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Personal Credit:

Cash builds Credit, Credit builds Wealth.

Purpose of Credit:
Borrow money to earn more money.

Benefits of personal credit:
Personal credit is the foundation to success in any business. Establishing strong personal credit rich with history creates trust with financial institutions that results in the required capital when starting a business.

How to build it:
Debt to Credit Ratio. Control how much of your credit (cards) you use. Try never to carry 30% debt of your available credit into the following month.
Discipline. Instead of using cash for purchases, use a credit card. Then responsibly set
the cash aside to pay the card off.
Timing. Pay your credit card debts off a week before the payment due date.
Use credit cards for rent and all of your regularly monthly required expenses. This
allows the cash you spend on a regular basis to build your credit monthly.

Tools to build credit:
Secure Credit cards- requires the user to place a refundable security deposit, which the card’s issuer holds as collateral until the account is closed.
Shared Secured Loans- a way for you to borrow, using your own savings as the collateral. Instead of using all your savings to make a purchase, thus losing out on all future dividends and your emergency safety net, you’re borrowing against that sum while your money stays in your account.
Unsecured credit cards- Traditional credit cards that provide predetermined amount of
money as loan. Not backed by any collateral.
Authorize User- When you become an authorized user, the account is added to your credit report, which means on-time payments by the primary cardholder will help you build good credit history.
Best Banks/Credit Unions:
Credit Unions: higher interest rates/emphasis on customer service.
Banks: more convenient branch locations.
Allianz Credit Union
Navy Federal Credit Union
First Tech Credit Union
Chase Bank
Ally Bank
Wells Fargo Bank
Best Credit Cards:
Capital One Quicksilver
Discover It Balance Transfer
Chase Safire Preferred
Capital One Venture
Capital One Savor
Things that hurt Credit Scores:
• Just one late payment. …
• Not paying ALL of your bills on time. …
• Applying for more credit. …
• Canceling your zero-balance credit cards. …
• Transferring balances to a single card. …
• Co-signing credit applications. …
• Not having enough credit diversity.
• Holding high credit balances
• Ignoring credit report
Never use Credit cards when:
• Tuition. …
• Wedding Expenses. …
• Taxes. …
• Mortgages. …
• Vacation Expenses. …
• Medical Bills. …
• “Secret” Purchases. …
• Cash Advance.

Business Credit

What is it?

Business credit is a track record of a business’s financial responsibility that companies, investors, or financial organizations use to determine whether or not that business is a good candidate to lend money to or do business with.

How to start it?

Incorporate your business. …
Obtain a federal tax identification number (EIN). …
Open a business bank account. …
Establish a business phone number. …
Create a website
Populate your business location
Open a business credit file. …
Obtain business credit card(s). …
Establish a line of credit with vendors or suppliers.

Why is it important?

Good credit is the lifeline of your business. It enables you to obtain funding for things
like expansion, capital expenditures, research and development, and staffing.

Benefits of it?

THE CORPORATE VEIL: legal concept that separates the actions of an organization to
the actions of the shareholder. In addition, it protects them from being liable for the
company’s actions.
A good business credit score can enable you to more easily acquire financing,
increase the value of your company, and protect your personal credit. Here’s what you
need to know about business credit as an independent professional.

Ways to build it?

Dun and Bradstreet, Largest Business Credit Database.
Net 30, 60, 90. forms of trade credit which specify that the net amount is expected to be
paid in full by the buyer within 30, 60, 90 days of the date when the goods are
dispatched or the service is completed.
Credit Cards, Higher credit limits. Such cards typically carry credit limits of $50,000 or
more, making it much easier to make major business purchases that you would not be
able to make using your personal credit card or cash.
Six biggest business credit mistakes:
Maxing Out Your Card. …
Only Making Minimum Payments. …
Missing Payments or Paying Late. …
Not Reviewing Your Billing Statement. …
Giving Cards to Your Employees. …
Canceling a Card Prematurely.