By Tammy Harrison
As I started working with our sponsor a few weeks ago, it really hit me that women are on the bottom of the finance chain. Not only do we have a big strike against us if we have been married and our credit report doesn't reflect the joint financial efforts of married people - we then have to deal with the loss of individuality that accompanies such!
Having a degree in personal finance and after being raised by a banker, I have an inside track on the world of money lending. That does not mean all of the same rules do not apply to me, I was just aware of the potential problems associated with borrowing money from an early age and took the necessary steps to prevent the major pitfalls of being a female first and then a married female.
I started out earning my own credit through a $500.00 loan with my credit union. Unbelievably, they loaned money to a young lady (all of 19 years old) who had a part-time job and was attending school. I had nothing else going for me at the time. I took that money and put it in a savings account and paid the loan back early by paying more than was requested each month and then paying it off before it came due. After that experience, the credit union deemed me a good risk and offered me their credit card. I used (and continue to use) that credit card responsibly. I pay off my balance, do not use the card unless I can afford to pay it off each month and my credit union continues to be good to me. There has been a time or two when I needed a loan and they were willing and able to loan me the money even though I have not been in the town where they are located since 1985.
I also made an effort to pay my college student loans on demand. I borrowed money for my last two years of school and my debt was around $3,000.00 at the time. I did ask for a deferral once in the last nine years, but other than that, I paid the loan monthly. Two months ago I received a letter from the State of Missouri saying that they appreciated my prompt payments throughout the years and as a way of saying thanks, were forgiving the remaining balance of my student loan (around $575.00). I was stunned! That, in and of itself, is the icing on the cake of my financial success.
I did not even think about what type of savings I needed when I was pregnant with our first child. All I knew was that I was not going to work and we were going to live on one income. As I have grown my business in the past year, the money has been sufficient to pay for my business expenses so I have not had to worry about borrowing. But, I am keenly aware that other women are not as lucky as I am. Some are single moms, some need more financing to maintain their home-based business than I do. Some even need income to live on while they grow their business. Where is a woman and a mom to turn?
The first thing to do is to obtain a copy of your credit report. You can do this online or offline and are usually allowed one free copy per year from these agencies. Read your credit report very carefully. There could be errors or omissions that will need your attention. It is a long, arduous process to get things changed on your credit report and the red-tape may make you angry, but it is the most necessary part of making sure your credit rating is correct so that you can obtain the financing you need.
I have seen home-based businesses start with a credit card, but do not recommend this approach unless you have a card that charges less than 10% interest (highly unlikely). If you have taken the steps to ensure accuracy and credit worthiness via your credit report, take the time to obtain a business/personal loan. You will not only save money on interest but you will be helping yourself build up your individual credit and that will eventually pay off in the long run!
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