Credit Foundation Sequence

Hello, and welcome to this module, the corporate credit foundation sequence. So at this point we are going to start building business credit. So before we happen, I want you to understand where we’re going and just have a few things to keep in mind before you start actually applying for the tiers of credit. So here’s what we’re going to cover. Number one, I’m going to get into the tiers of credit. So you’re clear about them. And then in the next module, I’m going to cover them in much more detail. And throughout the rest of this particular section, we’re going to be applying for corporate credit business credit, all that good stuff. Then I’m going to get into the 8 Rules of Building Corporate Credit. So that way, you know exactly what they are before you even start, I don’t want you to break these things. So let’s go and hop right in.

And this is going to be a fairly quick and concise module. So the tiers of corporate credit. So at the very least, your company must meet these minimum criteria before applying for any credit, which is why we did all we all, what we did before. So, number one, you have to have a legitimate business structure. INC, which is preferred or an LLC, Limited Liability Company. You must have a business address, a commercial business address. You also must have a business phone line linked to that address. And when it’s linked to that address, it must be registered with 4 1, 1. Okay. Also, you must have a business email with its own domain name and then also a business website in my professional opinion, having an about us page, a contact us page. And at the very least you can have it under construction, but you need to have that business website connected to that domain name with your email.

Also your application for your DUNS number must be submitted. And even if you don’t have your DUNS number at the very least, you still must have that application submitted. And then also a business bank account, okay? You must have a business bank account already established because this is going to assist us. And ideally you, you, you did extra credit and you even did the micro loan as well. And then last but not least be able to make at least $250 per month in credit payments, because you’re going to have to be purchasing things and paying them off in order to start building up that credibility. So this is, these are the rules. These are the ground rules before we even start building. So I want you to make sure you’re good on all of this, if for whatever reason you’re missing any of the above, go back in the previous modules and get that done first before applying.

Because if you don’t, you are going to shoot yourself in the foot and you’re going to prevent yourself from being able to obtain as much funding and corporate credit as possible. Okay? Now let’s go ahead and talk about the 8 rules. So if you’re an established business that’s been buying from vendors for awhile. Here are a few things you can do before applying for credit as well. So you may already be established. You may already be buying stuff from vendors and not getting credit for it. So, number one, what I want you to do is check your current vendors and see if they report to the bureaus. So the way you do this is just ask them, Hey, look, are you guys reporting to the bureaus? And if so, Hey, look, is there any way I can change my billing cycle for you to report my account until the credit agencies, Dun & Bradstreet and or Experian Intelliscore.

And it’s really simple, they’ll say, yeah, we can change your billing cycle to say, look, I want to ideally change to a net billing cycle. I have the money, but I just want you guys to report this. And then as your company grows, it, we’re more likely acquire utility bills. So right around tier 4, your company will be approved for utility credit without a personal guarantee, which is huge. And if you make a guarantee, a cash deposit will always be better than a personal guarantee. In my professional opinion, as it will force a credit reporting to go in the business credit bureaus and not your personal credit. So this is a huge thing in order to get utility bills reporting and your business’s credit. Now, what I want you to do is call the phone number and ask to register your phones in your business name as well.

So if you have a cell phone, I know Verizon does this, T-Mobile does this. If you have a Sprint bill, what you want to do is transfer those bills and re-register them in your company’s name or say, look, I want to transfer this from a personal phone line to a business phone line. Here’s all my information in order to do that. And then they’ll allow you to do it. I didn’t even realize when I had set up my Verizon account, I did it in my company’s name intentionally, and then they approved me for a $6,000 line of credit. Now I never use my, my cell phone. Well, I use my cell phone, but I don’t use my line of credit with Verizon. But the point is, is that I have a $6,000 line of credit and I still, I like the apple in 7.

I still have the iPhone 7. I think like the 12 or 13, is that a disciplined, but I still have apple iPhone 7. But anyways, the point is, is that I want you to make sure you transfer your cell phone bills over to your company name so you can get reported for that tradeline. Cause you’re already paying that bill monthly. Okay. So really what you want to do is look at any vendors that you’re paying monthly. I know cell phones is one of them I just covered, but any utility or any type of vendor you’re paying for your business, see if you can get them to report that information. Now, here are the 8 rules of building corporate credit, and I’m going to cover as we wrap this up. Now, number one, before you begin applying for any type of credit, it is crucial that you understand the basic rules of building credit scores.

So number one, number one, number one, pay all your bills early, okay? Pay early all the time. So Dun & Bradstreet is going to analyze this. And they’re going to basically, if you pay early, that’s going to really, if you pay ahead of time, that’s going to get you up to that 9,000 Paydex Score. So each payment is going to be calculating for your Dun & Bradstreet’s score. Also, you want to keep business and personal completely separated, right? Like almost like your man, big biggie. I don’t even remember the, a group a, was it eight, 10 commandments or whatever it was, keep your family and business completely separated, right? Keep your business and your personal completely separated. So in my professional opinion, you never want to use your social security number on financing applications, and you always want to seek to sign without a personal guarantee whenever possible.

