BiggerPockets Money Podcast - 383: The Hidden World of Credit Hacks That Leads to 0% Interest Loans

Episode Date: February 10, 2023

Knowing how to build business credit could be the difference between starting your dream business or waiting on the sidelines. And while most people think that building business credit requires years of income, million-dollar revenue, or a personal connection with your local bank, Jack McColl is here to tell you otherwise. Jack has been able to unlock half a million dollars in business credit in record time through a simple system. He did this using means that EVERYONE has access to and is here today to teach you how to do the same. Jack is a credit master, knowing the ins and outs of every credit score rating, travel credit card, business credit card, line of credit, and everything in between. He teaches some basic techniques in today’s show about how you can get your personal credit score to 700+ quickly and then use that to grow your business credit profile, allowing you to access 0% interest credit cards that can jumpstart your business when you’re low on cash. And even if you aren’t planning onbuilding a business anytime soon, Jack’s tips will help you get a better credit card, a lower mortgage rate, and easier access to lines of credit. Jack also touches on the exact steps you need to follow to reach an 850 credit score and why the “no credit, no debt” line of thinking will hurt you later in life. He shares the best banks to get business credit from, which cards will help your score the most, and why you should always open a checking account BEFORE asking for a business line of credit. If you want to boost your score, build a business, or just travel for free using points, stick around for this episode. In This Episode We Cover How Jack scaled from $0 to $500K in business credit (and how you can too) FICO vs. VantageScore and which credit score is the most important Personal vs. business credit and how the two impact each other 0% interest credit cards and how to unlock them by building your business credit Boosting your credit limits and the three cards to apply for to boost your credit profile Lines of credit, SBA loans, and other options business owners have to draw funds from Credit card hacking and how to use travel point cards to globetrot for free! And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Money Moment Scott's Instagram Mindy's Twitter Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget My Score IQ CreditKarma Click here to check the full show notes: https://www.biggerpockets.com/blog/money-383 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets of Money podcast where we speak with Jack McCall and talk about credit. So really what I highly advocate and I think is so incredible, which is pretty much a newer product to the world, to the 0% interest business credit cards, which is 0% for the introductory period of 9 to 18 months. After that period, it goes up to the normal 15% to 20% credit card interest, but you have that introductory period. period where you're not paying interest. Hello, hello, hello. My name is Mindy Jensen. And with me as always is my business superstar co-host, Scott Trutch. Always excited to FICO the next thing out with you, Mindy.

It's definitely to my vantage, Scott. Look at that. Oh, that was way better. Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting. That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, or fund your very own or first business with a credit card, will help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Scott, today we're talking to Jack McCall. He has an interesting way of generating business credit, and he's going to teach us all about that. But before we bring him in, we are going to talk about our new segment, The Money Moment. This is where we share a money hack, tip, or

trick with you to help you on your financial journey. Today's money moment, one credit card hack we recommend is to have a credit card dedicated to recurring expenses only. This is a good way to keep track of the overall recurring spend, as well as make decisions on what to cut. Do you really need Hulu and Disney Plus? In addition, it'll be easy to spot any errors or overcharges. Do you have a money saving tip for us? Email us at MoneyMoment at biggerpockets.com. Okay, before we bring in Jack, Let's take a quick break. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing.

And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward. It's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier.

It brings your entire financial life, including budgeting, accounts and investments, net worth and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money

management simple. Use the code Pock at Monarch.com for half off your first year. That's 50% off at Monarch.com. code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes.

