2) I have to use my personal funds and credit to fund and run my business.
Almost everyone I've talked seem to think that Business's have to be ran under your credit. They also don't understand that Business's have their own credit. A business owner can walk into a bank and if his business has a good enough rating, he will not have to sign a paper with his name on it.
Any reasonably sized business that uses credit for anything should really pay attention to this misconception, it really does hurt you. Business Owners are really hurt with our current system because you have to sign for all of your personal credit, AND your business credit. This doesn't have to be true for you though. By utilizing techniques we teach, we help start your business credit file, build it up with trade lines, and help you acquire those hard to get Line of Credits and Credit Cards, many without you guaranteeing them.
The best thing about a business credit profile is that it allows you to hide debt. Anything you put on a Business Account never shows up on your credit profile. This allows you to use your business as you need to, without worrying about hurting your personal life and credit.
Businesses that don't use credit regularly can still use this method to earn interest off of the banks. Many of our customers make over $6,000 just in interest by using our techniques and tips. Stop depending on credit and the banks, start making them work for YOU.
Thursday, March 6, 2008
Wednesday, March 5, 2008
2nd Common Misconception about Credit
2) I should close a Credit Card if I do not use it
This is another big misconception we hear all the time. If I don't use a credit card, store card, or charge card why would I not close it? While I agree you should be able to close it, and that it shouldn't hurt your score that isn't how it works.
By closing that account you do 2 things. You reduce your available credit, thereby raising your utilization anytime anyone examines your credit report. And you closed an account that had positive history on your report.
The best thing you can do is to "Sock Drawer" it and only use it 1-2 times a year to keep it active. Just put it in a safe, sock drawer, safe deposit box, somewhere safe and just don't use it except for that occasional purchase.
This is another big misconception we hear all the time. If I don't use a credit card, store card, or charge card why would I not close it? While I agree you should be able to close it, and that it shouldn't hurt your score that isn't how it works.
By closing that account you do 2 things. You reduce your available credit, thereby raising your utilization anytime anyone examines your credit report. And you closed an account that had positive history on your report.
The best thing you can do is to "Sock Drawer" it and only use it 1-2 times a year to keep it active. Just put it in a safe, sock drawer, safe deposit box, somewhere safe and just don't use it except for that occasional purchase.
Tuesday, March 4, 2008
1st Common Misconception about Credit
Before I start delving into specific topics, I really wanted to get out some common misconceptions out of your mind. Over the next 10 days, I am going to be covering the top 10 lies, misconceptions and mistakes people hear about credit.
1) I should only have 3-4 credit cards so as to not hurt my credit.
Actually this hurts you more than it helps you. The FICO scoring system works off of a couple variables. It includes 1. Payment History: Approximately 35% of your score. 2. Utilization; available credit/used credit: About 30% of your score. 3. Length of Credit History: About 15% of your score. 4. Pattern of Credit Use: About 10% of your score. 5. Types of Credit in Use: About 10% of your score. 6. Number of Inquires also factor in.
Having only a couple credit accounts hurts you in 2 main ways:
- If you ever Revolve Debt; which means not paying it off before your statement hits; you are revolving debt. If you have $60,000 in credit available, and you revolve $18,000 you will show a 30% utilization. This will usually drop your FICO score between 20-80 Points depending on different determining factors. Even if you pay off the balance every month and never pay a penny of interest, you're still hurting your score.
- If you only keep 3 Accounts, if you ever end up closing one of your revolving accounts, all of a sudden you lost 33% of your open revolving account history. This could drop your FICO score between 30-60 points, even though you did nothing wrong.
When we consult our clients, we teach that more accounts only help you. Both by raising your available credit, and by having another positive account on your report.
Tomorrows #2 Mistake will involve closing Credit Cards and why you shouldn't do it.
1) I should only have 3-4 credit cards so as to not hurt my credit.
Actually this hurts you more than it helps you. The FICO scoring system works off of a couple variables. It includes 1. Payment History: Approximately 35% of your score. 2. Utilization; available credit/used credit: About 30% of your score. 3. Length of Credit History: About 15% of your score. 4. Pattern of Credit Use: About 10% of your score. 5. Types of Credit in Use: About 10% of your score. 6. Number of Inquires also factor in.
Having only a couple credit accounts hurts you in 2 main ways:
- If you ever Revolve Debt; which means not paying it off before your statement hits; you are revolving debt. If you have $60,000 in credit available, and you revolve $18,000 you will show a 30% utilization. This will usually drop your FICO score between 20-80 Points depending on different determining factors. Even if you pay off the balance every month and never pay a penny of interest, you're still hurting your score.
- If you only keep 3 Accounts, if you ever end up closing one of your revolving accounts, all of a sudden you lost 33% of your open revolving account history. This could drop your FICO score between 30-60 points, even though you did nothing wrong.
When we consult our clients, we teach that more accounts only help you. Both by raising your available credit, and by having another positive account on your report.
Tomorrows #2 Mistake will involve closing Credit Cards and why you shouldn't do it.
Start of Something Exciting
Well here it is; the first post of many to come. My brother started a blog and it got me thinking of how blogs can really help people, while bringing traffic to your own site. So I decided to start a blog to help those who need help with Credit and Financial Knowledge or just want to learn more about the Industry.
I'll be posting topics that include:
- Credit Based Leverage
- Business Incorporation and Credit Buildup
- Personal Techniques and Tips for Credit Usage and Acqusition
- Credit Repair Techniques for both Business and Personal
- Common Mistakes and Fallacies to do with Credit and Finances.
- Much much more
Also if you have any topics you would like me to talk about please let me know and I'll do what I can to help.
I'll be posting topics that include:
- Credit Based Leverage
- Business Incorporation and Credit Buildup
- Personal Techniques and Tips for Credit Usage and Acqusition
- Credit Repair Techniques for both Business and Personal
- Common Mistakes and Fallacies to do with Credit and Finances.
- Much much more
Also if you have any topics you would like me to talk about please let me know and I'll do what I can to help.
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