Tag Archive for: credit cards

How to Read My Credit Card Bill?

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Today we will be discussing a question that many people have, “how to read my credit card bill.” Your credit card statement holds the key to understanding your finances, credit usage, and interest charges. By knowing how to read it properly, can help you improve your credit score and get better loan terms for your real estate investments. Let’s break it down step by step.

Why Your Credit Card Statement Matters

Fist and foremost, your credit card bill isn’t just a list of purchases, it affects your credit score, loan approvals, and interest rates. If you manage it well, you can:

  • Boost your credit score
  • Qualify for better financing
  • Reduce interest payments
  • Improve cash flow for your real estate projects

Let’s dive into what each section of your statement means and how to use it to your advantage.

Key Sections of Your Credit Card Statement

1. Statement Balance vs. Current Balance

  • Statement Balance: The amount you owe at the end of the billing cycle. This is what’s reported to the credit bureaus.
  • Current Balance: This includes any new charges after your statement closing date. Paying this in full may not be necessary, but it helps reduce interest.

2. Payment Due Date

  • This is the last day to make a payment without a late fee.
  • Paying on time is crucial for maintaining a high credit score.

3. Minimum Payment

  • The lowest amount you must pay to avoid late fees.
  • Only paying the minimum can lead to high interest costs.

4. Credit Utilization (Usage Rate)

  • Usage is the percentage of your available credit that you’ve used.
  • Keeping it below 30% helps maintain a strong credit score.
  • Example: If your credit limit is $10,000 and your balance is $5,000, your usage rate is 50%—too high!

5. Statement Closing Date

  • This is when your balance is reported to credit bureaus.
  • Pro Tip: Paying down your balance before this date can lower your usage as well as boost your credit score before applying for a loan.

6. Interest Charges and APR

  • If you carry a balance, you’ll see how much interest you’re paying.
  • Tip: Avoid interest by paying your full statement balance each month.

7. Transactions and Fees

  • This section lists all purchases, cash advances, as well as fees.
  • Review it for errors or fraudulent charges.

How to Use Your Statement to Improve Your Credit Score

1. Pay Down Balances Before the Closing Date

  • Credit bureaus look at your balance on the statement closing date.
  • Paying it down before this date lowers your usage rate and increases your score.

2. Keep Usage Below 30%

  • Aim for under 29% of your total credit limit.
  • Example: If you have $20,000 in credit, keep balances below $5,800.

3. Pay on Time, Every Time

  • 35% of your credit score depends on payment history.
  • Set up autopay or reminders to never miss a payment.

4. Use Business Credit Cards

  • Some business credit cards don’t report usage to personal credit.
  • This keeps your personal score high while still using credit for your investments.

How This Helps Real Estate Investors

Additionally, your credit score directly impacts your ability to secure loans, lines of credit, as well as the terms you receive. A higher score means:

  • Lower interest rates on loans
  • Higher loan amounts with less money out of pocket
  • Faster approvals with fewer restrictions

By managing your credit card statement wisely, you can keep more money in your pocket and grow your real estate portfolio with ease.

Final Steps: Take Action Now

First, Check your statement today and find your closing date.

Second, Pay down your balance before the closing date to reduce usage.

Third, Keep usage below 30% to maintain a strong credit score.

Fourth, Use business credit cards to separate personal and investment expenses.

Finally, Monitor your credit score and adjust your strategy as needed.

Taking control of your credit card bill is a simple yet powerful way to improve your finances. By following these steps, you’ll be on your way to better loan terms and more profitable investments!

Contact us today to learn more about setting yourself up for success!

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What is Credit Usage?

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Today we are going to answer the question, “what is credit usage?” Your credit usage plays a crucial role in determining your credit score. If you’re applying for a DSCR loan, fix-and-flip loan, or a business line of credit, your credit usage could mean the difference between high-interest rates or securing the best loan terms. Understanding how it works and how to optimize it can help you save money, get better financing, and keep more cash in your pocket. In this guide, we’ll break down everything you need to know about credit usage and how to improve it before applying for a loan.

A Simple Trick to Improve Your Credit Score Before Applying for a Loan

This has a huge impact on your credit score. Whether you’re applying for a DSCR loan, fix-and-flip loan, or a business line of credit, a higher credit score means better loan terms, lower interest rates, and more money in your pocket.

The good news? There’s a quick, legal trick to improve your score before applying. It all comes down to timing when you pay off your credit cards.

