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January 28, 2010

The Milkshake Story

Filed under: General — Tags: , , — afp @ 10:05 am

vanilla milkshake

I have had this story hanging on my desk for years and I don’t even recall where I got it.  It is a great story and continues to apply more than ever with the rebuilding of business that is going to have to happen in 2010.  To make sure you are the one getting the customers in your door in 2010, make sure your company doesn’t make your customers jump through hoops to get what they want.  And so… “The Milkshake Story…” 

“As a professional speaker and consultant, I’m on the road a lot.  I average about 100 nights a year in hotels.  There are many aspects of business travel that can wear you down, but I try to keep a smile on my face at all times.  One way I do that is by keeping my eye on the prize.  To get through a trying day on planes, trains and automobiles, I keep looking forward to something that will reward me at the end of the day.

Recently, I checked into a big chain, business-oriented hotel.  On entering the room, I immediately went to the phone to call room service.  My prize was going to be a vanilla milkshake.  I had been thinking about it all day and could almost taste it. 

“Good evening, Mr. Little, this is Stuart in room service.  How may I help you” a pleasant voice answered.

“Hello, Stuart, I’d like a vanilla milkshake, please,” I replied.

“I’m sorry, Mr. Little, but we don’t have milkshakes,” Stuart said.  I was crushed.

After thinking for a moment, I said, “All right, Stuart, tell me this:  Do you have any vanilla ice cream?”

“Yes, of course!” he replied enthusiastically.

“Okay, do you have any milk?” I then asked.

“Yes, we have milk,” he replied.

“All right, Stuart, here’s what I would like you to do.  Please send up a tray with a bowl of vanilla ice cream, half a glass of milk, and a long spoon.  Could you do that for me, please?”

“Certainly, right away, sir,” Stuart replied.

I hung up the phone, and five minutes later there was a knock on the door.  Sure enough, there on the tray was a bowl of vanilla ice cream, half a glass of milk, and a long spoon—all the ingredients you need for a vanilla milkshake.  But, of course, they don’t have vanilla milkshakes. 

Now, my question to you is this; Is Stuart stupid?  Perhaps, but I don’t think so.  I don’t think he’s stupid, because this isn’t the first time this scenario has played out for me.  In fact, I’ve probably repeated this exercise more than 100 times over the past five years.  In only 20% of the cases have I received a milkshake. 

So no, I don’t think it’s the individual that is stupid.  It’s the systems that are stupid.  The primary obstacle is that milkshakes are not on the menu, and there is no key code for milkshakes on their point-of-sale touch screens.  Therefore, they do not exist.  Some hotels are now offering smoothies on their room service menu, which tells me the second most common obstacle, lack of a blender in the kitchen, isn’t even an issue.

I feel sorry for these big name business hotels.  In an effort to be outstanding, they feel forced to invest in standardization.  They spend a fortune crunching data on their customers to come up with “meaningful profiles” that mean nothing.  Think of the billions they spend each year trying to train their staffs how to make me happy (because, believe me, I am the target).  Despite all this effort, they often fail miserably in giving customers what they really want.  The people who work there may be smart.  They may even sincerely try their best to make each customer satisfied.  But they are hampered by stupid systems. 

Here’s the lesson of the milkshake story.  Don’t allow your systems to make your organization stupid.  Find ways to build flexible operating procedures so those best and brightest people you hired can do their jobs.  Don’t make them have to be a systems analyst to input a special order that’s “off the menu.”  Don’t make them shut down a whole shipping department to send a package to Canada.  Don’t make your best sales rep jump through hoops sending triplicate forms to accounting because she had to give your biggest customer slightly different payment terms.  And if you run a hotel, find a way to keep room service from resorting to a bowl of ice cream, half a glass of milk, and a spoon when all the guest really wanted was a milkshake.” 

Pretty interesting story from Steven Little.  I’m sure all of us can think of different things that affect our ability to deliver what the customer really wants without having to jump through big hoops.  The important lesson is to make sure you identify these “hoops” in your business and get them changed.  Make sure your business and every employee in it has the ability to give your customers what they really want.

January 26, 2010

What’s Volleyball Got To Do With Finance?

