According to the Small Business Administration (SBA), insufficient or delayed financing is the second most common reason that new businesses fail.  

So, if you plan on going into business for yourself, first check your credit.

“Your credit report will either open doors or close them,” said Beatriz Mauersberg, a financial educator with Clearpoint Credit Counseling Solutions. “In the early stages of a new enterprise, the personal credit history of the business owner is crucial in determining most lending decisions.”

To help empower aspiring entrepreneurs interested in best positioning their start-up for success, Urban Asset Builders, the Center for Civic Innovation and Bank on Atlanta partners offer beneficial resources.

Supportive services include a series of financial literacy workshops on credit and capacity building, traditional and non-traditional funding sources and, other public-private community assets designed to spur economic development.

“It’s important to know where you stand and the credit report is a way for institutions to know how you’ve been managing money,” Mauersberg said. “Residents in the state of Georgia are allowed to receive two free credit reports per year from Experian, Equifax and Trans Union.”

While these free annual reports, authorized by the Federal Trade Commission, do not provide verifiable Fair, Isaac and Company [FICO] credit score results, for a nominal fee — paid directly to the reporting bureau or other private credit monitoring service, like Credit Karma — consumers can access their numbers.

“Life is more costly and made more difficult when our credit scores are low or insufficient,” explained financial educator and media commentator Angela Fitzgerald. “What most people don’t understand is the score involves more than just whether or not the person is paying financial obligations on time every month.

“It really is a snapshot into how a person utilizes and manages the credit,” Fitzgerald continued. “For instance, if you have a credit card limit of $1,000, try to not carry any balance greater than $300 on that card. A higher default risk is often associated with consumers who are consistently maxing out their available credit balances.”

Creditors do understand that life happens to all of us.

While it is true that more favorable interest rates are given to consumers with higher credit scores, which allows them to borrow money at a cheaper rate, it is worth noting the minimum credit score to receive an FHA mortgage is 580.

Industry data suggests that traditional banks and funders typically like to see a 650 FICO score when reviewing lines of credit requests.

Just as no two banks are the same, no two consumers are the same and these matters are often decided on a case-by-case basis.

Fitzgerald underscored the importance of implementing a disciplined savings and spending plan in any strategy designed to move toward financial independence and the freedoms associated with entrepreneurship.

“Treat your personal savings like a monthly bill — not as something you will eventually get around to doing,” says Fitzgerald.

She advised consumers to start by putting away a percentage of their net pay that he or she feels comfortable with, like 10 percent.

Next, one should create a goal to have at least $1,000 for emergencies, eventually working your way into having at least three to six months of living expenses secured as you take advantage investment tools such as IRAs, 401Ks, stocks and mutual funds.

With a solid savings plan in action, the next move is to live and do business below one’s means.

“Understand your lifestyle costs and see what adjustments you can make to not spend every dollar you earn,” says Fitzgerald.

African Americans have a history of succeeding against the odds, stepping out on faith determined to make a way out of no way.

Economic justice begins with a decision to know, be and do better. Pull that credit report today.

To pull your free credit report, visit:

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