Your credit score is powerful. A bad score can take you from making it big to losing a lot of money.
Especially in the real estate industry, your credit score plays a huge role in the success of your investing. We see many investors (especially ones who are new to the game) struggle with some common issues:
- Forgetting to pay bills on time
- Overusing credit cards
- Not using enough credit
Cultivating and maintaining a healthy score is a fine balance between creating debt and paying bills.
Why Do You Need Debt?
Without some debt, FICO doesn’t recognize you. Without debt, even if you try and calculate your score, you can only get a low one.
This isn’t helpful when you’re trying to purchase investment properties.
Essentially, debt allows your score to exist and gives it the chance to be high—you just shouldn’t have too much debt, and you need to pay your bills on time.
Consequences of a Bad Credit Score
If you end up with no debt, your credit score is likely to drop (or disappear altogether for a while).
With a low credit score, you can expect higher interest rates on your house, car, and any other loans you hope to take out.
This makes you lose money fast and can get in the way of your investing or even your retirement.
Consequences of a Good Credit Score
In contrast, if you have a high credit score, you can look forward to cheaper interest rates and lower bills.
This makes it far easier to create successful income from real estate investing.
Additionally, if you maintain a high score, you’re more likely to build positive relationships with lenders and grow your business more quickly.
What Can I Do About a Bad Credit Score?
This is where companies like us or Hard Money Mike come in.
If your score has dropped because of late payments, the best way to fix that is simply time. However, if it’s low from over-usage, you have some options!
So long as you are paying your bills on time and have a small amount of debt that keeps your credit score active, you can fairly easily raise your credit score with a usage loan.
We offer emergency usage loans here at The Cash Flow Company to raise your score FAST.&amp;amp;amp;amp;amp;amp;lt;/span>
Business Credit Cards
If you’re using personal credit cards for business-level investing, it’s time to re-evaluate.
Real estate investing simply requires more usage than personal credit cards are designed to reward. Business cards, on the other hand, typically like higher usage.
If this is new to you, we have many resources to help you find the right business card for you.
We’re always happy to walk you through the ins and outs of navigating your credit score.</span>
Having a healthy score is accessible to nearly everyone with the right coaching and tools. If you’re struggling with low credit, talk to us, and we’ll be happy to discuss your options.