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not a bank. Bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Foun. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for

mental well-being. makes Audible so powerful as its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BPMoney. And we're back. Jack McCall is the founder of credit stacking. and scaled from $0 in business credit to $500,000 in available business credit in just over one year,

which he has used to fund a variety of new businesses and investments. And now he teaches other people how to do this too. Jack, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Awesome. Mindy and Scott, it's so incredibly great to be here. I'm really excited. Thank you for everyone listening. My job on this podcast is to provide all the listeners,

which has much tangible value as I physically can on this podcast. So thanks for being here. And thank you guys. Awesome. What would you mind telling us a little bit about yourself and the business you started? Yeah. So my name is Jack McCall. I'm the founder of credit stacking. It's a mentorship program where I teach entrepreneurs on how to dial in their personal credit, essentially so they can get access to business credit. On business credit, there are zero percent interest business introductory offers. So you can borrow hundreds of thousands of dollars at only a zero percent interest rate for one to two years. So I specifically teach people,

entrepreneurs on how to do exactly that. Awesome. So what, um, Walk us through some examples of that credit and why you need to build up your personal credit in order to begin accessing this. 100%. So the personal credit profile is the foundation to many, many things in life, not just as a normal non-entrepreneur, but for an entrepreneur as well. If you think about even if you're not in business, you need good credit to get a good rate on an auto loan, a good rate on a mortgage, to get approved for a lot of good apartments. And then when you're thinking about starting a business, maybe you're already a business owner, the personal credit profile is the number one single most

important thing on being able to get high limits on these business credit cards or get any type of business funding through credit products. So the profile is very strong and it's much more important than just a score. So some people can have a 750 score, but only one or two credit accounts. So we're looking at much more than a score. We're looking at the entire profile. we want to optimize each of the sections on the FICO report to make yourself as attractive as possible to the lenders. So you as an entrepreneur or aspiring entrepreneur can get access to money very, very easily when you need it. Can you share the difference between a credit profile and a credit score just so we know we're all on the same page? Yeah.

So a credit score is the score you'll see when you check your credit. Maybe it's 600. That's very low. Maybe it's an 850, which is perfect. If you're anywhere in the 700 club or 800, you're in a very, very good spot, ideally 750 and above. But really, when you apply for different credit accounts, like business credit cards, personal credit cards, different types of loan products, they're going to look at your credit report or your credit profile.

So they're looking at your score. They're looking at your average age. They're looking at your comparable credit, which means the limits of your current credit accounts, which means is your revolving limits only 1,000? Is it 10,000? Is it 70,000 of collective personal credit limits? So there's definitely a range there. Also, they're taking into consideration the amount of hard inquiries you have on your profile. And essentially, when you apply for a new credit account, you get a hard inquiry. And so if there's too many hard inquiries, you look riskier to the lenders. And so one other factor I will mention is the of accounts are very important. So if you have a Chase personal credit card, that account is weighted better on your profile than if you had a credit card at a local credit union because the Chase account is a tier one account. So they're looking at the limits of those accounts and they're looking at the banks that are giving you those accounts. And then they're also looking at the diversity

in your credit mix. So do you only have revolving accounts? like do you only have personal credit cards? Do you have any installment loans? Are those installment loans paid off? Do you have any auto loans? Do you have any mortgages? So if you can create a diversity in your credit mix, it's going to increase your score than if you only had personal credit cards. Awesome. That's actually really interesting. I had no idea about the various tiers of credit and how they would count into the score. You know, I feel like I'm I'm 32 years old, but I feel like I'm an old dog now because it used to be, in my opinion, where there's just one score, your FICO's score. But nowadays, I'm screening tenants and there's a renter's score. There's a vantage score.

There's the FICO. There's FICO 1, 2, 3, 4, 5, 8, 10, right? What score are we looking at when we're talking about this? What is the actual number that I should be worried about as a consumer in building up my profile? It's a great question. So FICO 8 is the Bureau or is the score, that most lenders are looking at when you're applying for credit products. When you're personal credit cards, business credit cards and loans, installment loans, they're looking at that FICO 8. If you're applying for an auto loan, they're going to be looking at a different model, but it's still very similar to the FICO 8. Yeah. And landlords, of course, are now using this renter score and with many applications, which is a whole different one number. One thing I will jump