Filed under: General — Tags: , , , , — afp @ 5:56 pm

volleyball

From the desk of Amy Wagner, VP Finance and Operations:

2010 brought about an internal change for the operations department at American Financial Partners.  We developed and implemented a more strategic “team” approach to our internal and external customer relations.  While working on that process, I began to think how similar developing a successful sports team and a successful business team are.  I coach girls high school volleyball in my spare time and have learned a lot about working in volatile and unpredictable circumstances. (Anyone who has a teenage girl understands that statement.)  The economy and the major downturn have certainly brought volatility and unpredictability to the credit markets and the finance business.  But just like a volleyball match, when you are down 2 sets to 1 and you can’t stop the middle hitter on the other side of the net, and your offense isn’t converting correctly, you have to stop, think and figure it out.  The coach and the team need to evaluate the problem and work out a solution… FAST… or that next ball is coming right at your face.  

The entire staff at AFP is here to help business owners with their financial needs, and to become part of their financial team.  We can help figure out the problem and find a way to solve it….FAST!  That’s the beauty of a small, highly-efficient organization — speed, decisiveness and execution — just like a successful volleyball team. 

As I evaluated my volleyball team last season, I found the following strengths and benefits:

  1. Speed – We were stronger and more agile than most of our opponents.
  2. Experience – We had five returning starters who brought experience to stressful situations.
  3. Desire – We wanted to win and be successful.
  4. Attitude – Positive and “can-do”.
  5. Team Chemistry – We believed and trusted each other.

As I look at the benefits AFP can bring to a financing relationship with a potential customer, I find that the strengths and benefits run parallel to those above:

  1. Speed –Leasing is many times faster than traditional financing.  The team at AFP will work tirelessly to provide you with the best financing option in the least amount of time possible.
  2. Experience – Our team has more than 60 years of experience in leasing and finance. 
  3. Desire – Our success hinges on the success of our customers.  At AFP we believe that being focused on our customer’s success will come back to us many times over.
  4. Attitude – Call us today.  You will talk to a real person, and we are always in a good mood!  We definitely have a “can-do” attitude; we will provide the best financing option we can for your circumstance.
  5. Team Chemistry – We believe in helping businesses grow and prosper by financing their business equipment.

So…what is my point?  

At AFP we are dedicated to becoming your financing partner and helping to build a successful financing team.  We are fast, experienced, dedicated and will help in any way we can.  Take a few minutes, sit back and think about how your business is like a sports team. How can you make it more successful by developing the correct team members?

Have a great day and GO TEAM!

Visit my Linkin profile at Linkedin Profile for Amy Wagner

January 25, 2010

What is a TRAC Lease?

Filed under: Leasing tips — Tags: , , , , — afp @ 5:20 pm

truck

A terminal rental adjustment clause lease (TRAC Lease) combines all the advantages of leasing while retaining the option to purchase the equipment at the end of the lease term at a pre-determined residual agreed to when the lease starts.  Your monthly payments on a TRAC Lease are determined by the residual price you establish at the start of the lease.  Depending on your cash flow needs, you can select a higher end-of-term residual amount for a lower monthly payment, or keep the end-of-term residual lower to pay more through the stream of payments.  This flexibility of payment options makes the TRAC Lease attractive to any business trying to improve and better manage their cash flow. 

At the end of the lease term, the customer has the following options:

  • Buy the equipment for the pre established residual purchase amount.
  • Replace / trade / upgrade equipment.
  • Continue leasing by financing the residual amount.
  • Return the equipment to the bank.
    • If this option is exercised, the bank will sell the equipment in a commercially reasonable manner.  If the bank earns more than the pre-determined residual amount when selling the equipment, the lessee or customer receives the difference.  If the bank does not get the full pre-determined residual when selling the equipment, the lessee or customer is responsible to make up the difference to the bank.  For example, let’s say the pre-determined residual on a lease is $20,000.  If the bank sells the equipment for $28,000, the customer will receive the overage of $8,000.  If the bank sells the equipment for $13,000, the customer has to pay the remaining $7,000 to the bank.

A TRAC Lease is generally used for “over-the-road” vehicles like trucks, tractors and trailers.  The IRS code allows the lessee to maintain the “full deductibility” of a true/operating lease even though there is a pre-determined residual value.  The lessor would retain the rights to any depreciation. 

