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125 Remount Road

 Suite C-1 PMB2002

Charlotte, NC 28203

(980) 263-2056

Click for the BBB Business Review of this Tax Return Preparation in Kannapolis NC

K Harrell's Financial Services

KHFS Blog

An Ongoing Series of Informational Thoughts

Business Credit

March 6, 2021

Dun & Bradstreet analyzes the promptness of your payments against the terms of sale for each payment experience. So, the faster you pay your bills, the better your score.

PAYDEX scoring is dollar-weighted, which means that each payment experience is weighted in terms of the number of transactions and the overall dollar value of those transactions. That means your transactions with your IT vendor, with whom you spend thousands of dollars monthly, comprise a greater percentage of your D&B PAYDEX score than your transactions with the carpet cleaner who comes out to steam your rugs annually for a few hundred dollars, for example.

It’s important to note that a Dun & Bradstreet PAYDEX score of 100 does not indicate that a business has made on-time payments — in fact, it indicates that a business has consistently paid suppliers 30 days in advance. To determine your business’s PAYDEX score, Dun & Bradstreet gathers data from the suppliers and vendors with which you do business over a rolling 12-month period. Each supplier/vendor is considered a tradeline account, and the payments you make to that supplier/vendor are considered a payment experience. According to Dun & Bradstreet, two tradelines with at least three credit experiences are needed for a PAYDEX score.




Up Next...PAYDEX Scores Explained...

Business Setup

March 6, 2021

LLCs

How Are They Unique:

Better for maximum flexibility in how you manage and run your business.

Board of directors are not required.

Unlimited owners (aka “members”) allowed

Protections & Taxation:

You’re not personally on the hook for business liabilities

Taxed once or twice

Business owners are free to choose which deductions can help minimize taxes

Drawbacks To Consider:

There are ongoing filings and fees to stay in compliance

LLCs can’t go public

Not recognized globally; the business may be taxes as a corporation in other countries

S-CORP

How Are They Unique:

Better for smaller corporations

100 shareholders max

The owners can only get common stock

Protections & Taxation:

You're not personally on the hook for business liabilities

Taxed once—only shareholders pay on profits received

Drawbacks To Consider:

There are ongoing filings and fees to stay in compliance

There is less management flexibility

The business must have a board of directors

There are strict rules about holding meetings and keeping records

All shareholders must be U.S. citizens or residents


Up Next....Are C-Corps Preferential??...


Credit & Your Credit Score

March 6, 2021

How long can negative payment info affect your credit health?

If you run into trouble managing your money, your payment history on your credit reports could be affected for a long time.

Late bill payments can stay on your report for up to seven years and accounts sent to collections also can stay for seven years. Information on judgments against you can be reported for seven years or until the legal window to bring a claim against you runs out — whichever is longer. Completed Chapter 13 bankruptcies typically stay on your reports for seven years, while Chapter 7 bankruptcies stay on your reports for 10 years. Foreclosures will remain on your reports for seven years.

How much can late payments hurt your credit scores?

The impact of a late payment on your credit scores can vary depending on factors including:

• How severe it is

• How recent it is

• How frequently you’ve paid late

With a FICO® Score of 780 (on a scale of 300-850), being just 30 days late on a payment could drop your score to between 670 and 690, according to FICO. If your score was 680, having a payment reported as 30 days late could drop your score to between 600 and 620 according to FICO.

Bankruptcy could have an even bigger impact, according to FICO, potentially dropping a FICO® Score of 780 to between 540 and 560, while a 680 score could fall to between 530 and 550.

As you can see, the better the scores before a late payment or other adverse credit events, the more your scores could fall. According to FICO, that’s because borrowers with higher scores aren’t expected to pay late, whereas having lower scores means risky behavior is already factored in.


Next discussion… Tips For Improving Your Credit...

Tax Deductions & Tax School

March 6, 2021

The Secret To Small Business Deductions...Get Your Free E-Book


DOWNLOAD NOW

Investments

October 11, 2020

Knowledge Is A Treasure But Practice Is The Key To It- Lao Tzu

Good Players Practice 'Til They Get It Right...Great Players Practice 'Til They Never Get It Wrong....


eToro

Practice with a virtual account

After you sign up for eToro, you will receive a $100,000 virtual money account with which to experiment for free. This service enables you to hone your trading skills before risking your own funds. With your virtual account you can:

  • Open positions
  • Experiment with leverage, Stop Loss and Take Profit
  • Test different trading strategies
  • Practice copy trading
  • Invest in CopyPortfolios
  • Interact with the eToro community



Up Next…..investing in flipping houses….

Travel

October 11, 2020

Travel relieves stress and boosts mental health. A change in scenery and daily routine can reset your body and mind. Just planning a trip can boost your spirit. Traveling can also expand your mind. Meeting new people and experiencing other cultures also expands your awareness and increases your personal growth.

Most people do not travel because of money. Traveling is easier than you think. Finding good deals is easier now. Especially with the global pandemic. Traveling is just beginning to open back up.

Traveling around the world should be a goal for everyone. Everyone should experience other places at least once in their lives. Whether you choose to spend a few years or just a couple months traveling this beautiful planet, it’s important to see what’s out there. It’s up to you to make the dream come true and take the first step.

Next Up….Which location is the most visited and why….

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