Why Credit Usage Matters

Credit usage, also called credit utilization, is the percentage of your available credit that you are using. It makes up 30% of your credit score, which is nearly as important as making on-time payments.

If you use credit cards for everyday expenses, real estate investing, or business purchases, your balance can hurt your score even if you pay in full each month. High balances at the wrong time—like when lenders check your credit—can lead to higher interest rates or loan denials.

How Are Interest Rates Affected

Lenders use a pricing matrix to determine your loan terms. A lower credit score means:

  • Higher interest rates
  • More fees
  • Lower loan-to-value (LTV) ratios
  • Potential loan denial

For example, a 720+ score can get you lower rates and higher LTVs, while a 680 score may add extra fees or even disqualify you from certain loans.

Understanding Credit Usage

How is it Calculated?

Credit usage is the amount reported on your statement divided by your total credit limit.

Example:

  • Credit Limit: $10,000
  • Statement Balance: $5,000
  • Credit Usage: 50% ($5,000 / $10,000)

The goal is to keep usage below 30% and ideally between 1-29%.

When is it Reported?

Your credit card issuer reports your balance to the credit bureaus on the statement date—not the due date!

So even if you pay your card in full, a high balance on the statement date can still hurt your score.

The Trick: Pay Down Balances Before the Statement Date

Instead of waiting until the due date, pay your balance before the statement closes. This way, your credit report shows a lower balance and reduces your usage percentage.

Steps to Optimize Your Credit Usage

  1. Find Your Statement Closing Date
    • Look at your most recent statement.
    • Find the closing date (not the due date).
  2. Pay Down Balances a Few Days Before
    • Target below 30% usage for all personal credit cards.
    • Do not pay it down to zero—keep at least 1%.
  3. Check Your Credit Score Before Applying
    • Use a free credit report tool to confirm updates.
    • Ensure your usage reflects the lower balance.

Personal vs. Business Credit Cards

Not all credit cards report to your personal credit.

  • Personal Credit Cards – Almost always report to credit bureaus.
  • Business Credit Cards – Some report, but many do not.

Solution: Use Business Credit Cards

If you use credit cards often, switch to business credit cards that don’t report to your personal credit. This keeps your personal score higher while still giving you access to funds.

Example: Improving Credit Usage Before a Loan

Imagine you have three personal credit cards:

Credit Card Limit Balance Usage %
Capital One $10,000 $5,000 50%
Chase $5,000 $4,000 80%
Amex $10,000 $7,500 75%
Total $25,000 $16,500 66%

This high usage hurts your credit score. But if you pay down balances before the statement closes, you can drop your usage below 30%, boosting your score and improving your loan terms.

After payments:

Credit Card New Balance New Usage %
Capital One $1,000 10%
Chase $0 0%
Amex $2,500 25%
Total $3,500 14%

Now, you’re under 30% usage, which can boost your score by 30-50 points and get you better loan rates.

Next Steps

  • Before applying for a loan, check your usage and pay down balances early.
  • Use business credit cards to prevent high balances from affecting your personal score.
  • Check out 0% business credit cards to keep your financing costs low.

By managing your credit usage the right way, you’ll save thousands on interest and secure the best loan terms for your real estate deals!

Contact us for more information about how to calculate your credit usage!

Watch our most recent video to find out more about: What is credit usage?

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Today we are going to discuss the #Trick 1 you need to try before your next loan application. Are you preparing to apply for a loan? Whether it’s a DSCR loan, fix-and-flip financing, or a line of credit, there’s one simple trick to boost your credit score and secure better terms. Let’s walk through this quick, legal strategy to save you money on rates, fees, and more.

Why Your Credit Usage Matters

Before diving in, let’s get clear on why credit usage is key. Credit usage, or utilization, makes up 30% of your credit score. This is the balance reported to credit bureaus divided by your total available credit limit. The lower your usage, the higher your score—and that directly affects:

  • Your loan-to-value ratio (LTV)
  • The interest rate you qualify for
  • Your overall loan approval chances

What’s the Goal?

Keep your credit usage below 30%. Anything lower shows lenders you’re financially responsible. However, avoid a 0% balance—credit bureaus prefer to see some usage.

Here’s an example:

  • Credit limit: $10,000
  • Current balance: $5,000
  • Usage: 50% (too high!)

To hit the ideal range, bring your balance under $3,000, or 29% usage.

