Hello I was told that to build good credit for my LLC, for the purpose of buying houses, I had to get 3 Credit Cards, 1 Loan, 5 Vouchers. My situation currently is that I have bad credit. My questions are:
How do I go about getting all of these with my situation?
Does anybody have a better way?
What are vouchers?
I’m just trying to build credit first and not trying to rush into a house purchase.
Thanks in advance for any/all the feedback.
Hi,
An LLC or C-Corp has nothing to do with your personal credit. Do not do transactions where you are requested to supply your personal credit or a personal guarantee!!!!
Building good credit is all about making payments on time every time!!!
It takes a minimum of 6 months to establish a good rating and 2 or 3 years minimum to establish longevity and a sufficient record of stability.
You can get one little credit card with a little available credit line, other types of credit are things like office max, dell, staples, and hp. Just a couple of little lines go a long way to building positive business credit!
The biggest thing people forget and fail to bother to achieve is cash flow, it’s having income and books and records and tax returns to support how and why a company should extend you credit???
Most credit card companies will extend credit based on your score without requesting tax returns, but a lot of auto, credit line and mortgage (Property) type loans require proof of income and tax returns, that’s just the way it is.
I have made some of my new entities (Corp or LLC) a partner in real estate transactions, I have allocated half of profits to the entity for income 6 or 8 or 12 times a year or more, saving sometimes a lot of cash in the entity as it’s a partner and it’s earning income!!!
Then 2 or 3 years down the road when I decide the entity has grown up enough and matured enough to invest in real estate on it’s own, it has 2 or 3 years of tax returns, some assets and could have a couple hundred thousand dollars in the bank, debt free and easily prove it is stable and responsible enough to buy a $60k or $100k home on it’s own!
Your probable thinking "He’s talking like this entity (LLC or Corp) is a seperate entity (A person) well it is, it is it’s own entity outright and capable of going on in perpetuality long after your death!!! Provided that it is properly managed, upholds records and stays in good standing and files taxes!
I am not sure what your refering to as “Vouchers”?
GR