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Wyoming Business Tips for Aug. 13-19

August 4, 2017

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By John Privette, WSBDC regional director

“How will my personal creditworthiness affect obtaining a business loan?” Bob, Cheyenne

For a small-business owner, knowing how banks decide whether to give you a loan, and at what rate, is important.

A personal credit history is an important consideration and, the more you know, the easier it will be to take the actions needed to improve personal creditworthiness. A survey conducted by Credit Karma highlighted seven often-misunderstood facts about credit:

-- Multiple credit scores: There is no one “official” credit score. The three major credit bureaus are Equifax, Experian and TransUnion, and each bureau developed its own proprietary credit score model.

-- Collections impact: Paying off a collections account does not automatically remove it from a credit report. Collections accounts can remain on a credit report for up to seven years, paid or not. Resolving collections could still benefit credit health.

-- The benefit of open accounts: Closing unused cards is not always the best action to take. It is usually best to keep all credit cards open, active and on time. Closing an account could raise credit use rates and drop a credit score.

-- Self-checking: Checking on your credit score and requesting a credit report does not affect the credit score. Self-checking is considered a soft inquiry, as opposed to a hard inquiry from a bank.

-- Income exclusion: Annual income is not included in a credit score calculation. Most lenders will request income information and consider debt-to-income ratios in lending decision making.

-- Zero balance, no problem: You do not have to carry a balance on your credit card from month to month to build credit ratings. It is important to use a credit card, but you receive credit value even with a zero balance.

-- Credit variety: Having a healthy variety of credit accounts -- such as credit cards, mortgage and auto loans -- can add to on-time payment history and help your credit.

A blog version of this article and an opportunity to post comments are available at

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email, or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.

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