How to Lower Credit Usage

  1. Find Your Statement Dates
    Check your credit card statements for the closing date. This is when your balance is reported to credit bureaus.
  2. Pay Before the Statement Date
    Pay your balances before the closing date to ensure the lower amount gets reported.
  3. Focus on Credit-Reporting Cards
    Personal credit cards and some business cards (like Capital One) report balances to credit bureaus. Use these cards strategically, or switch to non-reporting business cards to avoid usage issues altogether.

Quick Example:

Let’s say you have the following cards:

  • Capital One: $5,000 balance, $10,000 limit
  • Chase: $4,000 balance, $5,000 limit
  • American Express: $7,500 balance, $10,000 limit

Total credit: $25,000
Current balances: $16,500
Usage: 66% (too high!)

To get under 30%, pay down:

  • $2,000 on Capital One
  • $4,000 on Chase
  • $5,000 on American Express

New balances: $5,500
Usage: 22% (perfect!)

Why It Pays to Try This

Lowering your credit usage before applying for a loan can:

  • Improve your credit score
  • Qualify you for better interest rates
  • Save you thousands over the loan term

For example, a DSCR loan could offer an extra point off your rate by simply boosting your score. Over a 30-year loan, that’s a huge savings!

Final Thoughts: Stay Ahead of the Game

This trick is simple but effective. Anytime you’re applying for new credit, check your usage, know your statement dates, and pay down balances early. If you’re tired of juggling personal credit cards, consider switching to business cards that don’t report to bureaus.

Want to learn more about setting up the perfect money bucket to fund your deals? Check out our guide here.

Watch our most recent video to find out more about: #Trick 1 You Need to Try Before Your Next Loan Application

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Today we are going to discuss the biggest mistake real estate investors make! Real estate investing can be rewarding, however it also comes with challenges. One of the biggest mistakes investors make is not being “money ready.” To clarify, this lack of preparation can lead to delays, added costs, as well as a reductions in profits. Let’s break this down and look at examples in order to understand why being money ready is essential.

What Does “Money Ready” Mean?

Being money ready means having enough funds available to cover the full scope of a project. This includes:

  • Purchase price
  • Rehab costs
  • Carry costs (taxes, insurance, interest payments)
  • Unexpected expenses

It’s not just about having cash in the bank. You need accessible funds like credit lines, reliable backup resources, or supportive partners.

The Tale of Two Investors

Here’s a real-world example of how being money ready can either make or break a project.

Investor #1: Money Ready and Profitable

Investor #1 planned their project meticulously:

  • ARV (After Repair Value): $400,000
  • Expected Profit: 15% or $60,000
  • Timeline: 6 months, from purchase to sale

They encountered an unexpected $7,500 expense during the rehab (such as old wiring or plumbing behind a wall). Because they had funds readily available, they handled the issue immediately as well as kept their contractors on schedule. As a result, they finished the project a month early, saving additional carry costs.

  • Final Profit: $55,000
  • Project Duration: 5 months

Investor #2: Unprepared and Stressed

Investor #2 started with the same expectations but wasn’t money ready. When the same $7,500 unexpected expense came up, they had to scramble for funding. This delay caused:

  • Contractors to move on to other jobs, creating scheduling issues.
  • A project timeline extension of 4 additional months.
  • Extra carry costs of $12,000 ($3,000 per month for taxes, insurance, and interest).

To make matters worse, the slower timeline also pushed the project into a weaker selling season. They had to drop their price by 5% ($20,000) to attract a buyer. Additionally, their lender charged a $5,000 extension fee for going beyond the loan’s 9-month term.

  • Final Profit: $15,000
  • Project Duration: 10 months

Why Money Readiness Matters

Delays as well as unexpected costs are common in real estate investing. Without enough funds to handle surprises, you risk:

  • Missing optimal market windows (like spring or fall selling seasons).
  • Losing profits to prolonged carry costs and price drops.
  • Increased stress from juggling financing and contractor schedules.

How to Get Money Ready

To avoid these pitfalls, aim to have 20-40% of the total project budget available in accessible funds. These funds can come from:

  • Savings
  • Lines of credit
  • Credit cards (used strategically)
  • Supportive partners

For example, if your project’s total budget is $300,000, plan to have $60,000 to $120,000 in accessible funds. This cushion ensures you’re prepared for any hiccups without derailing the project.

