Tag Archive for: DTI

How Credit Affects Your Entire investment

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How Credit Affects Your Entire investment

Today we are going to explore how credit affects your entire investment. Here at The Cash Flow Company we have a magical solution that can easily solve this problem, which is the 911 usage loan! Our goal is to help people raise their score immediately so that they can get the loan they need. On average we see 7 out of 10 people struggle with a usage problem. As a result of the immense strain on their credit, investors are struggling with getting the funding they need. Don’t let your credit affect your entire investment. Let’s take a closer look!

Credit score struggles.

The percentage that is used on your credit card is referred to as the credit utilization rate. If you are above 30% usage on your credit cards, your  score  will begin to decrease. Investors who come in with a 640 or a 660 credit score often need to increase their score to 700. In doing so, they will be able to get either the LTV or rate they need to create cash flow. Nowadays rates are still in the 7’s or 8’s. That is why it is so important to get the best rate you can in order to maximize both your LTV and cash flow. 

Where do you get started?

The first thing that you need to do is run a simulation. We ask investors to do a simulation on MyFico, Credit Karma, or Experian to see how paying off a credit card will impact their credit score. We have seen people max out their credit cards at $3K, while others are maxed out at $175K. These maxed out credit cards are not only impacting their credit scores, but their DTI as well. To clarify, DTI stands for the debt to income ratio. 

For example: A client in Texas just went through a simulation and his credit score went up 100 points. He went from 653 to over 753 by simply paying off the credit cards that he had maxed out. 

High credit score means higher cash flow.

In the following example we are going to look at how credit scores can drastically impact your ability to qualify for a DSCR loan. Not only will a lower credit score increase your interest rate, but it will decrease the cash flow for your property as well. Remember, hurdle number one is making sure that both you and your property qualify for the loan. By taking 2 to 4 weeks to get the 911 usage loan, you will be able to not only buy the property, but you can then refinance it later on. This method also provides the opportunity for you to move over any remaining balances over to a business credit card.

Loan Type Property LTV of 80% Net Rent
DSCR $312K $250K $1,800
Credit Score Interest Rate Monthly Payment Can it Qualify?
680 8.8% $1,976 No
760 7.45% $1,740 Yes

Learn this magic trick today! 

Business credit cards are an excellent way to separate business expenses from your personal accounts. These credit cards are not only easy to get, but they also work the same as a personal credit card. By moving expenses over to business credit cards, it wipes the charges off of your personal credit completely. As a result, your credit score, cash flow, and ability to qualify will all increase. 

We are here to help!

Don’t let credit affect your entire investment! Here at The Cash Flow Company we are here to help you get on the right path. Contact us today to find out more about usage loans and how they can set you up for long term financing. To clarify, the usage loan is a private loan that does not show up on your credit for 60 to 90 days and won’t affect your DTI. Now is the time to set yourself up for success! 

Watch our most recent video to find out more about How Credit Affects Your Entire investment.

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Better Credit, Better DSCR Loan

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Better Credit, Better DSCR Loan

Today we are going to explore how better credit results in a better DSCR loan. Here at The Cash Flow Company we have a magical solution that can easily solve this problem, which is the 911 usage loan! Our goal is to help people raise their score immediately so that they can get the loan they need. On average we see 7 out of 10 people struggle with a usage problem. This prevents them from being successful in real estate investing. Don’t fall into this trap! Improve your credit today and get the DSCR loan you need.

Usage problem uncovered.

Usage loans are very common in this business because many investors have a usage problem. The usage problem is created when investors excessively use their personal credit cards or personal loans to pay for their business expenses. This will affect you everywhere you go, whether it’s a flip project or you’re applying for a DSCR loan. Here at The Cash Flow Company we deal a lot with credit score struggles, fix and flip properties, and rental properties. No matter what the project is, having good credit is the key to getting the funding you need.

Credit score struggles.

The percentage that is used on your credit card is referred to as the credit utilization rate. If you are above 30% usage on your credit cards, your  score  will begin to decrease. Investors who come in with a 640 or a 660 credit score often need to increase their score to 700. In doing so, they will be able to get either the LTV or rate they need to create cash flow. Nowadays rates are still in the 7’s or 8’s. That is why it is so important to get the best rate you can in order to maximize both your LTV and cash flow. 

