Tag Archive for: credit usage

Does your credit score need some CPR? We have a 911 loan that can boost credit scores overnight.

In the current economy, credit scores are one of the primary determiners in whether or not you get a loan. Previously, there were more loans available for people with lower scores. More flexibility meant a larger safety net.

However, currently people with low scores are struggling to find loans.

If you do manage to get a loan, your credit score will likely affect your rates, terms, etc. 

Essentially, a good credit score can make you money. But a bad credit score can burn a hole in your pocket.

What is a Credit Score 911 Loan?

A Credit Score 911 Loan essentially comes in and pays off your credit card. It moves that balance to a non-reporting loan.

This lets your credit score skyrocket the moment the next report is processed.

This loan also moves quickly. We can work through the process efficiently on our end, meaning you could see results in as little as two weeks.

Should You Get a 911 Loan?

If your credit score needs an overnight boost, the first thing to do is figure out why your score is low

Typically, it’s due to one of two reasons:

  1. You haven’t paid on time
  2. You have a usage issue

If you haven’t paid your bills on time, then unfortunately, there isn’t a quick fix. You’ll just need to heal your score slowly over time.

However, if you have a usage issue, then you’re in luck!

Credit Usage Explained

Credit usage measures the percentage of your total allowed balance you use each month. 

For example, if your usage limit is $10,000, and you’re frequently using $7,000 of that, you have 70% usage.

Ideally, FICO wants to see you using about 20%-30% of your available credit. Any higher than that, and you become riskier for banks.

Especially when you’re beginning as a real estate investor, it can be so easy to rack up the usage: getting supplies at Home Depot, paying contractors, etc. with your personal credit cards.

When that usage percentage goes up, your score goes down.

When your score goes down, your costs go up.

That’s where a Credit Score 911 Usage Loan comes in to pay down that debt and boost credit scores overnight.

What’s Next?

If you’re wondering if a Credit Score 911 Loan is right for you, what steps should you take?

  • Look at sites like Credit Karma or TransUnion. See where your score is at, and run simulators to see what would happen if you paid off certain credit cards.
  • Consider the qualifications for a 911 loan. Are you paying on time? Do you need to fix the problem quickly?

If you’re ready to take the next steps or have questions, reach out to us at Info@TheCashFlowCompany.com

We’re always happy to talk you through a 911 loan, how it can pay down debt, and how you can set up your business to avoid this problem in the future.

by

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 fastA 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!

by

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:

by

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.

by

It’s time to stop using your personal credit cards and switch to business credit cards for real estate investing.

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?

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.

Credit scores matter.

Mythbusting Business Credit Cards 

A lot of people are afraid to make the switch to business credit cards because they’re unfamiliar. These are the three most common concerns we hear from our clients who need to make the switch to business credit cards for real estate.

1. “It’s a huge switch from my current system and is going to take forever.” 

FALSE

People hear terms like “corporate credit” or “business credit card” and think it’s going to be a massive change that they’re going to need to get done at Bradstreet.

That’s not the case at all!

Essentially, you’re going to look for the same credit cards you have now—ones with 0% APR, cash back, travel miles, or whatever you like. Look for a credit card with the perks you enjoy and open it in your business’ name. 

Sure, it’s technically a “business credit card,” but you shop around the exact same way as you would for a personal card. 

2. “Business credit cards still affect my personal credit scores.” 

FALSE*

Here’s the great news: so long as you’re paying it off on time, your business credit card will never report on your personal credit score.

*Unfortunately, if you have a few late payments, it will start reporting. Also, there are a few business credit cards that do report on your personal score. Always read the fine print so that you can avoid these cards and companies.

Therefore, if you pick a good card and are good about paying off your balances, this shouldn’t be a huge concern. So long as you pay on time, it will never report your balances or usage. This protects your personal credit score for real estate investors which is the whole goal of getting a business credit card.

If you need help figuring out which cards are best for your business, contact us!

3. “I need to have an actual business for a business credit card.”

TRUE

Yes, it’s true, but don’t panic if you’re not set up for this yet! 

You do need a business, an LLC, and a business checking account. 

If you already have a business set up, obviously making the change will be super easy. However, if you need any help getting these items in order, let us know, and we’d be happy to help.

A poor credit score is a huge inhibitor for investors. It’s worth doing a little extra work on the front end to set up something that’s going to open doors for you and fix one of your biggest weaknesses.

Switching to Business Cards is Easy With Our Help!

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.

Please reach out to us at Info@TheCashFlowCompany.com.

We can’t wait to help you on your investment journey!

by

It can feel overwhelming to build credit, but these three tips and tricks can help you quickly get back on track.