Some of the benefits to a TRAC lease include:

  • Pre-established purchase option
  • Enables you to share in any upside proceeds gained from the sale of equipment
  • Lower monthly payments
  • Improved cash flow
  • Fixed and variable payment structures
  • Off balance sheet financing
  • This type of lease is generally less expensive than other leases or conventional bank financing
  • Full tax deductibility

January 22, 2010

Turn to Leasing when Banks Are Not Lending

Filed under: Leasing tips — Tags: , , , , — afp @ 10:38 am

money

An article in Business Week yesterday talked about the difficulties small business owners are having finding banks to lend to them because of reduced home values and other personal assets.  Many small business owners in the past have financed their businesses by securing money through home equity loans.  As home values decrease, these business owners are finding that money is no longer available.  Banks are still ultra-conservative in their lending practices and many small and medium sized businesses are finding it hard to get the money they need to grow their business.  Leasing is a great option for these small to medium sized businesses. 

Lease financing is generally more expensive than bank financing, but it is more easily obtained.  Leasing only takes the equipment as collateral and doesn’t require the business owner to tie up their business or personal assets.  Some of the other benefits to leasing include:

  • Most leasing under $75,000 only requires a one page application and bank statements. 
  • A business owner can roll in the soft costs associated with the equpiment purchases such as installation, freight and training services.
  • Fast turnaround time.  Most leases can be processed in a manner of days.
  • Leasing is an option even for start-up businesses and businesses/people who have had some past credit issues.
  • Used equipment of all ages can be leased.
  • Leasing provides flexibility with term (1-5 years typically) and end of lease options (you can return the equipment at the end or own the equipment at the end).
  • Leasing provides a fixed interest rate. 
  • Leasing provides tax benefits and operating lease payments can be 100% tax deductible when shown as an operating expense (Off-balance sheet financing).

Leasing is a great option for business owners to obtain the equipment they need to grow their business without all of the hassle.  Even if your bank will not lend to you right now, give leasing a shot.  For more on the state of small business bank lending, see:  http://www.businessweek.com/smallbiz/running_small_business/archives/2010/01/lower_home_stoc.html

Visit us at Linkedin:  http://www.linkedin.com/companies/390347

January 21, 2010

Sales Tips

Filed under: Sales Tips — Tags: , — afp @ 12:17 pm

IncreasingSales

We are always looking for ways to generate more sales for our businesses whether that means diversifying into another product line, increasing our marketing or just plain and simple making more customer calls or visits.  Sales is what drives an organization and the sales levels affect everyone in an organization.  It is something that people think about and worry about on a daily basis.  Today we are seeing a heightened sense of businesses trying to increase their sales as many companies are still trying to dig out of what the recession did to them.   I am a firm believer in continued self improvement and no matter how long you have been in the sales field, it never hurts to continue to learn and refresh what you have learned once, twice or multiple times before.  So with that I wanted to share Adrian Miller’s Top Ten Sales Tips for Sales Success (http://www.adrianmiller.com/). 

  1. Don’t do the bulk of your business prospecting during prime business hours. Often the call that is placed at 8AM or 6PM will be received by a decision-maker that has more time to talk. And don’t underestimate the value of leaving voice mail messages at night. These will be the very first messages that your prospect will hear in the morning, thereby increasing the odds of them placing a returned call.
     
  2. If you want to present products and services that are of value to the prospect and that meet their needs, you have to ASK questions. Ask the right questions and the prospect will tell you what they want and how they need to be sold.
     
  3. Too many sales reps launch into a conversation by discussing the features of their products and services. Features never sold anyone. The only thing that a prospect cares about is what these features will do for them. In other words, speak in terms of benefits and your prospect will be more pre-disposed to listening to your presentation.
     
  4. There’s no magic bullet. Prospecting takes time and if your sales pipeline isn’t always filled with prospects in various stages of being worked, then you are in for a future sales slump.
     
  5. Don’t underestimate the power of faxes. In these days of email, faxes have taken a back seat. Because of that, faxes get noticed. Carefully position faxes as part of your prospecting efforts.
     
  6. Follow-up and follow-through are keys to prospecting success. Just like gardening, if you don’t water the seeds, the garden will languish. And so it is with prospecting… if you don’t remain in contact, you will never break through.
     
  7. Give a prospect something for nothing. An article that would be of interest and value, information that you received online etc. and transferred to the prospect with a note “just thought you might be interested in this” indicates that you are thinking of them and wish to be a resource.
     
  8. Periodically tape-record a random sampling of your cold calls. Listen to the tape and assess your tone and voice. How did you sound? Would you want to speak with a person who sounds like you? What about your words? Were they clear and benefits-oriented? Taping gives you the opportunity to self-correct your presentation.
     
