Setting Up Business - Bad Credit Rating?

[xXxDaWn-JxXx]

Hiya guys,

I am looking far ahead I know as I have just started my trainging, but I am thinking of all options at the moment!

I have a dilemma. Back a few years ago I managed to get myself a bad credit rating through credit cards and loans etc which I am now paying off, but has left me with a black mark against my name.

My question is, will this stop me from eventually running my own business? That is in the end what I'd love to do, :green: run my own nail bar/salon but I have a feeling the bad credit will stop me from doing so! :cry:

Have any of you guys been in my position? Any advice will be great!

Thanks

D* xXx

 

[Bagpuss]

Any bad credit/defaults will remain for 6 years from when they started....so after that time they wont show. Some companies credit criteria varies from others...late payments are usually fine...its defaults that are the main one, but even then its not all bad news as it depends on how many, the amount and when.

Make sure you have a up to date copy of your credit file from either Equifax or Experian and have a good look through to see if they are all correct. If they are paid and finished then the outstanding balance should be 00 and marked as either settled or satisfied. If they are still showing an amount then write to them asking them to update/amend it.

 

[carrie g]

Hi Julie,

You will be fine! I like you had the most shocking credit rating, but as long as you don't need a loan to start up, it's not a problem at all.
You should quite easily get a business bank account, but probably not an overdraft facility and you can still get yourself a PDQ for card payments.
Good luck with your training and don't worry. Just start saving!!

 

[LipstickLady]

To add to the thread, I'm wondering if you're worried about getting a Merchant Account so you can accept Credit Cards? You'd have to complete an application for credit to get a Merchant Account and they are expensive to have. But, there is a way around that issue and that would be to get a PayPal Business Account (which I'm pretty sure ANYONE can get). Make sure you get the kind that accepts Visa, MC, Amer Express, Discover). Then if someone wants to pay you by credit card, they can. Or, I suppose your policy would be only check or cash.

The positive aspect about accepting credit cards is that I find you can upsell more services and products because clients will spend more money if they can put it on a card.

I agree with the membership - you may have some bumps in the road along the way, but everything will work out!
ox kelly

 

[divalou]

I had a pretty crap credit rating but managed to get a loan for 5k. They didnt give me an over draft but i dont think HSBC actually even applied for it, think they just fobbed me off due to history of a close relative who was forced to go bankrupt and who was with HSBC. Anyway, Im with RBS now, with an overdraft thank god! But if you are worried about your credit rating, check out money saving expert, google it, and theres LOADS of tips on how to improve it.

 

[Saya]

I have struggled all year trying to secure finance to start my salon. If you are looking to get finance, the credit crunch will make low scorers ever harder to secure it.
Before you apply, I would highly recommend that you obtain your credit report from experian and equifax and do your best to clean it up. Get rid of all the stuff that shouldn't be there, ensure that all settlements are showing correctly, put in statements to explain any uglies etc (you can get a lot of advice on making it look better through creditexpert.co.uk)
having spent the last 2 months doing this, I've now secured my loan!
They tend to look at your payment behaviour for the last 12 months, so make sure that all bills (inc. mobile phone) are paid on time, every month.

Even if you don't require it now, starting the prep now will pave the way for future borrowing.

 

[xXxDaWn-JxXx]

Would just like to thank you all for your replies.

I have been paying my debts constantly now for the past 6 months with no defaults so this should hopefully help my future salon! It is a very difficult time at the moment for everyone, but I will try to start saving my spare pennies!

Thanks again,

D* xXx

 

[Miss Sparkle]

The worst thing you can do is default, as long as you are paying off at least the minimum amount every month you're keeping them happy and you'll be fine. Of course it's ideal to pay off more than the minimums but the important thing is to pay off *something* every month.

I got myself into a lot of trouble a couple of years ago just thinking, "Hey, life is for living, I can pay these off when I'm old" etc but I had a wake up call and now I am slowly paying it all off. It's a pain but so worth it.

I'd recommend looking on moneysavingexpert.com and sign up for their email as there's loads of useful info.

 

[collin]

A bad credit rating should not be sufficient to stop you or anyone setting up in business and has no bearing on your abilities to do so.

The only impact it will have is when you come to borrow from mainstream lenders...if you are fortunate enough to have sufficient initial finances available to set up your credit score doesnt relay come into play.

There are always other possibilities for borrowing money..try family and friends but dont just ask outright..explain the situation..even do a small business plan..at least this way they will see your serious.

try starting small scale where less initial upfront investment is needed...you will be quiet surprised how little money is needed to get things off the ground..particularly if you also hold down a full time job and start off your beauty business part time....its hard but not impossible.

HTH and wishing you the best of luck :hug:

 

[Terese]

Hi D

DITTO...to what Collin and others have suggested.

You dont need alot of money to start up...of course everyone would like heaps of money because it makes things easier as you dont have the worry....the biggest mistake I made when setting up was having to get everything and really on hindsight I needed the bare minimum!

As for credit rating....If you havent got anything on credit...go get some...however little, and obviously pay what you have to pay....you have to show lenders esp these days that you have reformed your ways and are doing that by paying things each month etc

Its a vicious circle, you need credit to gain credit accountability..the electrol register is not enough you have to be seen paying your commitments.

If your serious about buisness, I cant recomend a Business plan enough...however small your business is YOU should have one and dont be afraid to add to it and adjust to it

There is plenty of information around on the net...its never to late to start

xx

 

[xXxDaWn-JxXx]

Hiya guys,

Just want to say thanks again for all your replies. It's nice to know I'm not the only one who went off the creidt-rails at 18 years old!!!

I am thinking of starting mobile first, or even at home as I do have a spare room I could possible convert? Then I could do part time to build up the pennies and of course my experience before being in a salon of my own.

Thanks, luv ya all!

D* xXx

 

[collin]

Hiya guys,

Just want to say thanks again for all your replies. It's nice to know I'm not the only one who went off the creidt-rails at 18 years old!!!

I am thinking of starting mobile first, or even at home as I do have a spare room I could possible convert? Then I could do part time to build up the pennies and of course my experience before being in a salon of my own.

Thanks, luv ya all!

D* xXx

Good luck and do keep us posted...."work hard but dont play to hard" ..well untill you get some money behind you first :hug:

 

[jenny2]

Good luck and do keep us posted...."work hard but dont play to hard" ..well untill you get some money behind you first :hug:

lol, oh can we not do both collin. All work and only little play makes it a borring old world. Please tell me i can do half and half or will sulk :lol::lol: xx

 

[Saya]

Just thought I might mention that there is a lil bit of help that you can get through a certain government lending pot.
If you live in London and require a reduced rate match funded loan, PM me for more details. It is limited, hence the privacy. Along with the loan I received an Accountant who did my Proffesional Business Plan within days and I now have a Business mentor to support me through my start up.
I couldn't have started my salon without it!

 

[xXxDaWn-JxXx]

I don't live in London unfortunately :cry: but maybe there is something that can help me? In the meantime I think being mobile or home based is a plan for now!

P.s. I won't play as hard then, just a little bit!

D* xXx

 

[*Ang*]

Good luck with your business when you get up and running with it, whether it be home or mobile and keep us informed with how you get on :hug: