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The Importance of Credit Worthiness for Your Small Business

What many people don’t realize when starting a business is that it has its own credit score with a unique algorithm that determines your company’s creditworthiness. Unlike a personal score, a business credit score typically ranges from 1 to 100, with 100 being the best possible outcome. South Georgia Banking Company would like to take the opportunity to share some information on small business credit worthiness and how you can establish it with your own company.

Why do you need a business credit score? 

Separating your business and personal assets is critical. One of the key benefits that corporations and limited liability companies (LLCs) provide is the protection of your personal assets. To keep this protection, it is critical that you consistently show a clear separation between yourself and your business. Establishing your small business’s credit can help you do this.

What makes up a business credit score? 

Most of the credit bureaus are secretive about the formulas they use to create a business credit score, and some even admit that there can be more than 800 different data points that are taken into consideration. That can make it feel daunting to build up your business credit. Luckily, we can look to consumer credit scores to give us a good sense of the factors that are likely to be the most important, namely:

• Payment History
• Credit Utilization
• Credit History
• Credit Inquiries
 
Now that we know the key factors that make up a business credit score, let’s take a look at how you can establish your business credit. Specifically, you should: 

1. Incorporate your business as an LLC to protect your personal assets.

2. Obtain a federal taxpayer identification number (TIN/EIN).

3. Open a business bank account. It’s important to note you can’t open a business bank account without first obtaining an EIN.

4. Obtain a business credit card. This can be as simple as opening up a business credit card and making a number of small purchases that are easy for you to pay off quickly over the coming weeks. Assuming you already have money set aside and earmarked for this, you will be able to quickly pay off your business credit card and thus establish your company’s credit.

5. Open a business credit file. This can be done with all three of the reporting agencies: Experian, Equifax and TransUnion. Additionally, you can apply for a D‑U‑N‑S Number at Dun & Bradstreet. D&B and other credit bureaus can use this nine-digit number to identify your business and its credit file.

How can you continue monitoring your business credit?

By law, each of the three major credit bureaus is required to give you free access to your personal credit score once per year. That is not the case with your business credit score. Despite that, it is worth monitoring your company’s credit score one or two times per year so you can correct any errors and make sure your file is up-to-date. This can help ensure you continue to receive favorable loan terms and are able to better negotiate with suppliers and vendors.

When you’re just starting off, establishing your business credit score may not be your top priority. But, if you plan it right, growing and expanding your company can become much simpler and less expensive if you’ve taken the time to establish good business credit up front.

South Georgia Banking Company would love to help your small business establish a great credit score – please call us or come by today to get started!
 
Source: Forbes
 

How to Dig Out of Debt

Millions of Americans are dealing with debt overload every day. If you’re struggling to pay your loans, credit cards or other bills, here are some steps you can take to begin managing the problems.
Create a budget. Budgeting gives a clear picture of what you can afford so you can balance your income and expenses. 
 
Try to get a clear picture of your monthly income and expenses. "Even if you have a regular weekly, bi-weekly or monthly paycheck, budgeting enough money to pay your regular expenses and pay down debt may not be easy," said Elizabeth Ortiz, the FDIC’s deputy director for consumer and community affairs.
 
Ortiz added: "Also, many individuals have incomes that vary considerably from month to month because they work on a contractual or temporary basis with hours that equate to full- or part-time work. For them, budgeting can be tricky, especially when they are trying to pay down debt. That makes it especially important to know how much money is available and the expenses that must be paid regularly so that accidentally overspending doesn’t become an issue."
 
Contact your creditors about easier ways to make your most important bill payments. Many people find it helpful to schedule their essential monthly payments sometime soon after the deposit of their first paycheck of the month. In that case, you can ask your lenders, utility providers and credit card issuers to change your monthly billing-cycle date to line up with your first monthly paycheck.
Also, if you think you can’t make payments as scheduled, you can be proactive and ask your creditors to consider an extended payment plan that results in lower monthly bills over a longer period of time. Keep in mind, though, a longer payment period could mean you’ll pay more in interest. "Discuss a payment plan that can help you avoid getting too far behind," said Berry Holston, an FDIC consumer affairs specialist. "That’s especially important with a mortgage because if you have problems repaying the loan you could lose your home."
 
Have a strategy for saving money on interest and fees. Consider paying off debts with the highest interest rates first. Also, avoid late fees by making sure all bills are paid on time.
"You can track payment due dates on a calendar or use your bank's online bill paying service," said Heather St. Germain, an FDIC senior consumer affairs specialist. "Many banks offer this service, which allows you to see all of your bills in one location online and make payments directly from your bank account."
 
Consider getting help from a reputable credit counselor. Many companies and public service organizations offer assistance to individuals in creating a budget and learning to manage money, including debt, often for free or at a low cost. Under the Credit Repair Organization Act, companies and service organizations are required to explain the total cost of the service, timeframes to see results, a written contract of the services you will receive, and your right to cancel service without charge within three days. The Federal Trade Commission (FTC) offers tips on how to find and choose a credit counselor.
 
Also, be on guard against companies that promise to settle your debts or erase a bad credit history if you pay a big fee upfront. These are usually scams to steal your money and perhaps valuable information like your Social Security number, without delivering on their promises.
 
Know your rights if a debt collector contacts you. Debt collectors have rules they must follow under the Fair Debt Collection Practices Act, such as providing you with a debt validation notice stating the amount you owe and the creditor's name.  Debt collectors are also limited on when and how often they can contact you.
 
Contact South Georgia Banking Company with any questions - as always, we are here to help.
 
Source: FDIC
Think you know the score when it comes to online shopping? Unfortunately, scammers are usually one step ahead! They come up with something new every time their latest scheme gets blown wide open. It’s important to be vigilant whenever you're checking out a tempting offer or clicking an intriguing pop-up advertisement.

South Georgia Banking Company would like to provide you with some solid rules of thumb on how to avoid online shopping scams this holiday season.
 
Do Your Research
Generally speaking, you’re okay when you buy from established online retailers and from websites of well-known brands, but you might be tempted to stretch your dollar by buying from an unknown site offering similar products at much lower prices.

Before committing to anything, check out the website online, looking particularly for user reviews as well as badges from consumer protection agencies. Doing so allows you to check any negative reports about the company or their merchandise.

Buy Only From Secured Sites
 
When you do your online shopping, you'll have to provide financial information; most likely this will come in the form of your credit card details. No matter how secure a site may be, it's important to realize that putting credit card information on the internet carries an inherent risk; therefore, it's important to minimize that risk with these tips:

• Make sure that the website you are shopping on has all the signs of being legitimate. The easiest is to check if the URL begins with an “https” because that means the website is a secured one. The "s" indicates an additional layer of security known as an SSL or Secured Socket Layer.

• Another way to determine the level of security on a website is to search the domain name on a domain search website to check the create date, such as WhoIs.DomainTools.com or other domain checked sites. Older websites tend to be more reliable than newly-formed ones; sometimes, newer sites can be fake online shopping sites that usually disappear after a short while. Again, search online for reviews of the company.

• Key Point: You should also look for well-known security labels such as VeriSign and McAfee. Payment options should include third-party payment services such as Visa, MasterCard, and PayPal. Beware of websites that only accept money orders or wire transfers; it's a sure sign you will not get what you pay for and that you will never get a refund even if you lodge a dispute.

Maximize Credit Card Protection Services

If you determine the website is reliable, that does not mean your personal information is safe. One of the most insidious online shopping scams is when hackers obtain your credit card information from secured sites. If your credit card company offers a unique credit card number you can use for specific sites, you'd be wise to use it.

Check your credit card statements for any unusual or unauthorized charges and promptly report suspect findings to your credit card company. Many have insurance against consumer fraud, so you won’t be liable for fraudulent charges. If your credit card issuer doesn't have that kind of protection, find one that does, especially for online purchases.

Keep Your Personal Information Personal

No legitimate online shopping website will require information such as your mother's maiden name or your Social Security number. Credit card companies also don’t ask for your password over the Internet or the phone.

Read the Fine Print
Always read the fine print in any transaction. Many people develop a blind spot for text that appears to be legalese or in small print, but you need to read the terms and conditions because they contain important information that can impact on your rights as a consumer.