This is especially true when it comes to building up those first tiers of credit. So you also want to maintain a separate bank account and accounting don’t mix funds or use personal credit cards for business purchases. So everything you’re going to be doing, you’re going to be making these purchases from your business checking accounts. Okay? Make sure you’re making these things from your business checking account and not your personal checking account. Remember, the SBFE is going to be able to analyze this data to make sure you’re good to go. Number three, do they report it’s critical that you identify on the front end. I’m going to provide you the list of vendors that, Hey, look are the vendors that you’re currently using reporting. And if not, can you switch to other vendors that are going to report because when they report is going to build up your business credit. Case in point, I just recently closed on a house and you know, I needed to buy a washer and dryer.

Okay. So now I could have obviously just bought the washer and dryer with one of my own personal credit cards or even one of my business credit cards. But I said, you know what, let me apply for a Home Depot card. And I did because I’ve been building my business credit and they approved me. And then I bought the washer and dryer on the Home Depot corporate credit card. And I’m going to pay that off. So as an example, so you just want to be thinking about how can you maximize stuff that you’re already going to use or spend, and then get them to report. And if they don’t report switch to vendors so that when they report that you want to monitor your credit report. So you always want to make sure your credit history and your financial reputation is up to date and it’s clean, nothing just like personal credit.

So you have Nav at this point. So you can always view your Nav account. If you have the business builder or the business loan one, you can go when you can look at your Nav report all the time to make sure everything is up to date. And then you also want to make sure you borrow responsibly, never spend on credit, which you don’t have in cash or cash flow. So typically lenders, when they see less than 30% of your total available credit being used, before they will approve you for additional financing. So basically you want to make sure you’re using the credit and paying it off. And if you have credit and it’s over 30%, don’t apply for any more financing until you get that bad boy paid down. All right, number six, you want to diversify. So I’m going to show you step-by-step how to get multiple credit accounts in different places.

But again, for example, what’s used my Home Depot card. Do I really need a Home Depot card? Not really, but I leveraged it because I knew Home Depot had stuff that I was going to need when I purchased my home. And I’ll probably end up buying some more things like light fixtures and some two by fours and just random things in the house that I’m going to use. So, am I going to use Home Depot like I’m a contractor? No, but I’m going to use it to build up my business credit for my, from our residents. And then I’m going to pay it off, right? As an example. So you just want to make sure you’re using that card and you’re paying it off you’re diversifying. And again, when you’re doing the tier 1 through like tier 4 accounts, never put your social security number on the credit application.

So that credit issue issuer may still check your personal credit, even if you enter the EIN. So instead of, so, so what you want to do is even if you enter the EIN instead of the social security number, which would be my professional opinion. You must state, Hey, look, my social security and is only being used as a platform, identity verification only. I do not consent for a personal credit check or a personal guarantee. So you want to make that clear. So in my professional opinion, just don’t even put your social security number down if you’re gonna avoid it until you start getting to that cash credit right now. One thing I did do now will say this, I didn’t have to put my social security number down, but I went ahead and did it for the Home Depot because I wanted to get those appliances.

But in, in some cases you don’t have to use your personal credit. I mean, you don’t have to use your personal security number, but again, when you’re building up credit, I’ve all, I’ve, I don’t want to sound confusing here. You don’t have to, but it helps in some scenarios when you’re first starting off with building up your credit. All right? And if you have excellent credit and you’re seeking another credit card and you want higher limits, then you can apply for business credit card, but we are personal credit only, not associated with your business bank account or your EIN. So again, you, you want to make sure when you’re applying for that business card, you do it with your personal credit. And what I’m saying is that you’re essentially using your personal credit as a personal guarantee, but your business bank, but it’s going to be linked to your business banking and also your business account.

So to speak your business credit and do not submit too many applications at once. So as you go through this process, you will not apply for no 1 to 3 applications per week. I say 1 to 2, but you can do 1 to 3 applications per week. And then when your higher limits come in, you want to also continue to do only 1 to 2 per month. So again, you want to be considering, you know, ideally thinking about the next 12 months, and you would have 22 to 24 different lines of credit reporting on your credit file. And you want to, you want to think about the end in mind, don’t go out and start applying for all of these credit applications all at once. Cause you’re going to look thirsty and the business, the lenders going to think there’s something wrong and they’re gonna, they’re going to be like, no, we’re not going to do it. So you essentially just want to stagger out the application process as you’re building up your credit. All right. So this is the rules I wanted to cover this first. I’ll see you in the next module.