  9. Pace yourself. Prospecting is a very time-consuming and arduous task. Allocate a specific amount of time each day (week?) and keep to the schedule. It is always easy to put something ahead of the prospecting activity but make an appointment with yourself and don’t break it.
     
  10. Last but definitely not least, maintain a good sense of humor. Make the prospect smile and you’re halfway there!

And to conclude, I will share one of my favorite quotes from Adrian, “In today’s competitive business world, only the excellent survive.  Be excellent.”  Good luck with your selling in 2010!

Visit our website at www.financewithafp.com.

January 19, 2010

Debit or Credit?

Filed under: General — Tags: , — afp @ 11:44 am

swipe credit card

Debit or Credit?  That is the decision each of us has to make as we swipe our debit cards to pay for goods or services.  If we select credit we simply sign our name (sometimes that isn’t even needed) and we are on our way.  If we select debit we have to enter a four-digit PIN first and then finalize by signing our name.  The decision of debit or credit doesn’t seem like a big deal if you are a consumer, as you do not directly see any difference in price based on the option you select.  What many of us don’t know is that it does cost us money and it does make a difference.  A retailer can pay the bank an average of 75 cents for every $100 spent if you select the credit option and just sign your name which is more than twice the cost to the retailer than if you select the debit option.  The difference is so large that some large retailers such as Costco will not allow you to select the credit option.  Other stores such as Wal-Mart and Home Depot try to steer customers to use the debit option as well by having the customer go through additional steps to use the credit option.  Despite all of this, the credit option on debit card purchases accounts for 61% of all transactions in the U.S. even though PIN debit cards are less expensive and less vulnerable to fraud.  Because the big credit card companies charge the higher fees which they share with their banks to get their buy in, the consumers end up paying more in the end from retailers having to raise prices to cover these increased costs to their business.  These higher prices are paid by all consumers, even those who pay cash.  Debit cards have already surpassed credit cards in popularity and are expected to beat out cash by 2012 as our favorite way of buying things.  This means more fees and money to be made by the big credit card companies. 

One person’s decisions to select credit versus debit won’t make a huge difference, but if we make everyone aware of this, maybe we can make a difference.  Would it help lower prices if these fees were dropped or if we all switched to the debit option?  I don’t know, but it is worth the chance to give it a shot.  Next time you are buying goods, hit the debit option and enter your PIN.  Let’s all do our part to help lower the fees to the retailers which comes back to us, the consumers, and stop giving all of those fees to the large credit card companies.

For more on this topic, visit http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html.

Visit our blog at http://financewithafp.com/blog/

January 18, 2010

Back to the Basics

Filed under: Sales Tips — Tags: — afp @ 2:47 pm

shake hands

2009 created quite a tail spin for how businesses had grown to operate.  Business started with people doing business with other people.  It slowly evolved into some sort of heartless operation where people wanted more for less.  Now I don’t mean or believe that everyone was doing business like that, but I saw first hand many that were.  It continued to grow and lose control and is the reason our economy crashed into the worst recession in history… we got greedy.  People were looking for the best deal with the least amount of information and sometimes didn’t do the homework they should have.  We all got offers for things that seemed too good to be true.  Well, what we have found is that most of them were.  People stopped doing business with people and were doing business with the best deal and whatever option put the most money in our pocket.  As we are all trying to recover from the difficulties of 2009, I think it will be important to get back to the basics… people doing business with people.  I have always been a believer in doing business with people.  Not the best deal or the lowest rates, but the company who works hard to build a relationship with me, the company who gives me and my customers the best customer service levels and the company that I know will have my back in the future and will be there to continue to support me.  The lease/finance industry like many others saw a lot of change in 2009.  Some of the largest leasing companies in the nation went out of business or stopped offering financing.  The leasing companies who survived the storm were the ones who kept their customer service strong and who didn’t fall into the acts of offering rates or programs that just didn’t make sense.    

I have always been a fan of Dale Carnegie’s books, trainings and courses.  I wanted to share Dale’s list of principles on “Becoming a Friendlier Person” which is from his book “How to Win Friends and Influence People.”  I think these can remind all of us how to get back to the basics.

  1. Don’t criticize, condemn or complain.
  2. Give honest, sincere appreciation.
  3. Arouse in the other person an eager want.
  4. Become genuinely interested in other people.
  5. Smile.
  6. Remember that a person’s name is to that person the sweetest and most important sound in any language.
  7. Be a good listener.  Encourage others to talk about themselves.
  8. Talk in terms of the other person’s interests.
  9. Make the other person feel important- and do it sincerely.

