What’s a usage loan? And how does it raise your credit score?
Your credit card usage is reported to the three credit bureaus.
This impacts your FICO score.
Your FICO score impacts the funding and terms you can get for your real estate investments.
So what is a usage loan? Where does it come into all this?
Why Usage Matters
If you pay off your card balances before the next reporting cycle (before your next statement), then your FICO score will rise.
Disclaimer: your score will go up as long as everything else stays the same. As long as you have not taken out other credit, missed a payment, or created over negative credit issues, lowering your usage will have a
But if you had the cash laying around to pay off these balances, you probably would have done it awhile ago. How do you bring your usage down without cash? That’s where a usage loan comes in.
What Is a Usage Loan?
It’s a loan that makes life easier and more profitable for you.
A loan to correct the usage that negatively impacts your credit score and limits your access to GOOD leverage.
More specifically, it’s a private loan that does not report to your credit bureau that you can use to pay down your credit cards, thus increasing your credit score.
It tips the lending guidelines back in your favor AND gets you better, cheaper, and easier loans.
How to Get a Usage Loan
A usage loan isn’t meant to deceive your lender. You still have to let lenders know you have this debt.
If your debt was on a business card where they belong, it wouldn’t count against your personal credit. What a usage loan does is give your credit score a leg-up to get you the best funding you deserve.
Interested in discussing a usage loan? Let us know here.
For more info on getting credit ready for leverage, you can watch these videos.