- Success Story
When people set up their own businesses, they will require access to a steady stream of funds. This is especially so for small and midsize business owners, who rely extensively on these funds to drive their businesses. Not all business owners have sufficient capital of their own for funding their business requirements. So, the only recourse available to them involves taking credit.
Credit card issuers report balances to the credit bureaus once a month. By making weekly payments rather than monthly payments, a lower credit card balance will be reported on your credit report. For example, let’s say you have a credit card with a $10,000 limit and you charge $8,000 on it every month. At the end of the month, you pay off the $8000. If that credit card has a reporting date that’s closer to the end of the month when your balance is the highest, it will always reflect that the card is 80% utilized. This will cause a low credit score. Instead, if you pay $2000 per week, the balance will always be 20% and therefore will always report on the credit report as being only 20% utilized. This will result in a higher credit score!
This video shares techniques that Midwest Corporate Credit uses in order to prepare a client’s file to go into underwriting. Its also a great case study on why business owners should not use personal credit in order to finance business expenses