How can a private loan help your credit?

One quick way to increase your credit score is to use a 911 loan. The 911 loan pays down credit card debt by using private money. These funds are secured with a property to guarantee the repayment of the loan. As a result of removing the credit cards from the personal credit report, the credit score will reflect the changes after the statement cycle.

Where do you get started?

The first thing that you need to do is run a simulation. We ask investors to do a simulation on MyFico, Credit Karma, or Experian to see how paying off a credit card will impact their credit score. We have seen people max out their credit cards at $3K, while others are maxed out at $175K. These maxed out credit cards not only impact credit scores, but they also impact DTI as well. To clarify, DTI stands for the debt to income ratio. 

For example: A client in Texas just went through a simulation and his credit score went up 100 points. He went from 653 to over 753 by simply paying off the credit cards that he had maxed out. 

We are here to help!

Here at The Cash Flow Company we are here to help you get on the right path. Remember better credit will result in a better DSCR loan! Get your credit card debt off of your personal credit report today! Contact us today to find out more about usage loans and how they can set you up for long term financing. To clarify, the usage loan is a private loan that does not show up on your credit for 60 to 90 days and won’t affect your DTI. Now is the time to set yourself up for success! 

Watch our most recent video to find out how Better Credit, can get you a Better DSCR Loan. 

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Help! I Can’t Get a DSCR Loan Because of My Credit

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Help! I Can’t Get a DSCR Loan Because of My Credit

Many investors are struggling to get a DSCR loan because of their low credit score! However, there is a magical solution that can easily solve this problem. It is called a 911 usage loan! Here at The Cash Flow Company we help people raise their score so that they can get the loan they need. On average we see 7 out of 10 people struggle with a usage problem. How can they get back on their feet? Let’s take a closer look at how you can magically improve your credit score today!

Usage problem uncovered.

Usage loans are very common in this business because many investors have a usage problem. The usage problem is created when investors excessively use their personal credit cards or personal loans to pay for their business expenses. This will affect you everywhere you go, whether it’s a flip project or you’re applying for a DSCR loan. Here at The Cash Flow Company we deal a lot with credit score struggles, fix and flip properties, and rental properties. No matter what the project is, having good credit is the key to getting the funding you need.

Credit score struggles.

If you are above 30% usage on your credit cards, your  score  will begin to decrease. This percentage is also referred to as the credit utilization rate. Investors who come in with a 640 or a 660 credit score often need to increase their score to 700. In doing so, they will be able to get either the LTV or rate they need to create cash flow. Nowadays rates are still in the 7’s or 8’s. That is why it is so important to get the best rate you can in order to maximize both your LTV and cash flow. 

How can a private loan help your credit?

One quick way to increase your credit score is to use a 911 loan. This loan is used to pay down credit card debt by using private money. These private funds are secured with a property to ensure the repayment of the loan. Once the credit cards are taken off of the credit report and the new statements cycle, credit scores will then reflect the changes. 

Where do you get started?

The first thing that you need to do is run a simulation. We ask investors to do a simulation on MyFico, Credit Karma, or Experian to see how paying off a credit card will impact their credit score. We have seen people max out their credit cards at $3K, while others are maxed out at $175K. These maxed out credit cards are not only impacting their credit scores, but their DTI as well. To clarify, DTI stands for the debt to income ratio. 

For example: A client in Texas just went through a simulation and his credit score went up 100 points. He went from 653 to over 753 by simply paying off the credit cards that he had maxed out. 

High credit score means higher cash flow.

In the following example we are going to look at how credit scores can drastically impact your ability to qualify for a DSCR loan. Not only will a lower credit score increase your interest rate, but it will decrease the cash flow for your property as well. Remember, hurdle number one is making sure that both you and your property qualify for the loan. By taking 2 to 4 weeks to get the 911 usage loan, you will be able to not only buy the property, but you can then refinance it later on. This method also provides the opportunity for you to move over any remaining balances over to a business credit card.

