Credit Score 911 How to Qualify for a Utilization Loan
A utilization loan, or 911 utilization loan is useful for both flippers, as well as real estate investors. Unfortunately, not everyone can qualify for a 911 loan, but it is available to those who pay their bills on time and need to quickly raise their credit score. Many of the clients we see get stuck in the trap of using their personal credit cards for business expenses. This in turn can have a significant impact on credit scores in the long run. There are three things that we look for to determine if you qualify for a utilization loan. Let’s take a closer look!
First, make sure payments are on time.
This loan is ideal for clients who spiral into personal credit card debt from using their cards for business expenses. The most important requirement to qualify is that they have been paying on time every month. If you haven’t been paying on time, then you will need to get back on track in order to be considered.
Second, have something to secure the loan with.
We are an asset-based lender and require a piece of real estate to secure the loan. We want to not only ensure that we have the security for lending, but that you also have leverage for your next step.
Third, how do you pay a usage loan back.
In using the 911 loan, you are able to increase your credit score. Which, in turn, allows you to get your next loan, qualify for a refinance, purchase your next flip property, and so much more! However, it is important that you think ahead about how to pay off this usage loan once you get back on track. This can be done by either getting cash out or using a HELOC to pay us off.
Is a usage loan right for you?
We have a client for example with 200K in credit card debt who is paying 6-7K per month now. By doing the 911 loan, we were able to cut their debt in half to 3K per month in credit card payments. Another client was able to raise their credit score 12 points and receive a HELOC. While someone else was finally able to qualify for a SBA loan. Again, this is not a long-term loan! This is a 911 loan that will help get your credit score back on track and provide the leverage you need to be successful.
How can we help you?
Not sure if you would qualify for a credit utilization loan or where to go next? We have resources that can help guide you through the process. It only takes about 10 to 15 minutes to run through the information and see if we can help. After that, we will also help to set things up correctly to ensure you aren’t faced with these issues again.
Before reaching out, there are a few things you can do to see if this is the right move for you and your business.
- Go to MyCredit, MyFico or another credit website to run a simulator. This will show how your credit score is impacted once you pay off certain debt.
- Look at your payments and leverage. Are you paying everything on time, and do you have a real estate property that can be used to secure the loan?
- How can you get out of it in less than 12 months? You need to have a way to pay off the 911 loan in a short period of time.
These are good loans for real estate investors who are trying to get credit card payments paid down. So many people go into credit card debt, and it can take a year or two to recover by paying them off as they build. It’s easier however, to pay 8-10% interest on a HELOC then 29% interest on a credit card.
Go to our website to fill out an app and set up an appointment to discuss more. The more information you can give us, the more we can do to get you back on track!