So I say let’s get back to the basics and remember that we are all people running on emotion and we all want to do business with people we like and can trust.  And I will end with a quote from Dale Carnegie:  “When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.” 

Visit my profile on Linkedin at http://www.linkedin.com/pub/carrie-radloff/b/43/900

January 13, 2010

Kids & Money: How to teach your kids about Money

Filed under: General — Tags: , , , — afp @ 4:57 pm

piggy bank

Very few topics affect us on a day-to-day basis like money, so take as many opportunities as possible to educate your children about money.  This will help instill important and positive financial values, habits and attitudes with your children now so that when they get on their own they have a firm base to grow on.   Here are some ideas:

  • Allowances- Work with your child to identify ways they can earn money through work.  This could be household chores like making their bed, clearing the table or taking out the garbage.  You could even incorporate in brushing their teeth or getting themselves dressed in the mornings.  Put their chores on a board that is visible and have them mark down when they complete a specific task.  Reward their work with an allowance.  This lesson helps teach them that “money doesn’t grow on trees” like my Dad always said and there is value to money.  Things cost money and money needs to be earned through hard work.
  • Shopping-  Have your kids help you cut and organize coupons for your grocery shopping.  Put them in charge of finding the items you have coupons for and explaining to them the differences between brand names and generics.  As a reward, you could give them the money you saved by using those coupons for their savings account.  Teach them how to comparison shop and to watch for sales to help save money.  Help them understand the difference between wanting an item (fruit snacks, cookies, ice cream) versus needing an item (milk, bread, fruit, etc). 
  • Celebrate saving-  Find a piggy bank or savings container for your kids and help them understand how to use it.  This doesn’t have to be fancy, it could be a plastic container.  Put them in charge of their savings container and promote putting lose change into their piggy bank.  If they receive money as a gift at holidays or birthdays, reward them for putting that money in their savings.  You may even consider matching the amount they put into their savings to help recognize their discipline to saving money and help them set a goal to monitor and achieve.
  • Going out to eat-  Show them how to compare menu items and prices, for example drinking water when eating out saves money from purchasing soda.  Show them the bill at the end of the meal and how extra items can affect that such as a cookie at the end of a meal.  My favorite is to show my kids how much more expensive a kids meal is at our local fast food restaurant versus just purchasing those items separate without the “toy.”  Teach them about tips and taxes.  Your kids should know that there is no such thing as a “free meal.”
  • Setting up a savings account at a bank-  Most banks do a great job of rewarding kids for setting up a savings account.  Our bank for example gives our kids a stamp every time they deposit money in their savings account.  After the kids get so many stamps, they can pick a toy out of a group of toys.  My kids saved enough stamps in the last year that one was just able to get a Barbie and the other a baby doll.  These rewards are something your child will remember and will have them wanting to deposit their money in to the bank.

As soon as your child shows an interest in money, you can start to show them the difference between a $1 bill and a quarter.  Explain how some things cost more than others.  Helping your child learn about money and good financial habits early on can help create a lifetime of good financial habits as they grow.  More can be found on this topic by visiting www.familyeducation.com.

January 11, 2010

Types of Bankruptcy

Filed under: General — Tags: , , , , , — afp @ 10:55 am

A debtor typically files for bankruptcy to obtain debt relief which happens through a discharge or a restructuring of the debt.  Even though bankruptcy cases are always filed in the United States Bankruptcy Court, the guidelines are often dependent upon state law.  State law plays a major role in many bankruptcy cases and it is often impossible to generalize bankruptcy law from state to state.

There are six types of bankruptcy under the Bankruptcy Code.

Chapter 7: Liquidation for individuals and businesses; also known as straight bankruptcy; it is the simplest and quickest form of bankruptcy available.  Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts.  If the court feels you have the ability to pay, the case could be dismissed.  There are some debts not discharged in a Chapter 7 bankruptcy such as most taxes, student loans and child support. 

Chapter 9: Municipal bankruptcy; a federal mechanism for the resolution of municipal debts.
Chapter 11: Reorganization; this is designed for the reorganization of a business, but is also available to individuals with substantial debts and assets; known as corporate bankruptcy.

Chapter 12: Family Farmer or Fisherman Bankruptcy; this is designed to permit family farmers and fisherman with regular annual income; it enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.

