Three reasons to invest in the Square IPO (when it finally arrives)

Here are three reasons to invest in the Square IPO, even before we’ve gotten a chance to look at any financial documents.

One of the more exciting start-ups in the tech space comes in the form of a pocket-sized, half-inch plastic square. Said plastic square can be plugged into the audio jack on your iPhone, Andoid, iPod or iPad and transformed into a mobile credit card processor. That’s the premise behind Square – an inspiring start-up with 100 employees based in San Francisco. The IPO rumors haven’t started up yet, but there are lots of reasons to be excited about this small company (even before we’ve gotten a chance to look at any financial documents). Here are three reasons to invest in the Square IPO (when it finally arrives):

1) Leadership. Investing icon Warren Buffett argues that you shouldn’t invest in companies but rather people. “You can have the greatest goals in the world, but if you have the wrong people running it, it isn’t going to work,” he said recently. “On the other hand, if you’ve got the right person running it, almost anything is possible.”

Without question, Square’s got an excellent pedigree. One of the company’s co-founders, Jack Dorsey also co-founded Twitter, rising at one point to serve as CEO (he’s now a chairman working on product development and growth). That takes up a mere 8 to 10 hours of his day. After that, he ambles down the road to clock another 8 to 10 hours of work at Square.

“Most people have major positions at companies and they’re also raising families,” Dorsey told Fortune last week. “They have two-year-olds. I have it easy.”

Best of all, Dorsey seems to possess a sense of a wonder that he uses to inspire the developers working below him. He does that in part with his weekly “town square” meetings where he takes 15 minutes or so to talk values and aspirations with his employees.

In a recent town-square meeting, he compared what Square’s doing to building the Golden Gate Bridge: “Every single aspect of this is gorgeous,” he said (per TechCrunch). “So your homework this weekend is to cross this bridge, think about that, and also think about how we take those (design) lessons into doing what we do, which is carry every single transaction in the world.”

2) The volume game. Numbers aren’t readily available, but we do know that Square is “processing millions of dollars in mobile transactions every week,” according to NPR. Let’s conservatively say the site’s processing $2 million in transactions weekly. That’s good for more than $225,000 in revenue. Not bad for a company that just opened its doors to clients nine months ago. The key here is scale. By poaching a huge number of transactions and reaping 2.75 percent of every sale, the company needs to consistently grow it’s user base to move toward profitability. The numbers look good so far.

3) The writing on the wall. Your head is planted firmly in the sand if you’re not convinced that credit cards are going the way of the dodo bird. In fact, I’d argue that it’s not just your head that’s buried in sand; it’s your torso, midsection, legs and feet, too. The smartphone is transforming into a mobile wallet. Every major credit card company in the world has started forays into the mobile payment processing realm and few have made it as simple as Square.

Merchants get their card readers for free. They pay no monthly fees, and they can use it as little or as often as they like. In fact, we might even use it to give our friends a few bucks for the cab we’re sharing one day. If Square can keep gobbling up marketshare while PayPal, Visa, Mastercard and others are still scribbling on whiteboards, they’re either going to IPO or get bought out. And either scenario will likely be a boon for shareholders.

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How to improve your credit score in six months

In general, it takes nine months or a year of making payments on time and performing some simple credit-related tasks to improve your credit score substantially. If speed is of the essence, though, here are five tips to help you incrementally improve your credit score in six months.

While we tend to think of credit scores as static numbers, that’s just not the case. Credit scores – and the factors used in calculating those scores – change frequently. A recent survey by VantageScore Solutions and Consumer Federation of America (CFA) found that Americans have had trouble keeping up with changes in credit score reporting and the implications those reports may have.

“The good news is that a large majority of consumers know the key factors used to calculate scores and the creditors who use these scores,” CFA Executive Director Stephen Brobeck said recently. “The bad news is that consumer knowledge has lagged behind recent changes in the credit score marketplace.”

Educate yourself on credit scores and credit reporting agencies and you’ll be in a great position to improve your credit score quickly. To substantially raise your credit score in six months is difficult. In general, it takes nine months or a year of making payments on time and performing some simple credit-related tasks to improve your credit score substantially. If speed is of the essence, though, here are five tips to help you incrementally improve your credit score in six months:

1) Do the things you’re supposed to. We all know the two most important factors affecting your credit score are your ability to make payments on time and the amount of debt you’re carrying on your credit cards and in your credit accounts. Spend the next six months paying down your balances, and be particularly careful to pay ALL of your bills on time.

2) Spread your balances out across multiple cards. This might not allow you to capitalize on the lowest interest rates, but it should help you quickly improve your credit score. Having a large amount of available credit but still carrying a high balance on a single card can actually hurt your score. Ideally, your credit card balances should be less than 25 percent of the total available credit for that specific card. Spreading your debt out, therefore, can raise your credit score.

3) Limit the number of accounts you carry with a balance. FICO high achievers have an average of just three credit cards (or accounts) that carry a balance. If you have more than three credit cards with balances, do your best to consolidate the debt. If you can spread your balances across three credit cards without using more than 25 percent of the available credit on each card, you’ll be in great shape.

4) Don’t apply for new credit. It may be appealing to open a new credit card account out of the hopes of doing a zero- or low-interest balance transfer, but every time you apply for new credit, your credit score will get dinged. If you’re serious about improving your credit score quickly, use only the resources you currently have available.

5) Don’t close any of your credit card accounts – even if they’re not carrying balances. The age of your credit accounts plays a big role in your credit score. If your oldest credit card is a tattered Target card, keep the account open – even if you plan to never use it again. Credit reporting agencies consider the age of your oldest account when factoring your credit score.

Last but not least, try to educate yourself on ways to improve your credit score. If you can avoid using credit repair services, you’ll be much better off in the long run. “Consumer protection officials agree (credit repair services) often overpromise, charge high prices, and perform services, such as correcting credit report inaccuracies, that consumers could do themselves by just contacting the lender and the credit bureaus,” the CFA says.

You may also consider talking to your local bank to see if they can offer any low-interest options to help you pay off your debt faster. Many banks offer so-called signature lines of credit that do not require collateral and typically charge interest rates that are lower than rates charged by credit card companies.

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