Credit can be a powerful tool for building wealth, but only if you use it wisely. It’s hard to make significant amount of money without leverage, and credit can provide creative financing options for real estate and business. In this episode of The WealthBuilders Podcast, Frank Pulley and Karen Conrad discuss how to use and control credit to make your investments successful.
How to Use Credit to Build Wealth: 5 Tips for a Better Score
1. Check your credit quarterly
– Get a report from the big 3: Equifax, Experian, and TransUnion
2. Stay under 50% of your credit limit
– It’s not good to max out your cards, even if you can pay the balance. If you really want to enhance your score, stay under 33%.
3. Aim for a credit score above 660
– The “good” range is typically between 660-780, and the “excellent” range is 780+
4. Triple check that you know when your payment is due
– Not paying your credit card on time destroys your ability to build wealth.
5. If you’re in business, pull at least $25,000 a year in gross revenue
– To get a business loan, underwriters want to see that your business is profitable and you can pay back your loan.
For more tips on how to use your credit to build wealth, check out The WealthBuilders Podcast!