The Cost of Not Being Ready

Let’s revisit Investor #2’s project:

  • Unexpected Expense: $7,500
  • Additional Carry Costs: $12,000 (4 extra months)
  • Price Drop: $20,000 (5% of $400,000)
  • Extension Fee: $5,000

Their original $60,000 profit dwindled to just $15,000, a $45,000 difference. Meanwhile, Investor #1 stayed on track, kept stress low, and moved on to their next profitable deal.

Speed Is the Name of the Game

In real estate, speed matters. The faster you:

  1. Close on a property, the better your deal.
  2. Complete the rehab, the more you save on carry costs.
  3. Sell in the right market window, the higher your profits.

But speed is only possible when you’re money ready.

Don’t Make This Mistake

Being money ready sets successful investors apart from those who struggle. If you want to avoid this common mistake, take the time to plan your funding properly. It’s the key to:

  • Keeping stress low
  • Maximizing profits
  • Growing your real estate business

Make sure you have the resources you need to handle surprises. That preparation will keep you on track, no matter what challenges arise.

Contact us today to learn more about the biggest mistake real estate investors make!

Watch our most recent video to find out more.

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Making your real estate business plan Easy, Lucrative, Fun, and FAST is a critical component to your success as an investor!

A while ago, Joe Polish from I Love Marketing began using the acronym “E.L.F.” to describe an easy, lucrative, and fun business.

However, in the real estate world, time is everything. While we totally support easy, lucrative, and fun real estate investing, we also recognize that we need to move FAST.

How Do You Set Yourself Up to Win?

You need to learn to play the leverage game. Leverage (using other people’s money in the form of loans and gifts) is what makes real estate investing lucrative and accessible. Having the right leverage when you need it can really make or break your business.

And the truth is this:

Leverage is significantly affected by your credit score.

One of the first steps in your real estate business plan ought to be checking out your credit score.

1. Switch to business credit cards.

We’ve talked previously about the importance of not using personal credit cards for business-level investing. 

Most personal credit cards simply are not designed for the level of usage needed in the real estate investing business. Because of the quantity of purchasing necessary for most fix-and-flips, you may want to look into business cards that have higher usage limits.

2. Consider a usage loan.

Additionally, if you are in a situation where your credit score is negatively affected by high usage, don’t worry. You can look into a usage loan.

We offer them here at The Cash Flow Company, or you can check out our partner company Hard Money Mike

3. Understand the need for speed.

A good credit score can dramatically speed up the investment process.

Leverage makes real estate investing an even playing field for everyone out there, but credit scores can limit your leverage if you’re not careful. 

A good credit score opens doors and makes everything cheaper, easier, faster. 

To E.L.F.F. the real estate business, you need to set yourself up to win.

 

Read the full article here.

Watch the full video here:

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It’s time to stop using your personal credit cards which can ruin your credit score for real estate investors.

Personal credit cards are not only costing you opportunities, but also time, frustration, and cost. And here’s the deal: it’s easy to fix personal credit score issues by switching to a business credit card. 

Why Are Personal Credit Cards Dangerous for Real Estate Investors?

It all comes back to credit score.

The vast majority of people who call us for advice in the real estate investing journey have issues with credit. 

Credit usage is confusing for a lot of people. If this is something you’ve also had questions about, we recommend checking out our previous article about basic credit scores.

In essence, credit scores are based on a ratio that compares usage to available balance. If you’re using personal credit cards for real estate investing (a job that requires a lot of large transactions), it drives your usage way up.

When your usage skyrockets, your credit score will go down even if you’re still paying off the card on time. Basically, personal credit cards are not designed for business-level usage.

With a poor credit score, you’re going to have a much harder time leveraging the best deals, terms, loan to values, and flexibility. 

Real estate investing is all about using the investments of others (including the credit card company’s) to get your work done so you can pay them back and turn a profit. If your credit score is low, you’re going to struggle. You won’t be offered the best terms which drives up the overall cost of your projects.

Very little matters as much as credit score for real estate investors.

Switching to Business Cards Helps Your Credit Score!

At The Cash Flow Company, we are more than happy to help you make the transition to business credit cards.

We can…

  • Get you a private usage loan to raise your personal credit score so you’re eligible for more business card options.
  • Help you figure out which business credit card is right for you.
  • Help you set up your investment work as a business to protect your personal credit score.
  • You can also look into our partner company Hard Money Mike that offers hard money loans that you could use to raise your score as you look for business cards.

We want to make sure you’re prepared for opportunities even before they come your way. Real estate investing is a time-sensitive field, and the fewer obstacles you have to work through, the more successful you’ll be.

Read the full article here.

Watch the full video here:

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