in there, Scott, is the best place, my favorite place to check your credit score is a platform, called my score IQ.com. It will show your FICO score. And there is a difference between your FICO score and something called a vantage score. If you look at a lot of the free apps like credit karma or credit wise or any app that's in your credit monitoring service that's in your bank app that's showing you for free, that's 99% of the time showing you your vantage score. This is a decent way to look and see what accounts you have, your utilization, the age, things like that. that. But when it comes to your score specifically, the vantage score is, it can be a much more inflated score. So if you're actually trying to check your credit before applying for credit

cards or any credit products, you want to be making sure you're checking your FICO score, which you can do on myfico.com, Experian.com, or my favorite is my score IQ.com. For those services, you do have to pay a monthly fee. But if you want to look at the report that you know the banks are going to look at once you click submit, those are where you want to look. And every time I'm about to submit my applications for something, I'm of course looking at that report because I know when I click submit, the banks are going to look at it. And I want to see it first. Okay. That was going to be my follow-up. Is this a free score or is this a paid? How much does it cost? About 30 bucks a month. Okay. That is interesting. So, you know, make the decision based on if that's something that's

worth it to you. I don't know. I wouldn't recommend that if you're just getting started, if you're just thinking about this. But once you're really trying to build up your credit, $500,000 of business credit in a year, I think would be worth $30,000 a month. Not $30 a month. Yeah. And one thing I will say, there, Mindy, to start, if someone's starting in credit, they haven't checked their credit profile yet, I would start with Credit Karma and Experian, because Credit Karma is a free app, same with Experian, just the one bureau. So Credit Karma will show you Equifax and TransUnion, which is two of the three bureaus for free. Experian, the free membership will show you Experian, which is the third bureau, for free.

You can pay extra on Experian to see all three. But if you want a free option right now, get Credit Karma and Experian, and then you can check your reports on all three bureaus. And it is important to check all three bureaus because each bank is going to pull from a different bureau. So for example, if I'm in California and I apply for a Chase credit card, I know that Chase is going to pull from Experian. But if I'm in, say, for example, maybe Texas, Chase might pull from TransUnion in Texas. And so I want to know what each bank, each bureau looks like based on where I live because they could be pulling from a different bureau. And so,

the hard inquiries could be different from bureau to bureau. The accounts reporting could be different from bureau to bureau. And so you do want to check all three, not just one. Just to kind of hammer this point home, what is the difference between the number I see in credit karma and then the number that the credit score that shows up when I apply for a mortgage, which is different a lot of the time? What is the reason for that? And how do I view that number? So if you go on to my score IQ, you can see all of your different scores. FICO8 is what you want to look at if you're going to be applying for personal credit cards. There's an auto loan card. There's a mortgage card, just different profiles, depending on the products you're going to be applying for. But again, back to Credit Karma,

it's going to show your vantage score, which is probably an inflated score. That app does, it's very helpful to see how many accounts you have. What's your utilization at? How many hard inquiries do you have? What's your average age? Things like that, which is definitely valuable. and it updates daily, which is also very helpful. But when you're looking at your score, it could say 780 on credit karma. But if you check your FICO score on MyScore IQ, it could be maybe only 720. So maybe you want to work on it a little bit more. But there isn't going to be a gross difference, right?

You don't check credit karma and it says you've got an 800 and then the banks are pulling and it says you've got a 410. There's not going to be a gross difference, right? The difference won't be that big. But where it's very important is if credit karma says 720, but your FICO score is 690, you know, to be in 690, you're going to get much worse results than if you thought you had 720. Okay.

That's a good point. Yeah, because they're looking at FICO score, not vantage. So you always want to check FICO before you do the applications generally. Okay. So let's talk about business credit versus personal credit. can you get business credit if you don't have personal credit? There are some people in the financial space. The biggest one is Dave Ramsey, who recommends not having any credit score.

