Tag Archive for: credit score

How to Make Your Real Estate Business E.L.F.F. 

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Making your real estate business 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.

How Does Credit Score Affect Leverage?

Having a high credit score often comes with many perks. You might get offered better rates or terms, asked fewer questions, and experience faster approvals with less paperwork.

Unfortunately, while your credit score might make the loan process easier, a bad credit score can make your life a lot more difficult.

Let’s Check Out a Scenario…

If we look at a hypothetical purchase price of $375,000. In order to make the property cashflow, all our hypothetical investors must maintain a monthly mortgage payment of $2,000.

Even though each investor is looking at the same property and mortgage payment, their credit score affects their other payments.

Our Investors:

  • Jessica: She’s a dedicated investor who takes care of her credit, monitoring her score and keeping investment payments on business cards.
  • John: He uses personal credit cards for all his investments which has resulted in a score just above the minimum eligibility requirement for most traditional loans.
  • Sammy: He doesn’t monitor his credit and is convinced the banks just hate him. He never bothers to check his credit score.

The Numbers:

Each of our imaginary investors end up in a different financial situation purely based on their credit score. 

Even though their monthly payments are the same, Jessica ends up getting much more money at a lower rate. Meanwhile John and Sammy are stuck with smaller loans, less leverage, and a slow-moving process.

The Need for Speed

In our example above, Jessica has the advantage over these two investors because she can move through projects faster. She isn’t stuck waiting for approvals or trying to come up with so much additional money outside of her primary loan. 

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.

How to Set Yourself Up For Success

We’ve been in the business for a long time and there are a few important changes you can make to easily improve your investing.

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.

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. 

We’re Here to Help!

We invite you to take advantage of our 20+ years of experience and check out the programs and free tools we’ve specifically designed to help new investors like you. 

If you have questions or would like to discuss loan options, please reach out to us at Info@TheCashFlowCompany.com or fill out a contact card.

With the right knowledge and leverage, all of us can have an E.L.F.F. real estate business!

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How to Find a Business Credit Card

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Personal credit cards tanking real estate investors’ credit scores is the #1 thing slowing investors down. The solution? A business credit card.

Especially in the beginning, it’s tempting to use personal credit cards to kickstart your investing adventures. However, the high spending demands of real estate investing can drive up usage and tank your personal credit score. In order to protect your personal score, business credit cards are typically the best option.

Switching to business cards may seem daunting at first, but if you know how to prepare and what to look for, it should be smooth sailing.

Requirements for Business Credit Cards

Business credit cards are one of the best ways to make real estate investing easier and more profitable. But what do you need before you start looking for a business credit card?

1. A Business

Typically, you need to have an operating business for at least a year (though there are exceptions)  before applying for a business card. 

This isn’t quite as tricky as it may sound. You need a business account, website, billing information, etc. Essentially, you need proof that you are, in fact, operating an investment business. 

2. A Good Personal Credit Score

Even though you’re applying for a card that won’t report on your personal credit score, approval for the business card is based on your personal credit score.

If you need to raise your personal credit score before applying for a business card, we can help you with that! Usage loans essentially transfer some of that credit card spending into a separate loan that won’t tank your credit score.

Both we and our sister company Hard Money Mike offer usage loans.

3. 1–2 Personal Credit Cards

Obviously, you will need to use your personal credit cards for your investment needs in the beginning. However, if you’ve been using those well, then banks are more likely to approve a business credit card.

All in all, if you have a business, a good credit score, and a couple of credit cards already, it’s fairly easy to start the process of switching to business cards. 

Tools to Help You Find the Right Business Card

We want to make it easy for you to succeed as a real estate investor—no strings attached. The more you know and the more resources you have, the better equipped you are to find the right deals for you.

We’ve already done some of the work for you:

1. Business Credit Card Marketplace

Here at the Cashflow Company, we’ve partnered with Nav to help you find the right business card for you. By inputting a few pieces of information, we’ll let you know what cards match your needs (and won’t report on your personal credit score).

2. Credit Score Checklist

You can use our free credit checklist download to check the health of your credit score. What can you do to improve that score? Does it need some CPR? What are your options?

3. Other Real Estate Investing Tools

Explore our other tools to optimize your investment strategy. We have various calculators, questionnaires, optimizers, and analyzers to walk you through the various steps of the game.

Contact Us!

Credit scores are a very important piece of leverage. We want you to feel equipped and confident that you’re protecting that credit score in a smart way with business credit cards.

