BEDC Frequently Asked Questions
FAQs - Business
1. What types of businesses do you counsel?
We work with both start-ups and established businesses. About 65% of the BEDC business clients are start-ups seeking information regarding the formation of a business, help developing a business plan, or help in formulating a marketing strategy; about 30% of our clients are small to mid-size companies seeking to expand and are looking for help in analyzing their expansion strategy or creating an expansion business plan for the purposes of borrowing money, and about 5% of our clients are individuals seeking to purchase and existing business seeking help in trying to value the business they want to purchase and/or creating a business plan with the intent of borrowing money from a bank.
2. What counseling services does the BEDC provide?
Although our counseling is broad-based, the most frequent counseling requests involve:
- Determining the steps in business formation including registering a business
- Determining whether or not a Tax ID number is needed
- Helping to acquire sales tax number
- Determining what type of insurance is needed
- Determining whether or not a company needs to be bonded
- Helping the business research demographics and competitors
- Improving the owner’s credit to qualify for a business loan
- Creating a business plan
- Helping the business create a proforma profit and loss statement
- Helping the business analyze their potential for acquiring a business loan or finding an investor
3. What fee does the BEDC charge for counseling?
Counseling if free, however, if it is necessary to pull a credit report we currently charge $20 per report.
4. What is the background of the counselors?
BEDC business counselors are semi-retired former successful business owners.
5. Does the BEDC give or help arrange business loans?
6. Does the BEDC know of any business grants that might be available?
No. However, below are links to sites that list business grants. We make no representation that any grants listed are actually available or are legitimate. We encourage you to do your own due diligence on any potential loan or grant you might be interested in.
Small Business Administration: https://www.sba.gov/category/navigation-structure/loans-grants
7. Do I need an appointment to see a counselor?
Yes. The BEDC works on an appointment basis. Please call us at 432-684-4309 and make an appointment.
FAQs - Credit
1. Will having you pull my credit report hurt my credit score?
No. The report we pull is a “soft” pull, meaning it does not impact your credit score at all.
2. How can the BEDC help me with my credit?
The counseling you receive from the BEDC will help you identify the items on your credit report hat are hurting your credit, as well as those that are helping your credit. Once we identify the items that are having a negative impact on your credit we help you create a workable plan to address and correct those issues. Our goal is to help you gain control of your credit and improve your credit standing by showing you what steps you need to take in order to create the positive credit you need and want.
3. Why should I use the BEDC rather than hire a credit repair company?
The credit counseling services of the Midland College Business and Economic Development Center are offered to the members of the community as a service, we are not a for-profit company. Our services are free with the exception of the small $20.00 credit report fee we charge. There is nothing legal the credit repair companies do that we don’t do. We help you identify your credit issues, help you prepare any letters you need to send to a creditor or credit bureau, identify erroneous information, identify what positive credit you may need to acquire, and create a workable plan to improve your credit standing.
What we won’t do is have you dispute negative information on your credit report that isn’t erroneous, suggest you get a new (and illegal) social security card or identity or make unethical claims or statements to a creditor or credit bureau.
4. What is a “tri-merged” credit report?
There are three major credit repositories that most lenders rely on for credit information about people looking to borrow money. Those repositories are Equifax, Experian, and Trans-Union. Although most of the information about ou the repositories have is the same for all three bureaus, each does have some unique information about your credit history. Consequently, each credit repository’s credit report will be a little different and the credit score they have for you will also be different.
When you want to work on improving your credit you need a credit report from each of the three repositories. You could pull a credit report from each or, as we do, pull a single credit report that merges all three repositories into one, easy to read, report. Not only is a merged report easier to read, it is also far cheaper than pulling three separate reports.
5. What is a credit score?
The information the credit repositories use to generate a credit score has to do with how well or how poorly you have paid your debts in the past. The actual formula for creating a score is:
- 35% of the score is your payment history. Did you make your payments and did you make them on time?
- 30% is how much outstanding debt you have right now. How much do you owe and how many accounts do you have?
- 15% is the length of time you’ve had credit. Is your credit history short or have you had good open accounts for many, many years?
- 10% is they types of credit you use. Do you have more than one type of credit such as a credit card and an auto loan or do you just have one type of credit such as 3 credit cards and no loans? The repositories want to see that you have more than one type of credit, what they consider a healthy mix of credit.