Chapter 13: Individual Debt Adjustment; enables individuals with regular income to develop a plan to repay all or part of their debts; also known as Wage Earner Bankruptcy.
Chapter 15: ancillary and other international cases; provides a mechanism for dealing with bankruptcy debtors and helps foreign debtors to clear debts.

The most commons types of personal bankruptcy for individuals are Chapter 7 and Chapter 13.  As much as 65% of al U.S. consumer bankruptcy filings are Chapter 7 cases.  Corporations and other business forms file under Chapter 7 or 11.  Chapter 7 relief is available only once in any eight year period. 

To read more about this, visit the U.S. Courts website at http://www.uscourts.gov/bankruptcycourts/bankruptcybasics.html.

January 7, 2010

A Good Credit Score Isn’t What It Used To Be

Filed under: Credit tips — Tags: , , , , , — afp @ 4:04 pm

credit score chart

If you applied for a mortgage a couple of years ago with a 620 credit score you were good to go.  If you applied for a commercial lease with a 650 or above credit score and had 2 years or more time in business, you could be approved upwards of $150,000 with just a signature.  That same commercial business today might have a problem getting approved for $25,000.  In the past, any credit score over 700 would get a huge smile and thumbs up from your credit officer.  Now, if your credit score is below a 740 you might run the risk of not being approved or having an increased rate due to your “lower” credit score.   What used to be considered great is now only good and people are paying higher interest rates or making some changes to their credit to increase their scores. 

Here are some examples that I have run into in the past month of how people have been directly affected by their credit scores:

1)       I had a customer who was a 739 score when we funded a deal for her in October 2009.  When we repulled her credit bureau recently her credit score had dropped to a 698 because she put a new washer & dryer on a store credit card.  That increase in her revolving debt totals caused her available revolving debt to lower and the combination of the two made her score go right under the 700 mark that many banks require.  She was still approved for her lease, but at a higher rate than she had expected.

2)       A repeat customer came to us for another $20,000 lease for a new trailer.  His credit and pay history in the past were very good.  When we updated his credit there was an auto loan showing past due with a lot of recent slowness.  We found this was an auto loan he had co-signed for his son who wasn’t paying well.  Because of this auto loan derogatory, his score went to a 632 and we were not able to get him financed at a competitive rate, even though he handled his own credit perfect and paid all of his business debts.

3)       Credit bureaus and banks are now penalizing specific geographical regions due to the high delinquency and bad debt they have experienced in them.  I had a customer who was approved 6 months ago with a bank and decided to hold off on the equipment at that time.  When he reapplied recently his credit was the same, but the same bank would not approve his loan because he lived in Florida which was now a restricted state for that bank.

So what can you do to make sure your credit score is where you want and need it to be? 

There are a number of steps you can take yourself to help raise your score anywhere from 10-20 points or more in a short period of time:

1)       First, you need to know what your credit score is.  There are several sites where you can get free credit reports.  Just beware of pitches for over-priced credit-monitoring services, which can cost more than $100 a year.

2)       Correct any inaccuracies- Consumers can improve scores on their own, but I would caution anyone doing it themselves to make sure you do it properly.  If done incorrectly, it could cause you to not be able to fix it in the future.  There are credit agencies who offer clean-up services that can be recommended to you.  We have a company I could refer to you who charges a minimal fee and will do it right the first time (http://www.newwestcc.com/default.htm).  This minimal $295 fee is easily recouped by lower interest rates on your future finance agreements and leases.

3)       Decrease your revolving debt totals and increase your available credit.  This can be done by paying down balances or increasing credit limits.  Ideally, you should keep all of your open credit card balances from 0% to 30% of the total available credit.  Do not close the credit cards you have $0 balances on, keep them open even if you do not plan on using them. I’ve seen people increase their credit scores by 90 points or more just by paying off the right credit cards. 

4)       Limit inquiries and who pulls your credit bureau report.  Every time your credit bureau is pulled it can affect your score.

The most important recommendation I can give is to know your credit bureau score and to monitor it on a regular basis.  When you know you are going to be looking for financing in the near future, check your credit bureau and clean up any potential issues before you apply at your bank.  Talk to the bank you are looking to use to find out what their guidelines are so you can make sure the application and approval process goes smooth for you.  For more information on this topic and to get a free credit bureau report, visit https://www.annualcreditreport.com/cra/index.jsp.

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