How to Survive Construction Business Seasonality

One of the most difficult aspects of owning your own company is having to adapt to fluctuating business challenges. For many companies, business comes in cycles.  Some months are extremely busy where it seems almost impossible to keep up with demand. Then, you can have seasons where business slows down and things are too quiet. While all businesses experience some degrees of seasonal ebbs and flows, the construction industry is particularly impacted by slower sales during the colder months.

While there are other types of credit scores, FICO Scores have become the industry standard and are used by over 90% of lenders. You may be surprised to learn that you can actually have several different FICO Scores. Even though each of the 3 major credit reporting bureaus (Equifax, Experian, and TransUnion) use the FICO Score algorithm, the information they collect can vary slightly resulting in some small differences. Additionally, because some industries look at different criteria to determine creditworthiness, there are some industry-specific FICO Scores that are used by auto lenders and credit card issuers.

What is a FICO Score?

FICO uses 5 factors when calculating a score. The percentages listed below reflect how important each of the factors are in determining how your FICO Score is calculated. Payment history, for example, weighs more heavily than new credit.

The 5 factors are:

  • Payment History (35%) Do you have a history of late payments? Or do you pay your bills on time?
  • Amounts Owed (30%) How much of your available credit are you currently using? Your credit utilization ratio plays a large role in determining your FICO score.
  • Length of Credit History (15%) How long have you had your various credit accounts and what is their average age?
  • New Credit (10%) Have you recently opened up several new credit cards? Have there been any new inquiries on your credit report in the last 12 months?
  • Credit Mix (10%) Do you have a good credit mix (i.e., multiple types of credit like a mortgage, a car loan, and credit cards)?

How to Check Your FICO Score for Free

The 3 major credit reporting companies (Equifax, Experian, and TransUnion) are required by federal law to provide you with a free personal credit report every 12 months. You can request yours from annualcreditreport.com. Depending on your preference, you can either choose to request reports from all 3 agencies at once, or you can decide to order one at a time.

How to Check Your FICO Score for Free

Improve your score by:

  • Continually Monitoring Your Credit Reports and Disputing Errors q
  • Paying Your Bills on Time
  • Reducing Any Debts That You Owe

Check out our recent blog post, for step-by-step instructions on how to repair bad credit.

Don’t Have a Great FICO Score, but Need Capital for Your Business?

We understand that there’s so much more to you and your company than your FICO score. At SBG, we look at many different factors such as time in business, cash flow, age of a company, and annual revenue. Your credit only plays a role in determining which products you are approved for and what the terms of the loan will be. A typical bank only approves 15-20% of business loans, while SBG Funding has an 85% approval rate!

Ready to get started? Contact us today to learn more.

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