The Times Herald (Norristown, PA)
You don’t have to be in debt to have a good credit score
WASHINGTON » There is a lot of misinformation about credit scores, but when it’s coming from someone who should know better, I want to scream.
During a recent online discussion, a reader asked me about something a lender told her.
Here’s the backstory: “I am working with a loan officer to refinance a property. This loan officer told me that the best way to boost my credit score would be to leave a small balance on my credit card every month. According to her, if I pay off the credit card in full every month, the credit card companies see a net-zero transaction and therefore don’t report anything to the credit bureaus. Since the reporting history doesn’t change, my credit score doesn’t decrease, but it doesn’t increase either. It just stays the same. She says the best way to increase your score quickly is to pay off mostly everything but leave a small balance every month.”
The advice seemed “counterintuitive,” the reader said.
This person’s gut was right. The advice is incorrect. I would find me another loan officer. What else is she getting wrong?
Before I get to why the recommendation is bad, let’s look at the FICO credit-scoring model most used by lenders.
The basic FICO score ranges from a low of 300 to a high of 850. (There are industry-specific scores that go from 250 to 900.) The two factors that impact your score the most — up or down — are your payment history and amounts owed. Understanding payment history is easy. You need to pay your credit
main a force in American culture inspires Shari Coulter Ford, who’s also had a long business career and co-founded Tohi Ventures, maker of Tohi, a beverage sold online.
“Over time, you really have to understand your audience, the market you’re going after, the technology changes and how it’s relevant to you,” says Ford, who sees Winfrey as having achieved those goals.
Moreover, Ford says, Winfrey isn’t afraid to show her vulnerable side, helping her win the loyalty of her audience.
“It hasn’t been so long ago that people started talking about emotional intelligence,” says Ford, who’s based in Kansas City, Missouri. “She exhibited that before that was popular in business.”
Watching a father succeed and fail
As Kent Mages grew up in Chicago in the 1980s and ‘90s, his father had a successful printing business. But as the growth of personal computers decimated the printing industry, the company failed. In the ensuing years, Mages, who’s had his own failures before launching his current business, learned about perseverance from his father.
“My dad never lost his desire to build something of his own, to take risks,” says Mages, owner of Custom Color 3D Printing. “Sometimes they panned out, sometimes they didn’t. But he never gave up.”
Spiritual and business role models
Cecy Martinez has been inspired by very different leaders: Norman Vincent Peale and Steve Jobs.
Martinez, who sells handbags under the label Cecy, discovered Peale in middle school. She learned from the late minister and author of “The Power of Positive Thinking,” “if you think you can, you can.”
“It really marked my attitude toward life, definitely toward business,” Martinez says. She realized she could leave a corporate job and start her Palm Beach Gardens, Florida-based company.
Jobs’ widely quoted admonition that “the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do” resonated with Martinez. So did his perseverance.
“He totally believed in what he was doing when everyone around him was saying no,” Martinez says.
Validation via Tyler Perry
When Donny O’Malley founded Vet TV, a streaming channel aimed at veterans, he believed in his project although he kept getting suggestions that he target a more mainstream audience.
Recently, O’Malley began looking at the career of filmmaker Tyler Perry, who got his start in the early 2000s aiming his work at African American audiences.
“He found enormous success as an artist and entrepreneur without trying to be mainstream,” says O’Malley, who’s based in San Diego.
O’Malley felt validated in his decision to keep focusing on veterans.
“Tyler’s right. We’re not changing a damn thing,” he says.
An unexpected connection
Al DiGuido was just a local guy who owned an ice cream shop and started a nonprofit to help sick children, or so DJ Haddad thought. Two years ago, when Haddad, who owns a digital design company, offered to help DiGuido with his website, he learned DiGuido had been CEO of digital marketing companies and a pioneer in Haddad’s own industry.
DiGuido became Haddad’s mentor.
“I’ve picked his brain on some of those matters like negotiating contracts,” says Haddad, whose company, Haddad & Partners, is based in Fairfield, Connecticut, where DiGuido’s Saugatuck Sweets is located.
Haddad says one reason why he admires DiGuido is because of his humility. DiGuido didn’t brag about his achievements.
Learning the basics from a CEO
Kevin Groome’s first job out of college in 1986 was editing quarterly reports at Hambrecht & Quist, a San Francisco-based investment bank that helped underwrite initial public offerings for tech giants including Apple. Groome’s editor was co-founder Bill Hambrecht.
“Getting my copy past Bill’s editorial pen was like an intensive MBA course every three months,” Groome recalls. Hambrecht’s expertise taught Groome other lessons that later helped him as founder of Pica9, a New York-based digital marketing company. Among them: how to communicate bad news to investors and to not micromanage staffers. And to have an upbeat attitude.
“One (idea) that really stuck with me was change, whether for good or for bad, is creating an opportunity,” Groome says.