Raise credit score fast with this simple investors’ trick.
New and seasoned investors alike prioritize one thing in real estate: financing.
Available, fast, cheap funds are key to a smooth career. And a high credit score is key to smooth financing.
We see investors make one key mistake that wrecks their credit score: they use personal credit cards for business expenses. This one mistake costs people tens of thousands of dollars in quality financing.
Let’s dive into this mistake and see what simple options you have to raise your credit score fast.
How We Help Raise Credit Scores Fast
Just this week we’ve closed two different loans to help clients raise their credit score.
They both needed long-term loans for the rental properties, but their scores were too low from the high usage on their personal credit cards.
We also just had an inquiry from another lender who’s looking for us to help their client pay off his credit cards so he could qualify for their loan.
What Causes a Low Score for Investors?
What causes this issue?
The #1 factor that determines credit score is payment history. On average, investors are responsible about timely payments. So what gives?
The #2 factor deciding credit score is your credit usage. This is the ratio between your current credit balance and your total credit limit. Investors often use personal cards to fund rehab on their projects, which rapidly raises their credit usage.
Let’s talk about the solution.
How to Raise Your Credit Score
If your problem is high usage, there are just a few steps you need to take that will drastically improve your credit score (and financing opportunities).
Firstly, you need to stop using your personal credit cards for business purposes. Treat your investments like a business. There’s no reason fix-up costs should impact your personal finances.
Secondly, get a usage loan to get your personal balances down now. When that money doesn’t report on your credit, your score improves almost immediately.
Lastly, open a business card to use for projects moving forward. Once your credit score is back in a good spot and you have a functioning LLC, apply for a business credit card. Balances on this card won’t reflect on your personal credit.
We’re happy to give you a hand at any step of this process.
How to Move Forward
Leverage is king in real estate. As the markets stay tight, interest rates stay high, and bigger institutions elbow their way into the lending space… Credit score only gets more important.
We don’t want to see a low credit score be the reason you don’t succeed in real estate.
If you need any guidance on your financing journey, don’t hesitate to reach out to us.
Want more info on business credit cards? Check out this video on our YouTube channel.