If you want to discuss your credit score, a usage loan, or business credit cards, contact us at Info@TheCashFlowCompany.com. We’re always happy to help!

 

Read the full article here.

Watch the full video here:

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Business Credit vs. Personal Credit: What’s Better?

Categories:

The struggle of business credit vs. personal credit cards is the #1 thing slowing real estate investors down.

Especially in the beginning, it’s tempting to use personal credit cards to kickstart your investing adventures.

However, the use of personal credit cards on investment projects can ultimately cause significant harm to your dreams of building wealth.

The Risk of Personal Credit Cards

Using personal credit cards for the type of large-scale spending necessary in real estate investing drives up usage. 

Your credit score is calculated based on two factors: funds available and usage. High usage tanks your credit score fast. A low score can significantly damage terms of loans and your overall ability to grow your investment business. 

A Better Alternative

In order to protect your credit score, consider switching your investment spending to a business credit card.

This separates your investment usage from that personal credit score. 

Additionally, since these cards don’t penalize high usage, you can run up the balance as long as you pay it off on time. In fact, consistently high usage and good payment history can even result in the bank raising your spending limits on that business card.

Getting a business credit card is easy, and with this simple change, your personal credit score is protected. If you have a good score, lenders can confidently offer better rates and terms which will save you a lot of money in the long run.

What to Look for in a Business Credit Card 

Here’s the good news: shopping for a business credit card isn’t all that different from looking for a personal one!

  • Look for 0% interest and benefits the same as you would on a personal card.
  • Make sure you know whether or not that card will report. To protect your credit score, you’ll want to find one that doesn’t.
  • Remember: You still need to pay your bills on time. Many business cards will start reporting if you have late or missed payments.

 

Read the full article here.

Watch the full video here:

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Personal vs. Business Credit Cards: What’s Better for Investing?

Categories:

The struggle of personal vs. business credit cards is the #1 thing slowing real estate investors down.

Especially in the beginning, it’s tempting to use personal credit cards to kickstart your investing adventures.

However, the use of personal credit cards on investment projects can ultimately cause significant harm to your dreams of building wealth.

The Risk of Personal Credit Cards

Using personal credit cards for the type of large-scale spending necessary in real estate investing drives up usage. 

Your credit score is calculated based on two factors: funds available and usage. High usage tanks your credit score fast. A low score can significantly damage terms of loans and your overall ability to grow your investment business. 

A Better Alternative: Business Credit Cards

In order to protect your credit score, consider switching your investment spending to a business credit card.

This separates your investment usage from that personal credit score. 

Additionally, since these cards don’t penalize high usage, you can run up the balance as long as you pay it off on time. In fact, consistently high usage and good payment history can even result in the bank raising your spending limits on that business card.

Getting a business credit card is easy, and with this simple change, your personal credit score is protected. If you have a good score, lenders can confidently offer better rates and terms which will save you a lot of money in the long run.

Requirements for Business Credit Cards

Business credit cards are one of the best ways to make real estate investing easier and more profitable. But what do you need before you start looking for a business credit card?

1. A Business

Typically, you need to have an operating business for at least a year (though there are exceptions)  before applying for a business card. 

This isn’t quite as tricky as it may sound. You need a business account, website, billing information, etc. Essentially, you need proof that you are, in fact, operating an investment business. 

2. A Good Personal Credit Score

Even though you’re applying for a card that won’t report on your personal credit score, approval for the business card is based on your personal credit score.

If you need to raise your personal credit score before applying for a business card, we can help you with that! Usage loans essentially transfer some of that credit card spending into a separate loan that won’t tank your credit score.

Both we and our sister company Hard Money Mike offer usage loans.

3. 1–2 Personal Credit Cards

Obviously, you will need to use your personal credit cards for your investment needs in the beginning. However, if you’ve been using those well, then banks are more likely to approve a business credit card.

All in all, if you have a business, a good credit score, and a couple of credit cards already, it’s fairly easy to start the process of switching to business cards. 

What to Look for in a Business Credit Card 

Here’s the good news: shopping for a business credit card isn’t all that different from looking for a personal one!

  • Look for 0% interest and benefits the same as you would on a personal card.
  • Make sure you know whether or not that card will report. To protect your credit score, you’ll want to find one that doesn’t.
  • Remember: You still need to pay your bills on time. Many business cards will start reporting if you have late or missed payments.

Tools to Help You Find the Right Card

We want to make it easy for you to succeed as a real estate investor—no strings attached. The more you know and the more resources you have, the better equipped you are to find the right deals for you.

