Questions? 1. Does your personal credit rating affect your ability to get a business loan? Answer from Corning Credit Union: Every financial institution.
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Transcript
1
End of Week 1
Questions?
1. Does your personal credit rating affect your ability to get a business loan?Answer from Corning Credit Union:Every financial institution underwrites business loan requests differently, but in general it is best practice to pull a personal credit bureau for each guarantor of a business loan. It is just one factor used in the loan decision, however, as compared with consumer lending where the credit score is typically the overriding factor.
Where we left off in week 1 –Introduced the 10 step plan
1. Balance the budget2. Establish short-term emergency fund3. Pay off consumer debt4. Establish long-term emergency fund5. Develop “large purchase” savings plan6. Pay off mortgage7. Save for retirement8. Save for college9. Invest the surplus10. Share the surplus
Balance the budgetEstablish short-term emergency fund
Pay off consumer debtEstablish long-term emergency fundCreate large purchase savings plan
Pay off mortgageSave for retirement
Save for collegeInvest the surplusShare the surplus
The steps don’t have to be strictly in sequence……but the exceptions are few
4
The Plan
1. Balance the budget2. Establish short-term emergency fund3. Pay off consumer debt4. Establish long-term emergency fund5. Develop “large purchase” savings plan6. Pay off mortgage7. Save for retirement8. Save for college9. Invest the surplus10. Share the surplus
Wages/Salary Interest and dividends Bonuses Rental income Alimony, child support
Record all expenses for at least a month Taxes Tithe Housing (mortgage, insurance, maintenance, repairs) Auto (loans, insurance, gas, maintenance, repairs) Clothing Medical Insurance (medical, dental, disability, life) Entertainment & Recreation Debt (credit card payments, etc., other than home or cars) Miscellaneous Savings (retirement, short-term)
Compare monthly expense record against budget targets
This shows clearly the problem areas The next step is to evaluate each expense category
and look for reduction opportunities or find a way to increase income or both
This may require some drastic decisions… Selling a house and renting or buying smaller Keeping cars longer or selling a car Cutting back on discretionary purchases Increasing income via overtime, job change
1. Balance the budget2. Establish short-term emergency fund3. Pay off consumer debt4. Establish long-term emergency fund5. Develop “large purchase” savings plan6. Pay off mortgage7. Save for retirement8. Save for college9. Invest the surplus10. Share the surplus