And I want to clarify that the FICO score goes from, is it $300 to $800? And if you have a zero credit score, that's way better than a $300. That means you have nothing as opposed to actively bad credit. But if you have a zero score, are you going to be able to get business credit? Absolutely not. I think for someone not to build strong credit is probably the most irresponsible advice I have ever heard, not just for business owners, but for non-business owners. Like we said at the beginning of this podcast, you need a good credit score to buy a house, to get an auto loan, to get into some

apartments. One of my good friends from college, he was actually, his dad was on the big Dave Ramsey train about budgeting, no credit, et cetera. So my friend, he didn't build credit. He tried to go buy a house at 25 years old and they laughed at him because he didn't have much on his credit profile. He wasn't able to buy a house for his, for his, you know, for him and his brand new fiance, which is, you know, quite embarrassing. So even if you're not in business, it's very important to build your credit because you can just do so much more when you have a good credit score. Then if you want to get into business or if you're already in business by having a strong score and a strong profile, this now gives you the ability to get access to $200,000 at zero percent interest for the introductory

period, which is between nine and 18 months. Now, some people will say, well, that's fine because I don't need that much money right now. Okay, maybe in six months or 12 months when this recession hits hard and you're trying to take advantage of discounted assets like purchasing more real estate or you need capital to keep your business afloat, you will want good credit. You will want good, because if you have good credit, you can essentially snap your finger and get access to this type of zero percent interest capital. But if you don't have good credit and you don't start building now, it can take many, many months. And when you need that capital, you might not be able to do it. Yeah. And I'll qualify this a little bit by saying it's not always true that you need

personal credit to build business credit, but it is, you can find exceptions if you're a nitpicker. But this statement is overwhelmingly true, right? Like bigger pockets or a large business could go out and get a loan from bank, or if you have a large real estate portfolio, you could find a non-recourse hard money private lender to do it. But by and large, you're going to have a very difficult time getting any type of loan for your business if you don't have good personal credit. Is that a good qualifier, Jack? Would you agree with that? Yeah, I would Scott, but what I would say to go off of that is if you're going for financing on products that pull your personal credit score, you will need to have good personal credit. And specifically the zero percent interest business credit cards

that I was referring to, those require no income verification and no tax returns. So a business with solid, you know, very strong tax returns, bank statements, et cetera, it would be easier for those businesses to go out and get business loans, but you have to show the financials and on a business loan, you're paying interest. So for zero percent interest, business credit cards, all you need is an optimized personal credit profile. And I'd love to go into that deeper as well to give you guys more context and tangible, tangible strategies. But having that profile and providing no income verification and no tax returns, that's how you can get access to over 100 grand, 0% for 12 to 18 months. Well, and just tagging off of Scott's comment,

maybe you can get this credit. Maybe you can get a mortgage with no credit history. Like the Dave Ramsey, they've got the, what is it, manual underwriting, you're just making it so much more difficult. You're just making the process so much harder. In this real estate market that we find ourselves in right now, it's starting to heat up in Denver. I'm starting to hear from all sorts of agents around the country that the market is heating up, maybe not quite as hot as last spring, but definitely hotter than the last six months of last year. So to make it harder on yourself, you're going to make it infinitely harder because if I just listed a house on Friday, it's Tuesday now, I have seven offers in my hand that I have to now figure out which one I want.

Somebody who has manual underwriting and is going to be a nightmare to get, you're automatically off the table. You have already lost the opportunity to buy this house because you're weird, you're different, you're difficult. And you can choose to live your life any way you want. I'm not the boss of you, but I'm going to tell you you're going to make it a lot more difficult. Yes. I wish I was the boss of you because I would then be able to tell you, stop doing this stuff.

