Today Rep. Maxine Waters (D-CA) will introduce the Fair Credit Reporting Improvement Act of 2014. If passed, the Act would result in the most aggressive overhaul of the Fair Credit Reporting Act since 2003 and change the landscape of over 650,000,000 consumer credit reports and credit scores almost overnight. The Act would require the following take place:

Fair Credit Reporting Improvement Act of 2014
Regarding the amount of time an adverse item can remain on a credit report:

All adverse real estate loans (those in foreclosure or otherwise derogatory)  would have to be removed from consumer credit reports if the CFPB or FTC deemed them to be caused by deceptive lending practices.

• All bankruptcies would have to be removed after seven years instead of after 10 years.
• All judgments would have to be removed after four years instead of after seven years.
• All paid (released) tax liens would have to be removed after four years instead of after seven years.
• All collections would have to be removed after four years instead of after seven years.
• All late payments and other adverse items would have to be removed after four years instead of after seven years.
• Any and all adverse debts would have to be removed within 45 days of payment or settlement.
• Any adverse information regarding a private student loan would have to be removed if the debtor makes nine consecutive payments on time.

Regarding credit scores:

• Fannie Mae and Freddie Mac would be required to “regularly” revalidate the scoring models used to determine loan eligibility to make sure they’re statistically sound.
• Fannie Mae and Freddie Mac would have to study the benefits of using “additional or alternative” credit score products to see if they would improve the accuracy of Fannie and Freddie’s own scoring algorithms.
• Consumers must be informed that there is “no one credit score.”
• If the credit bureaus sell a credit score to a consumer the fee cannot exceed $10 for the score. The fees cannot apply when the consumer is entitled to a free credit score.
• A credit score is still defined as a score used to arrange loans, rather than a more comprehensive definition to include insurance, utility or tenant screening scores.
• Consumers may request a free credit score annually via AnnualCreditReport.com.
• All auto, mortgage or student loan inquiries that occur within 120 days of each other can only be treated as one inquiry in your score.
• Disputed credit information may not be considered by credit scoring models in any adverse manner. (This actually already happens in both FICO and VantageScore’s credit scoring systems.)

Regarding credit report disputes with credit bureaus:
        

• All supporting documents provided by consumers to the credit bureaus have to then be provided to the furnishers of the disputed credit information (normally a bank or a collection agency), despite whether or not the credit bureaus
  believe it to be “relevant.”
• The credit bureaus would have to provide consumers with a copy of “all” information used by the credit bureaus in carrying out their investigation.
• The credit bureaus would have to maintain sufficient staff to conduct investigations. This also applies to the furnishers of information.
• The credit bureaus will have to conspicuously post a summary of consumer rights regarding their ability to dispute items and the bureaus’ obligations to investigate.
• The credit bureau’s staff must have the ability and responsibility to directly correct errors identified in the credit report.

Regarding credit report dispute investigation standards and practices:

• The credit bureaus and data furnishers would have to verify they have a record of the items being disputed by the consumer.
• The credit bureaus and data furnishers must verify that the item is accurate and that it actually is being placed in the correct credit report belonging to the correct consumer.
• The credit bureaus must conduct an “independent” investigation, separate from the furnishers’ (bank or collector) investigation, in order to identify errors.
• The credit bureaus and data furnishers must verify that the consumer’s identification information is accurate and complete: includes full legal name, address, Social Security number and date of birth.
• Any company that furnishes information to a credit bureau MUST retain all relevant records regarding the account for the entire period of time the item is on the consumers credit reports.

NOTE: Most of the above investigation standards already occur.


Regarding the use of credit reports for employment screening:

• Employers can only use credit reports if the information is a “valid” predictor of employee performance for the specific position of employment, and is more reliable than alternative methods, as determined by the CFPB.
• Consumers cannot be charged for an employment screening report.
• The consumer’s credit report must be kept confidential.

Regarding the sale of services by credit bureaus to consumers: 

• If the credit bureaus are selling a service that has a promotional period then the credit bureaus must provide clear notice when that promotional period ends, if applicable.
• The credit bureaus may not provide services after the end of a promotional period UNLESS the consumer specifically agrees to continue receiving the product or service.

NOTE: This appears to be in response to consumer complaints about being charged for subscriptions services by the credit bureaus after their trial or promotional free period has ended.

Some Notes: 
 
When you choose to accept credit cards as a small  business, there are a number of considerations that come into play. For example, the cost of your merchant account and internet payment gateway are things that you should think about and plan for.  
 
Another often overlooked cost-factor is that of the fees associated with each type of credit card. Some merchants opt not to accept certain cards (such as Discover and American Express) because the fees for those cards tend to be higher.  

While a percentage point or two may not make alarms go off in your head when you think about small transactions, the fees can add up substantially over a year or two. These are costs that should definitely be considered before you decide to accept cards with higher fees. There may be other fees associated with the types of cards that are more difficult to account
for. 