South Georgia Banking Company is committed to arming our customers with the knowledge to keep your finances safe while enjoying the convenience of online shopping. As always, we are here to answer any questions.
 

UPDATE: Our online banking update has been delayed. When a new launch date is available, we will give you an update.

South Georgia Banking Company is excited to announce the unveiling of our newly enhanced online banking service! The new site provides all of the same functionality you have been accustomed to while introducing new features in a fresh, easy-to-use interface. We are thrilled to offer our customers the latest in internet banking technology. This enhancement is scheduled to roll out October 21, 2018.
 
Exciting new features:
• Responsive design for users on the go
• Simplified navigation menu
• Supportive of touch-screen technology devices
• Enhanced account information display
• Redesigned screens for account information, internal transfers, loan payments, user information, and messaging.

Important things to note:
• Ensure your contact information and email address are up-to-date
• Your Access ID and password will not change
• All transaction history will remain
• All scheduled transfers will remain

Thank you for your business and support of this change. Should you have any questions, please contact us at 1.888.782.4211.
 

 

How to Dig Out of Debt

Millions of Americans are dealing with debt overload every day. If you’re struggling to pay your loans, credit cards or other bills, here are some steps you can take to begin managing the problems.
Create a budget. Budgeting gives a clear picture of what you can afford so you can balance your income and expenses. 
 
Try to get a clear picture of your monthly income and expenses. "Even if you have a regular weekly, bi-weekly or monthly paycheck, budgeting enough money to pay your regular expenses and pay down debt may not be easy," said Elizabeth Ortiz, the FDIC’s deputy director for consumer and community affairs.
 
Ortiz added: "Also, many individuals have incomes that vary considerably from month to month because they work on a contractual or temporary basis with hours that equate to full- or part-time work. For them, budgeting can be tricky, especially when they are trying to pay down debt. That makes it especially important to know how much money is available and the expenses that must be paid regularly so that accidentally overspending doesn’t become an issue."
 
Contact your creditors about easier ways to make your most important bill payments. Many people find it helpful to schedule their essential monthly payments sometime soon after the deposit of their first paycheck of the month. In that case, you can ask your lenders, utility providers and credit card issuers to change your monthly billing-cycle date to line up with your first monthly paycheck.
Also, if you think you can’t make payments as scheduled, you can be proactive and ask your creditors to consider an extended payment plan that results in lower monthly bills over a longer period of time. Keep in mind, though, a longer payment period could mean you’ll pay more in interest. "Discuss a payment plan that can help you avoid getting too far behind," said Berry Holston, an FDIC consumer affairs specialist. "That’s especially important with a mortgage because if you have problems repaying the loan you could lose your home."
 
Have a strategy for saving money on interest and fees. Consider paying off debts with the highest interest rates first. Also, avoid late fees by making sure all bills are paid on time.
"You can track payment due dates on a calendar or use your bank's online bill paying service," said Heather St. Germain, an FDIC senior consumer affairs specialist. "Many banks offer this service, which allows you to see all of your bills in one location online and make payments directly from your bank account."
 
Consider getting help from a reputable credit counselor. Many companies and public service organizations offer assistance to individuals in creating a budget and learning to manage money, including debt, often for free or at a low cost. Under the Credit Repair Organization Act, companies and service organizations are required to explain the total cost of the service, timeframes to see results, a written contract of the services you will receive, and your right to cancel service without charge within three days. The Federal Trade Commission (FTC) offers tips on how to find and choose a credit counselor.
 
Also, be on guard against companies that promise to settle your debts or erase a bad credit history if you pay a big fee upfront. These are usually scams to steal your money and perhaps valuable information like your Social Security number, without delivering on their promises.
 
Know your rights if a debt collector contacts you. Debt collectors have rules they must follow under the Fair Debt Collection Practices Act, such as providing you with a debt validation notice stating the amount you owe and the creditor's name.  Debt collectors are also limited on when and how often they can contact you.
 
Contact South Georgia Banking Company with any questions - as always, we are here to help.
 
Source: FDIC