- 10% is new credit. Have you opened new credit accounts lately? Opening too many new accounts too quickly can hurt your credit score.
An easy way to think of a credit score is it is simply the repository’s computer’s estimate based on your credit history of your ability and willingness to pay your debts on time. The higher the credit score, the more confident the lender is of being paid.
6. What is a “good” credit score?
In general credit scores range from a low of 350 to a high of 850. No one has a score of 350 or 850, everyone’s score is somewhere between the very low and the very high. In today's market most lenders rate scores:
Depending upon what you are looking to borrow money for there may be specific credit score targets you need to reach. For example, if you want to buy a home most lenders want your middle score (they throw out the highest and the lowest scores and take the middle one as the best reflection of your credit history) to be at least 640. However, some lenders will take a middle score as low as 620 or even 600. If you want the best rate on a car loan your lender may require a credit score of 690 or higher.
Unfortunately, no one can answer that question but you. The truth is improving credit isn’t an overnight process. How much time it takes will depend on what issues you need to address and how quickly you can address them. Are their collections, judgments, or liens that must be paid? Are there collections that can be ignored? Do you have good open credit or will you have to open new credit in order to begin building good credit?
The one thing we can say confidently from the hundreds of people we have helped improve their credit, improving your credit is simply a matter of knowing what to do and then doing the rght things. No matter how poor your credit may be right now, if you do the right things you can have the credit report and credit score that you want. But again, how long it will take depends on you.
7. Do I need an appointment for credit counseling?
Yes. The BEDC works on an appointment basis. Please call us at 432-684-4309 to set an appointment.
FAQs - Housing Counseling
1. How much does housing counseling cost?
Free. However, we do currently charge $20.00 for each potential borrower every time we pull a credit report, which is usually only once or twice a year.
2. Who should attend counseling?
We recommend everyone who will be named on the mortgage loan. Also, any first time homebuyers and anyone who hasn’t purchased a home in a number of years would benefit.
3. What if a person to be named on the mortgage loan is unable to attend counseling?
We recommend the individual unable to attend counseling have their credit report pulled, we need a signed letter stating the person attending counseling can be provided a copy of their credit report.
4. Can I bring my own credit report?
Yes. If you would rather we work with a credit report you already have we will do so, as long as the credit report is relatively recent, generated within the last 60 days, and includes all three credit repositories.
5. Can I trust the housing counseling provided?
The Midland College Business and Economic Development Center is a HUD-approved housing counseling agency. You can find us on the listing of HUD-approved housing counseling agencies at: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
6. What are the benefits of housing counseling?
As housing counselors, we work with potential home buyers to help them identify credit issues and the steps necessary to improve their credit to be able to qualify for a mortgage; help them figure out how much home the will qualify for and create a plan to reduce debt if necessary; and help them create a budget and savings plan if needed in order to accumulatethe dollars necessary to purchase a home.
We work with individuals wanting to purchase a home to help them become “mortgage ready.” Mortgage ready simply means that they will qualify for a mortgage before they engage a realtor or go to see a mortgage loan officer.
A lender qualifies a borrower in these areas:
- Credit - usually meaning the borrower needs a good credit score
- Ratios - debt to gross income, meaning that the debts such as loans, car payments, credit cards and the like and their proposed house payment cannot exceed a certain percentage of their gross monthly income; and
- Enough money in the bank to pay the required down payment, closing costs, prepaids such as taxes and insurance, and any required reserves.
7. Does the BEDC give home loans?
8. Does the BEDC provide down payment assistance?
No. However, we know of down payment assistance programs at the local and state level.
9. How long does counseling take?
The initial counseling session typically lasts 45 minutes to an hour, maybe slightly more. After the initial session we will get with you either in-person, by phone or email on a regular basis, about every 60 days to monitor your progress, give encouragement, answer any questions you may have, and help you overcome roadblocks you encounter while implementing the steps to become mortgage ready. As a HUD approved housing counseling agency we are required to stay in contact with you every 60 days until you’ve reached your goal or choose to leave the program.
10. Do I need an appointment for housing counseling?
Yes. The BEDC works on an appointment basis and an intake packet needs to be completed prior to making an appointment. Please call 432-684-4309 for an intake packet or download packet here, http://www.midland.edu/for_the_community/bedc/housing.php.