There is a huge amount of confusion as to how credit works and how one can use it for their advantage. I know all too well the pro’s and con’s of having both good and bad credit, but I can tell you from personal experience that if you can build and maintain a solid credit file, you can do some amazing things!
For the month of December I will be giving away 31 tips to help you get started to a better credit score in 2015. I am doing this for a couple of reason but let me share a quick story with you….
I have been fortunate enough to make a lot of mistakes in business and investing. I have made money, and I’ve lost just as much money experimenting and trying different things in pursuit of entrepreneurship. So I am going to share a few stories with you over the next 31 days, both my success and my failures and I will be teaching and doing several webinars on credit to help give back what I’ve learned.
Back in 2012 I partnered with a few entrepreneurs to aid me in launching a business in transportation. The idea was that we would incorporate the business, purchase vehicles for lease, and rent the vehicles out or maybe start a chauffeur business for corporate executives and celebrities. We incorporated the business but we ran into some roadblocks with using my personal credit and the company to purchase vehicles. Initially the credit application was denied because the corporation didn’t have enough age. A good rule is that a company needs to be at least 2 years of age, verifiable through the secretary of state, in order for some lenders and banks to extend you a loan. Today, my company is over 2 years and this was back in 2012 when we attempted to do this, but no one ever told me. It was only through trial and error that I was able to figure this out.
Beyond all of that, Incorporating the business was probably the BEST thing I could have ever done because just having the incorporated business, by itself, set the stage for so many things down the road. I still own and operate the incorporated business today but the transportation leasing part of that business has not gone the way I wanted. No worries because the business is completely setup, corporate address, tax ID, business account, etc., and I can use it for so many things. It’s a true asset but you have to know what to do with it. The challenge for me was to ensure that my personal credit was in a good place that would allow for me to purchase multiple vehicles going forward.
That didn’t happen, but it’s still in progress and on my “to accomplish” list. However, let me tell you what DID happen….
I eventually decided not to wait on using the business simply for building the transportation business alone. When my father passed away in 2012 I took over his property along with a majority of his bills, estate taxes, etc. When this happened, among a myriad of other complications, I decided that I needed to find a way to start the business and that there was no perfect time than now. My mother had 2 vehicles at the time so I took over the note on one of the cars but towards the end of 2013 I decided I wanted something brand new. So instead of solely using my personal credit to purchase the vehicle I decided I would purchase the car in the companies name! I submitted a credit application using the Tax ID of the company. Lenders will run your personal credit but upon approval the loan will show in the companies name. This worked out perfectly and the whole process of how you accomplish this is too long for me to detail in this blog post (Stay tuned for my Credit Restoration Program). However, I was able to purchase a 2014 in my companies name without using my credit file.
I thought this was the most amazing thing ever and there are a lot of tricks to using credit that the public at large are oblivious to. These concepts and principals are the makings of how wealth and success is created in business and there were two primary benefits to me doing this:
1. This allowed the payments of the vehicle to show up in the companies name vs. showing up in my personal name attached to my social security number. This is beneficial because in the event you loose the capacity to pay the car payments it doesn’t affect your personal credit.
2. This aids in building up the credit of the company, which is looked at differently than personal credit. It’s also easier in some instances for you to get auto loans and credit cards when you are building corporate credit.
3. The registration of the vehicle shows up in the companies name and address. This is an excellent strategy for privacy and keeping your personal financial affairs separate from the business.
I am still driving the vehicle now, of which I wouldn’t have been able to purchase using my own credit but let’s take it a step further… While I was allowed to purchase this vehicle using my company credit, this gave me leeway to use my personal credit for other things, property, credit cards, etc. The strategy was also to work on strengthening my personal credit file so that I could diversify! Real Estate, transportation business, etc., and all of this because of how I chose to use my credit.
The name of the game is strategy and it all begins with your FICO score!
So in the month of December I am planning to do several webinars on credit and how you can restore your credit profile to help align with your personal and professional goals in 2015.
The Credit Restoration Program will be offering:
– Credit restoration consulting
– Credit strategy for personal and business
– Credit education and research
We are looking to do the webinars during starting the first week of December and we will be taking clients by groups on a first come, first serve basis.
The program will encompass 3 months of consulting and we will work with you to remove items, correct inaccurate information, and improve all 3 FICO scores. This is NOT a credit repair service. We do not simply dispute items and send out letters, our credit restoration system is much more comprehensive than that.
Stay tuned starting on Monday, December 1st as we will be starting our educational campaign and if you are on my mailing list, or following me on social media, be on the lookout for our scheduled webinar! If you have not subscribed to my list, please do so below!