You're making it harder on yourself. I agree, Mindy. And I think having good credit is a very alpha thing for any individual to have. It makes yourself stronger as a person in society, makes yourself stronger as a business person. And it makes your life much, much easier. Not even to mention the personal travel cards you can get, where you can get all these hundreds of thousands in points, where you can get free. travel. We can go into that in a little bit. But Scott, one thing I will want to tag on there,

you mentioned something about building business credit. And so one thing I will say on that is you can build business credit, business credit score, but to get access to business credit cards, it's not even necessary for people to build a business credit score. The only thing you need to have is an optimized personal credit profile, a business entity, ideally in a low risk industry, which we'll dive into as well, and then some sort of banking relationship and then understanding what cards to apply for, when to apply for those cards, and how exactly to apply for them. Awesome. Let's get into that. Walk us through some of these incredible debt products that you've kind of advertised here earlier in the show, and how do I get access to them?

How do I set myself up to use these as a tool? Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one

dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop

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and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money free. At Desjardin, our business is helping yours. We are here to support your business through every stage of growth, from your first pitch to your first acquisition. Whether it's improving cash flow

or exploring investment banking solutions, with Desjardin business, it's all under one roof. So join the more than 400,000 Canadian entrepreneurs who already count on us and contact Desjardin today. We'd love to talk. Business. 100%. So really what I highly advocate and I think is so incredible, which is pretty much a newer product to the world, is 0% interest business credit cards, which is 0% for the introductory period of a 9 to 18,000. months. After that period, it goes up to the normal 15 to 20% credit card interest, but you have that

introductory period where you're not paying interest. And so to do that, like I keep mentioning, strong personal credit. So let's, do you want to dive into the how to optimize your personal credit profile so you can do that? Yeah. Let's talk about these products and what you need to do to get there. That's perfect. Perfect. Okay. So zero percent interest, business credit cards. Let's talk about that because that is my favorite for sure. And to, prepare yourself, to make yourself attractive to these lenders, you want to build your profile. And so you want to have a specific amount of revolving collective limits. So ideally, I want to see at least a collective $15,000 in personal credit limits.

So say you have a $5,000 card, a $2,000, and a $10,000. Great. You're at $17,000 of collective personal credit. That's what I like to see. if you're someone that has maybe only $5,000 of collective personal credit limits, I would recommend to go out and apply for what I like to call them high limit personal credit cards. And I'll list them. One card that I see gives very, very good limits is the Apple card. Another card is the Chase Freedom Unlimited. And then thirdly, the American Express Delta Gold. I've seen those three cards give the

highest limits. So if you're someone listening and you have lower limits, you want to build up that comparable credit because the higher limits you have on your personal cards, the higher limits you're going to get on the business cards. So that talks about comparable credit right there. But before you start applying for any type of accounts, you want to make sure your utilization on every revolving credit account on your personal credit is under 30% utilization. And so you can use the full balance on your personal credit cards, but you just have to pay it down to 30% at least four days before the statement closing date. And each credit card is going to have a different closing date. So you can log onto the app and you can check and just make sure you bring your balance down to at least or under 30% before four days before that statement closing date.

So once you can confirm all the accounts revolving accounts are paid under 30%, then you can consider applying for these personal credit cards to build up your comparable credit. Another thing you'll want to keep in mind is the amount of hard inquiries you have on your personal credit profile. If you have more than two in the last six months on any of the three bureaus, it's getting on the high side. And there are different companies, credit repair companies that you can hire so they can actually dispute and remove those hard inquiries to allow you to get better results moving forward. So we're looking at the amount of hard inquiries. We're looking at the percent of utilization on each revolving account, not just the average,

but each account. And then we're looking at your comparable credit. Once you have no more than two hard inquiries in the last six months, once all your revolving accounts are under 30 percent, then you're okay to, and I also should say, no late payments in the last two years and no collections in the last two or so years. At that point, you can apply for the personal cards. to build up your comparable credit. Then fast forward, it'll take 30 days for those accounts to report. Say you fit all that criteria and now you have over $15,000 of collective personal credit limits.