Another cost to consider when accepting credit cards is the cost of chargebacks. Chargebacks happen for a number of reasons: 
 
- Customer dissatisfaction 

- Consumer confusion 

- Poor merchant communication
 
- Fraudulent or Unauthorized Charges (For example: a relative used their credit card without authorization) 
You can't always stop or remedy these reasons, but many chargebacks can be fought (and won) or avoided altogether if you are careful to cover your bases and communicate thoroughly with your clients and customers about the charges that will appear on their credit cards. 

Still, the cost involved in investigating and responding to charge backs, and the cost of losing them is something that should be taken into account when you decide to accept credit cards. This is especially true in businesses or industries that are more chargeback prone. (Mail order is a good example.) 

When building business credit, you will need to pay attention to more than just your payment history. How you use and interact with the credit system on several levels can either be a great benefit to your company, or come back to bite you
if you aren't careful. Here are a few things to watch out for: 

1.  Don't be damaged by the bad credit of others. Suppliers and customers with bad credit can hurt your business. Not only do you need to be concerned about your own credit profile, but that of your suppliers too. A simple example of the
importance of this is what happens with accounts receivable financing. Your rates for accounts receivable financing are based on your customer's credit rather than your own business's credit. 

The reason is that accounts receivable financing depends on your customer's ability to pay, not yours! So even if you don't use accounts receivable financing, you should still check credit and know who you are doing business with, because a
default on the end of a customer or supplier can be as harmful to your business than any internal hiccups that you might more easily anticipate. 

2.  If you must issue credit, don't issue too much. Businesses need cash to operate.  If you're issuing credit, especially with longer terms, and always having to chase down funds, this can drastically reduce the day to day financial health
and well being of your business. 

3. Don't take credit when you don't need it. While this might seem strange,  financing certain operations just because you can isn't always the wisest choice. Save your business credit for when you need it. Use credit to save the available cash and purchase assets for the business. Use credit for creating and multiplying profits. But never use credit "just because". 

4.  Never use your personal credit for your business. It blurs the line between your personal and business finances (increasing the likelihood that a lawsuit could  "pierce the corporate veil"), it puts your personal credit at risk for your
  business's debts, and it doesn't do anything for you with regards to building  your business credit. It's a lose-lose scenario that should be  avoided. 

Please contact us, your coaching team, with questions during your business credit building process.  

Imagine having the ability to access  $50,000, $100,000, even $250,000 for your business. Now imagine doing this with
NO personal credit check and NO personal guarantee.   Your success in business will be  determined based on your business credit profile and score. With a good business credit profile you will have near unlimited borrowing power. 

Without having a good business credit profile it will be a difficult path to success without having access to
working capital and funding. This is why almost all Fortune 500 companies use their business credit to secure funding.  
It's not that they need the money to operate.  Successful companies use funding as leverage to grow their business. 

Business Credit is the best kept secret in business. Over 90% of all business owners know nothing about business credit or business credit scores. But when you do discover the power of what business credit can do for you and your business you will be floored at how easy it is to get money and grow your business. 

One of the many benefits of business credit is that you can obtain funding with no personal credit check. With a strong business credit profile lenders will lend you money based on your business credit, not your personal credit.  
This is excellent if you have personal credit issues as you can still qualify for funding. Even with exceptional personal credit, business credit gives you DOUBLE the borrowing power.  
 
You can get approved for much higher funding amounts using your business credit than you would if you used your personal credit to qualify. 

Another great benefit of business credit is there is no personal guarantee required for much of the funding you
obtain. This means you can be approved with no personal liability.  So if you ever do default, the creditor can't pursue your personal assets like your home or personal bank accounts. 


Business credit adds more value to your business and gives your business credibility. Stakeholders, partners, lenders, even potential buyers of your business will see more value in your business if you have a strong business credit profile built.  

Most important by having a good business credit profile built you have security. It is much easier to run your business when working capital is easy to come by. Any business with a $150,000 credit line available will have a much better
chance of growth than if $0 was available.  

 Business clients do qualify right now for business credit. And through the business finance suite clients will be  able to secure well over $50,000 in business credit within months. 

Any business owner will attest that it is much easier to start and grow a business when you have access to funding and
working capital. 

You currently could have access to $100,000 or more in credit cards even if you have a brand new business, or want
to start a business.   These credit cards are  basically no documentation. You don't need to show financials or revenue to
qualify. This is what makes it perfect for startup businesses and new franchises. 

But it is also perfect for  existing business owners who don't want to show a lot of documents to obtain  credit up to $100,000 quickly.  It takes about 2-3 weeks to close and receive full access to your credit cards. 

This account does require good credit to qualify.  We can help you improve your credit if you don't qualify, or you can also use a  personal guarantor to help you secure your funding.  

Having access to $100,000 in credit cards will no-doubt give you more peace-of-mind as your business grows.