Credit Counselor Will Roundtree: How to Get Your Credit In Order

There are so many things that school didn’t teach us, credit being one of them. Ironically, it is one of the single most important lessons that you’ll need in order to survive in the world today.

In an interview with Black Enterprise, credit and financial counselor, Will Roundtree, shares why credit is so important; the difference between business and personal credit; and what you need to do in order to get your credit in order.

Black Enterprise: Why is credit so important?

Will Roundtree: Understanding the meaning of credit is the first hurdle to get over. Credit is simply a tool, in layman’s terms. Once that has been established, the principles on why it is so important can, then, be discussed. Credit is essential to our lives. We need it to purchase homes, automobiles, apply for apartments and many more day-to-day requirements that allow us to move around in every aspect of our lives. Credit is vital to the lifeline of our personal lives and our business lives. 

Will Roundtree

What is the difference between personal credit and business credit? 

The difference between personal and business credit is not far removed from each other. The major difference is that your personal credit is based on your Social Security number and your business credit is based on your EIN, which is your Employee Identification Number. Your personal credit is generated and curated by three major credit bureaus. They are Experian, Transunion, and Equifax. Each bureau has its own way of reporting information. 

Your personal credit is used for personal expenditures and has a direct impact on your daily life. If you pay your bills on time and apply a healthy knowledge to your credit responsibilities, you have an unhindered buying power. However, on the flip side of that, if you do not pay your bills on time, you will adversely affect your ability to purchase life’s necessities and therefore, have obstacles in your way when deciding to make major decisions for your life.

For business credit, there is a completely different scoring model and a completely different credit reporting agency. Business credit is used, solely, for the purpose of business creditworthiness. The bureaus for business credit are Experian Credit, Equifax Credit, Dun and Bradstreet, and SBFE, which stands for Small Business Financial Exchange. These agencies monitor the financial responsibilities you adhere to when doing business while using credit.  

 How do you help people with credit?

I assist my clients in various ways. My No. 1 way is through credit education. My main focus is to generate knowledge on the subject of credit, especially in the black and minority communities. One of the things I have learned over the course of my journey is that we are economically undereducated in relation to credit, and I teach that if you truly understand the power of credit, you can always leverage it to create wealth. Additionally, I teach the understanding of credit strategies. This aspect is useful when I let people know that credit can always be rebuilt, restored, and repaired. Because believe it or not, the biggest misconception about credit is that it cannot be fixed or that people have to live with the bruises that can happen sometimes when dealing with credit. I simply try to make sure that I cover all aspects of credit when I am out in the community and educate them on their options. 

What are three things that people should focus on to build up their credit?

Make your payments on time. Payment history makes up 35%of your credit score, and even one late payment can drop your score significantly. To ensure a strong score, make all payments on time.

Make sure your credit usage is below 30%. This strategy is at the top of my list. Credit usage makes up 30% of our score. Credit usage is the amount of credit you have used based on the amount of credit you have available. Anytime you have over 30% credit usage, your score will drop. I like to tell people that having high credit usage is not the end of the day. They just have to lower that particular factor. Lowering it below 30% is ideal in most situations.

If there is anything negative showing on your report, it can be disputed. One of the things people may not be aware of, per the FCRA (Fair Credit Reporting Act) is that they have the right to dispute anything that reports as negative, inaccurate, incomplete, or unverifiable.  For example, you have a debt for $513.23. When disputing that debt ethically and legally and the price cannot be proven down to the penny, that company reporting that account has to legally remove or delete it from your credit report.