At that point, you're probably in a good position to start applying for these zero percent interest business credit cards. So Jack, how would I use my great personal credit score and this checklist that you've identified for us of 15,000 in personal credit limits? They keep my utilization under 30%, making sure I don't have any hard inquiries or any other derogatory marks. How can I then leverage that to get access to financing for certain business initiatives? Yeah, so once you fit all those requirements on your personal credit profile, once it's optimized, I keep liking to call it, then you want to figure out what banks you have available to you in your specific state.

If your business is registered in California, that's going to give you a specific list of banks. If you're in Florida, that list is going to be different. if you're in New York, that list is going to be different. So you want to do some research to find what lending options you have available to you in your state, which an easy way to do this is type in California banks who offer 0% interest business cards. Start to put together a list. Some of the banks, you will want to have an open business checking account. This is to start to build that relationship with the bank so they can get more of your personal and business information. So ideally, you can put a little bit of money in that account so they start to trust you

more, but not all banks need open business checking accounts, but the two most important banks to do that at before applying for business credit accounts is going to be Chase and Bank of America. Doesn't matter what state you live in, I would highly recommend to prioritize building your relationships through Bank of America and Chase. Chase being number one for sure. Chase has the many branches, the best online platform, and they give out the highest limits, up to $100,000 of 0% interest capital between one or two credit cards. So to do that, go into a Chase Branch, make an appointment, open up a business checking account for your business. Tell them what your business does. They're going to then open that account for you. At that point, I would let a little

bit of money sit in that account for a few weeks. And then if your personal credit profile is good, you're ready to apply for the cards, then go for an online application or you can apply in Branch as well. So those are the first two ways you can apply for these business credit accounts. But the best way and the most effective way to get exceptionally high limits is through business relationship managers. These are the individuals that work directly with the underwriting teams. So if you can get assigned a business relationship manager, that's where you're going to get the best limits.

Awesome. And what businesses are these types of credit cards most accessible to? I think there were some industries that are, it's easier to get one and other ones much harder. Is that right? Yeah. So it all comes down to the industry risk. And so the banks will look at the NICS code and that will classify the risk for your business type. So if you have a construction business that's a little bit more risky than, say, for example, a consulting business because they're looking at the overhead expenses that businesses in that industry is going to have, right? A consulting business, there's not too much overhead. A marketing business, there's not too much overhead there.

And if you do real, if you do fix, if you do wholesaling, if you think about what that business does, it's a lot of marketing. It's a lot of lead generation. It's a lot of finding the buyers, right? So is your, is your wholesale company? How much marketing does that do? Could that be a marketing business, right? If you look at a physical gym, that's going to be much more high risk to the lenders.

So something to consider, the lower risk your business is, the higher chance you can get these high limits. But again, the most important thing is optimized personal credit profile, also the bank relationship. And then it comes down to what type of business do you actually have. You just said something about a business relationship manager. That sounds super fancy. And like my company has to be big and have a lot of money. Is there a minimum income threshold or business size or something before I can ask for this or before I can expect to get something like this? Generally, if your business is anticipated to to do between one and two million or above, that's when you're able to get a Chase business relationship manager.

Each banks have different thresholds, but Chase is at the one to two million threshold of revenue, of projected revenue, I should say. Okay, so that's more of maybe down the road thing. But definitely something to bring up and talk to them about when you're starting this out. I mean, I really think the most information that you have is just going to help you process everything. Oh, I didn't know this was an opportunity. Maybe if you ask about business relationship manager, they say, hey, your business doesn't qualify now, but there's another program, or we're rolling out this pilot project or whatever. I think that asking questions is always the best

opportunity, always the best option. I agree. Ask those questions, build that relationship for sure. Yes, Scott? Jack, what about some more advanced options here? So this sounds like a great way to get a credit card to fuel some of your next entrepreneurial endeavors. What if I want to use an SBA loan, for example, to make a small business purchase or combine some sort of debt to finance an acquisition with a credit facility with the seller financing or those types of things? Can you walk us through any more next level examples of how to use your personal credit to finance interesting investment opportunities? Yeah, for sure. So another good credit product to talk.