We’ve already done some of the work for you:

1. Business Credit Card Marketplace

Here at the Cashflow Company, we’ve partnered with Nav to help you find the right business card for you. By inputting a few pieces of information, we’ll let you know what cards match your needs (and won’t report on your personal credit score).

2. Credit Score Checklist

You can use our free credit checklist download to check the health of your credit score. What can you do to improve that score? Does it need some CPR? What are your options?

3. Other Real Estate Investing Tools

Explore our other tools to optimize your investment strategy. We have various calculators, questionnaires, optimizers, and analyzers to walk you through the various steps of the game.

Contact Us!

Credit scores are a very important piece of leverage. We want you to feel equipped and confident that you’re protecting that credit score in a smart way.

If you want to discuss your credit score, a usage loan, or business credit cards, contact us at Info@TheCashFlowCompany.com. We’re always happy to help!

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How Do Usage Loans Boost Credit?

Categories:

If you’ve ever wondered how to boost your credit score overnight with usage loans, you’ve come to the right place.

Having a strong credit score is like having a really good baseball team. It doesn’t guarantee an instant win, but it sure helps! The better your team (and credit score), the more home runs you can look forward to in your investment season. 

When you win the credit score game, you win countless opportunities. These include good rates, good loans, and more opportunities that can, in the end, add up to hundreds of thousands of dollars.

What is a Good Credit Score and Why is it Important?

Typically, banks consider a credit score “good” when it’s 700 or higher. 

The higher your score, the better your chances of taking home a big trophy. 

It’s important to note that not every lender is equally concerned with credit score. Some private money lenders care more about the specific deal or their relationship with the investor. This can be really helpful to keep in mind if you need to apply for a usage loan or some other method of raising your credit score.

How Can a 60-90 Day Note or Usage Loans Help?

If those first two strategies don’t really work for you, then you can always take a third approach: find a loan.

You can apply for a short-term 60 or 90 day note. These are available from most banks, or you could look to family and friends for the small loan. You can also go through private lenders like us for a usage loan. 

A usage loan allows you to move the credit card balance off of that card (and away from your credit score). It can fix usage issues instantly as might be obvious by the loan’s name.

Also, by moving that balance to a different place, you’ll often find better deals which can allow you to pay off the usage loan more easily than you could have paid off the credit card.

We Can Help!

If you take one, two, or all three approaches to boosting your credit score, then you should see better deals flying your way almost immediately.

If you want to discuss options such as usage loans or even business credit cards, reach out to us at Info@TheCashFlowCompany.com. 

Our team is always ready to help.

We’re eager to set you on a path that helps you make the kind of money you need to live the life you want.

 

Read the full article here.

Watch the full video here:

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3 Strategies to Raise Your Credit Score

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3 Ways to Quickly Increase Your Credit Score

If you’ve ever wondered how to raise your credit score overnight, you’ve come to the right place.

Let’s take a look at three easy strategies to help you prepare for this financial gain: 

1. Increase Available Credit to Lower Usage

Banks look for an ideal credit usage of around 30%. This means that you’re only spending about 30% of the available balance.

For example, if you have a maximum credit line of $1,000 and you’re frequently spending $800, that is 80% usage. When lenders see such high usage, it tells them you’re really pushing the limit of that credit. Often, high usage signals a struggle to meet financial obligations.

You can fix this in two ways:

The first is to apply for a higher spending limit as noted above. The second is to lower your usage. If you’re working in real estate investing, chances are lowering usage is difficult, so we recommend asking your credit card company for a higher limit. 

2. Pay Extra to Raise Your Score

Another significant factor in calculating your credit score is the monthly reported balances to the credit bureaus. 

A good way to quickly raise your credit score is to pay extra whenever possible. If you have a little extra cash at the end of the month before your statement is due, this is an easy way to keep a negative report from being filed.

The score will go up, and the credit bureau (and you!) will be happy.

3. Get a 60-90 Day Note or Usage Loan

If those first two strategies don’t really work for you, then you can always take a third approach: find a loan.

You can apply for a short-term 60 or 90 day note. These are available from most banks, or you could look to family and friends for the small loan. You can also go through private lenders like us for a usage loan. 

A usage loan allows you to move the credit card balance off of that card (and away from your credit score). It can fix usage issues instantly as might be obvious by the loan’s name.

Also, by moving that balance to a different place, you’ll often find better deals which can allow you to pay off the usage loan more easily than you could have paid off the credit card.

 

Read the full article here.

