Tag Archive for: credit card

How to Fix Credit Usage Quickly

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High usage lowers your score. Here are 3 ways to fix credit usage quickly.

From our 20+ years of working with real estate investors, the number one reason we see them pay too much for funding is their credit scores are artificially lowered by their normal business needs.

How does this happen? And how do you fix it?

How Usage Impacts Your Credit Score

Many investors put their business expenses on a personal credit card. As long as it gets paid off eventually, no problem, right?

Unfortunately, when the ratio between your balance and your credit limit is high (aka, credit usage), your credit score takes a hit.

But you need credit cards to keep projects (and your business) growing.  The problem is: you either have to wait until you pay off the cards after selling the current project to start your next project, or… Pay over-inflated prices for money.

Let’s look at 3 ways to fix that.

3 Ways to Fix Credit Usage Quickly

  1. Move the cards off your personal name and onto business cards that don’t report on your credit. Some business cards do reflect on your personal credit, so make sure to ask about that before committing to a card. Here is one option you could look into.
  2. Call your current cards and ask them to raise your available limits. The problem isn’t that your balance is high. The real issue is that you’re using too high a percentage of your credit.
  3. Obtain a private loan that does not report on credit to pay off the cards. This raises your score so you can get better funding before paying off the card.

Getting Help to Fix Credit Usage

Interested in discussing a usage loan? Let us know here.

For more info on getting credit ready for leverage, you can watch these videos.

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How to Get Cash From a Credit Card

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Credit Myth: “I can’t get cash from a credit card for my real estate investments.”

We believe every real estate investor benefits from having a business credit card.

But only so many types of expenses can actually be put on credit. What if you need cash to cover a down payment, earnest money, paying certain contractors, and more?

There are lots of expenses in real estat investing that don’t take a credit card. So, how much good is a business card, really?

Fortunately, there’s a simple way to get cash from a credit card.

Getting Cash from a Credit Card

Most credit cards come with an option for a cash advance. But these come with limits that are usually well below what you need for cash purchases in the real estate world.

So how can you pull off getting cash from your credit card even above your credit card’s cash limit?

There’s a service called PlastiQ.

They charge your card and convert it to a wire, ACH, or check. So you can use up your full credit limit to as cash funds.

PlastiQ does charge a fee for this service, but it’s typically lower than your credit card company’s advance fee.

If you want to talk to someone about this service, here is a direct contact for you: Michael Locke, michael.locke@plastiq.com.

(This is not a paid referral – just a service we really think most investors should have in their bag of tricks.)

More on Credit & Investing

Have other questions about using credit cards in real estate investing? Need help setting it up? Reach out to us at The Cash Flow Company. We’re always happy to help.

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Business vs Corporate Credit: What Exactly Do You Need for Your Real Estate Investing Business?

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For your real estate investments, do you need credit? Does it matter between business vs corporate credit?

We highly recommend that real estate investors use a business credit card for their projects’ expenses.

They save your personal credit score, and you can get some types of cards for 0% interest rates for at least the first year. You can’t beat that low of a rate!

To be clear, however, we’re talking about business credit cards, not corporate credit. Why does that distinction matter?

How Corporate Credit Differs from Business Credit

Corporate credit is next-level and will take some time to obtain. But if you are interested, here is the link.

The major difference between corporate and business credit is how they decide you’re qualified.

  • Business credit is based on your personal credit score. It requires you to personally sign on the debt.
  • Corporate credit is based on your Dun & Bradstreet score. It does not require you to personally guarantee the debt.

Corporate debt takes time and typically does not start with (or get to the point of) issuing credit cards… Especially to us small companies.

Why You Should Use a Business Card in Real Estate Investing

If you use credit in investing, a business credit card is what you need. It accomplishes two big items for funding:

  1. It keeps business purchases from impacting your personal score. Then, your credit score doesn’t negatively impact your other funding.
  2. It won’t show up on your report for lenders to officially count it against you when calculating your debt ratio.

Business credit cards keep debt from impacting your personal funding options.

How Hard Is It to Get Business Credit vs Corporate?

Assuming you have everything you need to get a business card, including a high credit score, a business or sole proprietorship, and a good, non-real-estate related business name, getting a credit card is relatively straightforward. 

Go to a site like bankrate.com or Credit Karma to pick the card that’s best for you. You can also visit Nav’s list of business cards to compare different types.

If you keep balances, then you may want to look at cards with 0% intro rates. You can change them out every year and save a lot of money.

How to Get Business Credit

If you need to set up a business or improve your credit score, reach out to us at The Cash Flow Company. We have ways to help raise your credit score fast, and can guide you in setting up a business.

You can also check out Fund & Grow. Ask us about the discounts they gave us to pass on to you!

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Solve Your Credit Problems: Business Credit Cards for Real Estate Investors

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Here’s how business credit cards for real estate investors impact your credit.

You rack up business expenses on your personal credit card for your real estate investing business, and now… Your credit score is too low to get more loans to keep your real estate investing business going.

What’s the answer to this dilemma? Business credit cards for real estate investors.

Personal Credit vs Business Loans

A lower credit score makes it harder to obtain the loans you need in your personal life, such as:

  • Car loans
  • Home loans
  • Student loans
  • Credit cards
  • Boat loans

But your personal credit doesn’t only impact your personal loans. It also impacts the loans you get for your real estate business – which are based on your personal credit score. Whether or not you can get a loan, or how good the terms of the loan is, depend on your credit score.

You need credit cards to keep your real estate projects and business going. What you don’t need, however, is that credit usage driving down your personal score and costing you tens of thousands to hundreds of thousands of extra interest over the years.

What Do Business Credit Cards Do For the Real Estate Investor?

Business credit cards can help solve this problem of usage.

Business credit cards for real estate investors remove your balances from your personal credit, fixing the problem created by the need to use the cards for your projects.

These cards don’t show up on your personal credit, so they don’t drive down your score or get counted against your debt ratios for new loans.

Your business expenses become business debt when put on a business card.

Getting a Business Credit Card as an Investor

Using a business credit card as an investor gives you the benefit of using a card, making accounting easier and not negatively impacting your personal score.

If your investing career is a business, you should be working to obtain a business credit card. Reach out to us to ask how to get started.

And for more credit score tips, check out these videos.

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