about. There's really two I want to go into, one being a business line of credit. There's some banks that you don't need business financials like tax returns or bank statements, like truest P&C key bank are a few of them, but most banks will require two years of previous tax returns and bank statements. And the more attractive those are, the higher amount of a business line of credit you can get. And essentially what a business line of credit is, it's an amount. of money that you have access to and you only pay interest on the money when you're using it. So, for example, a 50K line of credit, you can get a key bank. They don't require income verification, no tax returns. The 50K, you can pull 30K of it. And when you have that 30K,

you're going to be paying interest on that 30K. But once you give the 30K back, then you're not paying interest on that product anymore. And so if you're a business owner that has these very strong financials, tax returns, profit and loss, statement and attractive bank statements over the last three months, they're going to give you a specific amount on a loan based on your revenue and profit figure. Generally, they're going to lend about 10 to 20 percent of your top line revenue. Awesome. Yeah. And I've talked to some folks who run businesses and they're like, oh, I keep 50 or 100K in the business. And, you know, they're trying to invest. Well, why don't you just open up a line of credit and you can pull that number down to 25

or something like that and probably be able to conservatively operate your business, not have worries about that. So I think that's a fantastic tool to add in there. And then what about acquisition, like what types of business credit loans, whatever, are dependent on your personal credit score? Anything that pulls your credit is going to be based on your personal credit profile. So the 0% business cards, the business lines of credit, the term loans are all going to be based on your personal credit profile. If you do hard money, probably not. They're not going to pull your credit. If you do any private loans, they're not going to pull your credit, but credit is pulled for most credit products.

Well, Jack, is there anything else that we should know about when it comes to credit and using your personal credit to access really great debt and harness it for incredible investment opportunities? Yeah, so I think for the business owners listening or maybe you want to get into business soon, the first step to get into business lending, I think the easiest and most effective is for these zero percent interest business cards because it's no income verification. If you're a little bit more advanced, then that's when the business lines of credit or the term loans come into play, because not only do you need that good personal credit, but then you have

to show those business financials. So that's kind of the next step to graduate to. And then additionally, you can also start building out your business credit scores. It's interesting. And actually, one thing I have not mentioned on this podcast is business credit accounts, they don't report to your personal credit profile. And so if you max out a personal credit card, it's going to highly negatively affect your score. But if you get approved for a 50K business credit card and you max that out, because that account doesn't report to your personal credit profile, your score stays unaffected. So this is exactly how I've been able to get approved for a half million dollars in business credit in just over a year while using the business credit

because those accounts don't report to your personal credit profile. So that's a key. And it's very, it's much less risky to leverage business credit than it. is personal credit for your business. Because if you have a high balance on a personal card and you can't pay that back, your personal credit score is wrecked. But if you have a high balance on a business credit card and you can't pay that down for the next few months, your score is still unaffected. So you can always get approved for another business credit card and balance transfer the balance from the first card to the second if you need more time for 0%. Jack, I have a question here. Let's suppose that I have a flipping business. So I'm a house flipper. And I have a

I've got $500,000 in a business line of credit or a business credit card with a 0% APY for the first year. And I'm being responsible. So I've also got my paid off home, which I could borrow against in order to repay that. Would you recommend to someone in that situation to consider using that $500,000 to fuel my next flip instead of going to a hard money loan or taking out a HELOC on my primary, assuming I can complete the flip in the first year? Would that be a use case for this? I work with many, many people that do exactly that. If you can get access to $50,000 to $100,000,

imagine how many more deals you can do. And then even when you get to the point where you're paying that 15 to 20 percent interest, a lot of times people can do flips in a three to four month period, maybe six months, and you're not even having to pay that much in interest. But if you're borrowing it for free for the first year, I know so many people that can do two flips just during that introductory period before they pay any interest on the card. Well, I think it's a really intriguing and interesting tool here. And like any tool, it can be used to propel you forward and you can hurt yourself with it if you're not being smart. So it sounds like a really interesting option for some folks that want to have, you know, the opportunity for better rates.