1. Don’t close credit cards you’re not using. 

You can cut them up so you can’t use them anymore, but let them keep reporting. Credit bureaus see the extra available credit which helps build your score.

Earlier this week we had a client call whose usage was in the high 30s. Even though that isn’t much higher than the ideal, it still impacted his credit score and bumped him down a tier, making him pay higher rates and potentially decreasing his loan to value with major lenders.

He had other credit cards available, but he closed those accounts. By closing them, he decreased the available credit overall which made his usage percentage go up and his credit score go down.

If he had only left those credit cards open, he would have kept a much higher available credit which would have brought his usage numbers down.

2. Increase your limits to build credit.

You can also call and ask your credit card companies to increase your available credit. Since credit scores are based on the ratio of usage to available balance, raising the ceiling builds your credit.

It’s important to remember that increased limits don’t show on your credit reports until your next statements cycle. If you’re desperate to raise your score, look at when your next statement is issued to avoid panic. 

3. Protect your credit through private investments.

By finding individuals in your community who are willing to invest in you, you can build your credit through avoiding credit cards. Paying cash helps you avoid raising your usage number. 

It doesn’t take a millionaire to make this happen. Even ordinary people who have $20,000-$50,000 can make a significant difference.

You’re helping them, and they’re helping you, because they’re not going to find an 8-9% rate anywhere else. Just make sure you take care of their investment by properly securing it.

 

Read the full article here.

Watch the full video here:

by

Investors get trapped in a credit usage cycle – here’s how it happens.

We get calls about this bad credit trap almost daily. Let’s go over the story of one client.

They were going for a DSCR loan. They owned the property free and clear – except they had put all the repairs on their personal credit cards, which they still owed. It’s not uncommon for investors to use credit cards to cover the rehab costs of a flip. In this case, they ran around $40,000 on the cards.

So they went to get their DSCR refinance of up to $210,000 on this property that was worth over $300,000. The LTV looked good, everything was checking out, and they actually got pre-qualified before they did all the work and got the tenants in the property.

Then the problem: their points rose from 1 to 3%. Their interest rate went from mid-7s to over 9.6%. Their LTV jumped from 70% down to 65%.

Why? Those credit card balances were on their personal cards, so it impacted their personal credit. The bad credit score impacted their rate and fees. Now, for this refinance they had already qualified for, they now owed over $6,000 in points alone.

What Is the Credit Usage Cycle?

On flips and BRRRRs, we see this credit cycle happen over and over again.

Investors put the fix-up costs (business expenses) on personal cards. This drives up the balances, and so increases credit usage, and so lowers their personal credit score.

In the earlier example, our client fully intended to use the money from the refinance to pay off the credit card balances. But they can’t get the refinance until the cards are paid off. This is the cycle.

In most instances, you expect to pay the personal cards off with the refinance. But when you go to refinance, you get the unexpected surprise that your credit score doesn’t qualify. In our client’s example, he had actually pre-qualified, but the rate and fees had changed drastically due to the bad credit score.

If this client had accepted the terms of that refinance, he’s going to get less cash out to pay off the cards and put into his next project. The next property will have hefty out-of-pocket closing costs. With all these extra costs, his real estate investing career will slow to a standstill, and he’ll be more dependent on the personal credit cards than ever.

Read the full article here.

Watch the video here:

https://youtu.be/ONa_nEQ0840

by

Have high credit usage? Get a small loan for your bad credit like this.

Credit is a powerful tool for real estate investors.

A credit score, even more so.

Sometimes the very projects that are making you money stifle your ability to get a loan to start your next project. Let’s briefly go over why this happens – and how a small loan for bad credit could help you.

About Credit Usage Loans

Not every real estate lender offers loans under $75,000, but we believe this size of loan is important. A popular way our clients use these small loans is as an “Improve Your Credit Score” loan – a usage loan.

Credit usage is a common sore spot for many real estate investors’ credit scores.

Maybe you use your personal credit card to fix up your properties. You pay all the charges off once you sell or refinance your flip.

But in the meantime, you’re using a high percentage of your personal credit limit. This usage negatively impacts your score. With a bad score, you lower your chances of getting a great loan for your next project.

Here’s where our loans come in:

  • You take out a private loan with us.
  • Use those funds to pay off your personal credit cards.
  • Your usage goes down dramatically, improving your score so you can get approved for other loans.

Once you get the balances off your personal credit cards, we recommend moving your fix and flip expenses to a business card.

Get a Small Loan for Your Bad Credit

Have questions about how these small loans work? Need a smaller loan? Reach out at Info@TheCashFlowCompany.com and we’d love to see how we could help.

Read the full article here.

Watch the video here:

by

How to Fix Credit Usage Quickly

Categories:

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.

by