Watch the full video here:

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How to Boost Your Credit Score Overnight

Categories:

If you’ve ever wondered how to boost your credit score overnight, you’ve come to the right place.

Having a strong credit score is like having a really good baseball team. It doesn’t guarantee an instant win, but it sure helps! The better your team (and credit score), the more home runs you can look forward to in your investment season. 

When you win the credit score game, you win countless opportunities. These include good rates, good loans, and more opportunities that can, in the end, add up to hundreds of thousands of dollars.

What is a Good Credit Score and Why is it Important?

Typically, banks consider a credit score “good” when it’s 700 or higher. 

The higher your score, the better your chances of taking home a big trophy. 

It’s important to note that not every lender is equally concerned with credit score. Some private money lenders care more about the specific deal or their relationship with the investor. This can be really helpful to keep in mind if you need to apply for a usage loan or some other method of raising your credit score.

3 Strategies to Boost Your Credit Score

Let’s take a look at three easy strategies to help you prepare for this financial gain: 

1. Increase Available Credit to Lower Usage

Banks look for an ideal credit usage of around 30%. This means that you’re only spending about 30% of the available balance.

For example, if you have a maximum credit line of $1,000 and you’re frequently spending $800, that is 80% usage. When lenders see such high usage, it tells them you’re really pushing the limit of that credit. Often, high usage signals a struggle to meet financial obligations.

You can fix this in two ways:

The first is to apply for a higher spending limit as noted above. The second is to lower your usage. If you’re working in real estate investing, chances are lowering usage is difficult, so we recommend asking your credit card company for a higher limit. 

2. Pay Extra

Another significant factor in calculating your credit score is the monthly reported balances to the credit bureaus. 

A good way to quickly boost your credit score is to pay extra whenever possible. If you have a little extra cash at the end of the month before your statement is due, this is an easy way to keep a negative report from being filed.

The score will go up, and the credit bureau (and you!) will be happy.

3. Get a 60-90 Day Note or Usage Loan

If those first two strategies don’t really work for you, then you can always take a third approach: find a loan.

You can apply for a short-term 60 or 90 day note. These are available from most banks, or you could look to family and friends for the small loan. You can also go through private lenders like us for a usage loan. 

A usage loan allows you to move the credit card balance off of that card (and away from your credit score). It can fix usage issues instantly as might be obvious by the loan’s name.

Also, by moving that balance to a different place, you’ll often find better deals which can allow you to pay off the usage loan more easily than you could have paid off the credit card.

We Can Help!

If you take one, two, or all three approaches to boosting your credit score, then you should see better deals flying your way almost immediately.

If you want to discuss options such as a usage loan or even business credit cards, reach out to us at Info@TheCashFlowCompany.com. 

Our team is always ready to help.

We’re eager to set you on a path that helps you make the kind of money you need to live the life you want.

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How Can Credit Score Impact DSCR Loans?

Categories:

How can your credit score impact DSCR loans in the real estate investing world?

Credit score impacts investors potentially more than anything else. Lenders will adjust the rates and terms of loans based purely on the three digits of credit score on a person’s financial records. 

Leverage is the key to successful real estate investing, and understanding the impact of credit score is a critical facet of that leverage. 

This article uses real-life examples to illustrate the difference a good credit score makes in the investment world.

How Can Credit Score Impact DSCR Loans?

Let’s look at how DSCR loans can be impacted by a low credit score using two example clients:

  • One (Person 1) has a low credit score of 660
  • The other (Person 2) has a high score of 740

We see a lot of clients looking at cash out refinancing, so we’ll look at that type of project.

What’s the Difference?

If Person 1 has a 660 credit score, not only will they likely struggle to find lenders, but 65% is about the best they could look for. This directly translates into less money out of that property.

In contrast, Person 2 with a 740 score should be able to fairly easily get 75%. The more money out, the better your leverage.

As you can see in the chart above, not only does the person with a lower credit score get less cash out, but their rate is also higher which raises their monthly payments. 

Credit Score Matters

Although at first glance, it’s tempting to just look at the monthly payments and think, “It’s not that big of a difference,” don’t fall into that trap!

The person with the higher score not only has a lower monthly payment, but because they also got a higher Cash Out % which gave them an additional $35,000 out. 

Having that good credit score makes it possible to keep cash flowing. If you’re serious about investing, your credit score matters.

Read the full article here.

Watch the full video here:

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How Does Credit Score Impact Fix and Flip Loans?

Categories:

How can your credit score impact fix and flip loans in the real estate investing world?