Did you have any final credit card hacks for our audience before we go? Credit card hacks. One thing I will mention is if you're someone that loves to travel or maybe you're, your business that requires some travel to go visit possible deals, to go visit business partners, etc. Another major importance of having good personal credit is to get top tier cards that generate points and rewards. I have cards that get four times four X points per dollar spent. So if you have a good score, you can get access to the best credit cards, which will generate you the most amount of points and miles so you can use those points for free travel. So that is another major,

major value add of having good credit if you're someone that likes to travel or your business requires travel. Awesome. Is there a good resource for folks who are, I understand that credit card hacking can be a, like a full-time hobby, essentially. You can really go down deep into that world. Is there a place for folks to go to get started and learn a little bit more, begin dipping their toe in, find a couple ones that might make sense for them? Yeah, 100%. I actually have a link in my bio on my Instagram, where I have my favorite personal credit offers, which my Instagram is king of debt, king of debt on Instagram. If you click the link in my bio, you can see a link to my favorite personal credit cards. And, you know, they're there for a specific reason. A lot of people

don't understand what options they have available to them, what benefits these cards come with. And I've put together my list of my favorites. Awesome. Well, we really appreciate you coming on, Jack. Thanks so much. And it sounds like folks can find out more about you. at King of Debt on Instagram. That's correct. Thank you, Scott. Thank you, Mindy. Instagram at King of Debt.

Hopefully, I'll see you guys there. And thank you guys so much for hanging in. Thank you, Jack. We'll talk to you soon. All right, Scott, that was Jack McCall. And that was a lot of fun. I learned a lot about credit, specifically the credit profile. I think that's a very interesting term.

And I'm hopeful that our listeners were able to learn something about credit and credit scores and how to generate business credit so that you can go on to, to fund your business as well. Yeah. And, you know, like I mentioned, I think this is a, a tool, and it can be a very dangerous tool, or it can be something that spurs folks on. And, you know, who are we to say, don't lever up when you're getting started to go and crush your goals, right? I mean, when I was starting out my financial journey, I bought a duplex, making $48,000 a year for 240 grand, five or six times my annual income in debt to purchase that. And so the course, dangerous all-in move. And I think some folks will feel that they kind of have to take that to

some degree to do this, but recognize that if you're financing a big investment on a credit card, even at 0%, and you don't have a backup plan, that can really put you in trouble if things do not go according to plan. And so I'd really, really encourage folks to be to use this, consider this as a tool, but really be wary of it and not get addicted to it, for example, if you do decide to go with it once and it works. And just like with any real estate investment that you're doing, with any startup business that you're doing, have backup plans, have backups for your backups.

I'm opening up a helock. That's great. What else do you have in case this doesn't work out? Or you're opening up a business line of credit that has a 0% interest rate for a year. Great. What happens on month 13? You should be thinking about these things. before you take a dollar out of the account, before you borrow any money, you should have a plan

to repay it. Because if you don't, that's just irresponsible. Yeah. And as always, and again, I harp on this all the time, map your debt to the use case, right? Use short-term debt for short-term investments, right? Or short-term needs. Don't use short-term debt for long-term needs. That's how you get in trouble when things don't go as planned. So map those use cases. and be smart about it. But really cool tool. And it's, it's really impressive how Jack has kind of clearly outlined each of the steps necessary to build your credit and get access to the first serious round of financing or serious access to a credit line for a lot of folks. Yep. Huge thanks to Jack for his information today. All right, Scott, should we get out of here? Let's do it. That wraps up this

episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Indy Jensen saying, Tudaloo, Kangaroo. today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash biggerpockets money. BiggerPockets money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.