal Credit

Credit Inquiry For Your Application

Credit Utilization

Failure To Make Payments On Time

Issuers That Report Spending To Personal Credit Bureaus

Can Employee Spending Affect Personal Credit?

Should I Get A Business Credit Card That Wonât Affect Personal Credit?

Maintaining Good Credit: Best Practices

Final Thoughts

How Business Lines Of Credit Work

How Asset-Backed Business Lines Of Credit Work

How Interest-Only Grace Periods Work

Business Lines Of Credit VS Business Term Loans

Business Lines Of Credit VS Credit Cards

Should You Get A Business Line Of Credit?

Pros:

Cons:

Final Thoughts

What Is Considered A âGoodâ Credit Score?

Whatâs A Side Hustle, Anyway?

A Side Hustle Doesnât Have To Mean Entering The Gig Economy

Should I Get A Business Credit Card That Wonât Affect Personal Credit?