Credit score impacts investors potentially more than anything else. Lenders will adjust the rates and terms of loans based purely on the three digits of credit score on a person’s financial records. 

Leverage is the key to successful real estate investing, and understanding the impact of credit score is a critical facet of that leverage. 

This article uses real-life examples to illustrate the difference a good credit score makes in the investment world.

How Does Credit Score Impact Fix and Flip Loans?

Let’s compare two clients: 

  • One (Person 1) has a low credit score of 660
  • The other (Person 2) has a high score of 740

These numbers are based on real clients who have approached us for loans.

What Changes?

If you look at the way the numbers worked out in the chart above, you’ll notice that the actual interest rate is the same for both clients.

Obviously credit score can impact a rate, however it’s also common for the impact to be even simpler. In this situation, the lender simply gives less money to clients with lower scores.

In this scenario, the lender only offered 85% of the purchase price to the person with the lower credit score. The person with the higher score ended up having 85% of the purchase price covered as well as 100% of the rehab costs. 

The Cost of a Low Score

If we estimate the closing costs for Person 1’s project at around $7,500 and combine that with the leftover 15% of the purchase price and 85K rehab, the cost of a low credit score starts to take shape. In our example, Person 1 will need to find over $171,000 of additional funding simply because they had a lower score.

Even when the rates aren’t affected, a low credit score is going to cost more in the long run. It’s hard to do multiple projects when you have to bring in that much money on your own. 

Read the full article here.

Watch the full video here:

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Credit Score Impact: What You Need to Know About Loan Rates

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How can your credit score impact different types of loans in the real estate investing world?

Credit score impacts investors potentially more than anything else. Lenders will adjust the rates and terms of loans based purely on the three digits of credit score on a person’s financial records. 

Leverage is the key to successful real estate investing, and understanding the impact of credit score is a critical facet of that leverage. 

This article uses real-life examples to illustrate the difference a good credit score makes in the investment world.

How Does Credit Score Impact Fix and Flip Loans?

Let’s compare two clients: 

  • One (Person 1) has a low credit score of 660
  • The other (Person 2) has a high score of 740

These numbers are based on real clients who have approached us for loans.

What Changes?

If you look at the way the numbers worked out in the chart above, you’ll notice that the actual interest rate is the same for both clients.

Obviously credit score can impact a rate, however it’s also common for the impact to be even simpler. In this situation, the lender simply gives less money to clients with lower scores.

In this scenario, the lender only offered 85% of the purchase price to the person with the lower credit score. The person with the higher score ended up having 85% of the purchase price covered as well as 100% of the rehab costs. 

The Cost of a Low Score

If we estimate the closing costs for Person 1’s project at around $7,500 and combine that with the leftover 15% of the purchase price and 85K rehab, the cost of a low credit score starts to take shape. In our example, Person 1 will need to find over $171,000 of additional funding simply because they had a lower score.

Even when the rates aren’t affected, a low credit score is going to cost more in the long run. It’s hard to do multiple projects when you have to bring in that much money on your own. 

How Can Credit Score Impact DSCR Loans?

Using a similar example, let’s look at how DSCR loans can be impacted by a low credit score. We’ll use the same clients:

  • One (Person 1) has a low credit score of 660
  • The other (Person 2) has a high score of 740

We see a lot of clients looking at cash out refinancing, so we’ll look at that type of project.

What’s the Difference?

If Person 1 has a 660 credit score, not only will they likely struggle to find lenders, but 65% is about the best they could look for. This directly translates into less money out of that property.

In contrast, Person 2 with a 740 score should be able to fairly easily get 75%. The more money out, the better your leverage.

As you can see in the chart above, not only does the person with a lower credit score get less cash out, but their rate is also higher which raises their monthly payments. 

Credit Score Matters

Although at first glance, it’s tempting to just look at the monthly payments and think, “It’s not that big of a difference,” don’t fall into that trap!

The person with the higher score not only has a lower monthly payment, but because they also got a higher Cash Out % which gave them an additional $35,000 out. 

Having that good credit score makes it possible to keep cash flowing. If you’re serious about investing, your credit score matters.

How to Raise Your Credit Score

If you’re serious about real estate investing, you need to keep your credit score up. A low score is really going to cost you over time by strangling your cash flow. 

But how can you fix a bad credit score?

There are a lot of options that can help you raise your credit, including usage loans, credit card strategies, or various tips. 

If you’re interested in learning more about how credit scores affect investment opportunities or need help raising your score, reach out to us at Info@TheCashFlowCompany.com.

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