Loan Type Property LTV of 80% Net Rent
DSCR $312K $250K $1,800
Credit Score Interest Rate Monthly Payment Can it Qualify?
680 8.8% $1,976 No
760 7.45% $1,740 Yes

Learn this magic trick today! 

Business credit cards are an excellent way to separate business expenses from your personal accounts. These credit cards are easy to get and work the same as personal credit cards. By moving expenses over to business credit cards, it wipes the charges off of your personal credit completely. As a result, your credit score, cash flow, and ability to qualify will all increase. 

We are here to help!

Here at The Cash Flow Company we are here to help you get on the right path. Do you need to get your credit card debt off of your personal credit report? Contact us today to find out more about usage loans and how they can set you up for long term financing. Just to clarify, the usage loan is a private loan that does not show up on your credit for 60 to 90 days and won’t affect your DTI. Now is the time to set yourself up for success! 

Watch our most recent video Help! I Can’t Get a DSCR Loan Because of My Credit to find out more.

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This Makes a HUGE Impact on Your Credit Score

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Business Owners: This Makes a HUGE Impact on Your Credit Score

Many business owners wonder what will make the biggest impact on their credit score. The answer is using personal credit for business expenses! If you max out your personal credit card with business expenses and fail to make payments on time, then it will show up on your credit report. In order to be successful, it is imperative that you maintain your credit score. Those who do will be able to get approved for business credit cards and loans in the future. How can you prevent any further strain on your credit score? Let’s take a closer look. 

What is the credit utilization rate and how does it affect you?

The credit utilization rate is the sum of your balances divided by the amount that you were approved for. If you are above 20% of your credit utilization rate, it will lower your credit score. For example, if you have a $10K personal credit card and use $3K of it, then it will decrease your credit score. However, if you have a $5K business credit card and use $4800, your credit score will not be impacted. In many instances, your credit score will by using a business credit card as opposed to a personal credit card.

Business credit cards are a key to success.

Once you get into business credit cards, the banks will start offering you business loans as well. I receive offers almost weekly that are offering a $30K business loan or a term loan. Investors are always finding ways to bring money into their business so that they aren’t in a cash crunch. Part of that is using credit cards for down payments and escrow. By just going through one extra step to apply for business credit cards, you can continue to use credit cards without affecting your score.

Buying a property has never been easier!

A business credit card is a tool that will not only help you pay for business expenses, but it can also be used to purchase a property. There are services out there who can help you use your credit card to purchase a property as long as things are set up correctly. For example, if you have a $10K limit on a business credit card and want to buy a property for $5K, they can take it directly off of the credit card. That $5K can be used to pay the title company for the earnest money or down payment. In doing so, you can put the property under contract easily by just using a business credit card. Once the property is refinanced or sold, the money can be paid back. 

Create the flexibility you need to succeed! 

Business credit cards provide the flexibility you need to be successful.. The most important benefit to using them is that they will not impact your credit score if you run up the balances. Almost every investor runs up their balance. You are not alone! Don’t fall for the deceptive leverage of personal credit cards. By using more than 20%, it will not only affect your credit score, but it will also cost you more. 

Don’t let your business expenses affect your personal life.

While investors are trying to use the leverage that they have available, using personal credit just makes it harder. If you are a business owner who is doing flips and rental using your personal credit cards, it will affect your personal life. For example, if your wife wants to get a new car or you need a HELOC, you may not have the credit score or DTI that you need to qualify. Just to clarify, DTI is your debt to income ratio.The lenders who will be lending you money are going to see that you have $75K in credit cards and you will have to account for that in your income.

Make the change today!

Business credit cards make life easier for you in so many ways! Protect your credit score by separating business expenses from personal expenses today. Don’t make things harder on yourself! Those who make the switch to business credit cards will create the flexibility needed for business expenses, while maintaining your credit for future loans or projects.

Contact us today to find out more about business credit cards and how you can improve your credit score today!

Watch our most recent video to discover why This Makes a HUGE Impact on Your Credit Score.

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