Win the credit game by learning its Nine Rules
Date: August 25, 2015
Name: Win the credit game by learning its Nine Rules
Presenter: Richard Moxley
Many entrepreneurs do not understand how their credit score can affect their financial aspects of their businesses. Moreover, by understanding the secret rules, entrepreneurs can take advantage to improve their credit score. Vancouver Business Network invites Richard Moxley, the author of “The Nine Rules of Credit”, to discuss the inside secrets to increase entrepreneurs’ credit score. Richard Moxley will also share his experience to help entrepreneurs to prevent common misconception about credit history.
Before publishing the best selling book, “The Nine Rules of Credit”, Richard Moxley was a licensed mortgage broker for over 8 years. With his financial industry background, he decides to help people to remove their errors or fraud from their credit reports. In addition, Moxley has the passion to educate the right concepts and regulations about credit score to entrepreneurs. Therefore, he speaks across Canada to create awareness for entrepreneurs. Moxley also creates a step by step procedure system to help entrepreneurs win the credit game that they deserve.
Richard Moxley has a vision to understand how credit works and empower people the rule of the credit game. Many entrepreneurs receive bad credits are not because of finance, it is because they do not understand the rules. Therefore, Moxley wants to help entrepreneurs by work backward to help them understand.
Moxley shares many entrepreneurs thought they are playing by the rules, but they do not know that people make up the rules. The advantage is always on other side. If entrepreneurs are not clear about the rules, they will never win.
“It is not because it is not fair, it is because they do not understand the rule to win”
Credits affect everything in business, even relationship. Moxley states the biggest cause of any fail relationship is from poor financial report. Until this day, many online dating website are required to credit report submission.
Moxley will share 9 important rules for entrepreneurs.
Rule #1: Pay the bills on time
Moxley indicates when entrepreneurs pay the bills on time shows stable cash flow and responsibility. It also creates a good credit history to show they are reliable.
Rule #2: High balances equal low score
Many entrepreneurs have the misconception of having high limits on their credit cards will have low credit score. However, Moxley emphasizes the credit score is based on the ratio balance between the credit limits and credit amounts. The ratio balance must be under 50%. For example, if the limits is $1,000 dollars, entrepreneurs will need to keep their credit balance under $500 dollars.
Credit companies will only report what banks push. The time banks push is random. This shows why people pay bills on time will receive bad credits. To reduce this risk, Moxley suggests entrepreneurs to either keep the ratio under 50% or increase the credit limit because increase credit does not affect credit score.
Credit score is like the first impression of business.
Rule #3: It must have established credit
The credit companies will use a simple formula to determine a good credit status. Credit companies must see two credit accounts that have established 2 years of history. Both credit accounts should have at least $2,500 or more capital.
Rule #4: Some types of credits are better than others
Moxley indicates there are some credits that will not show up in the credit report. They are utility bills, Canadian Revenue Agency taxes, rent, and auto payment. However, it is important to know that if these credits go to collection, they will show up.
There are many companies that are not registered in the credit report. The only way entrepreneurs will know by check with their credit report periodically.
There are credits that will show up on the report, but they will not affect the overall credit score. These are mortgage, cellphone accounts and debit visa. However, even though cellphone accounts will not affect the credit, but if they are bad accounts, it will affect the chance of approving the new loans.
Entrepreneurs can build their credits from credit cards, line of credits, and loans.
Rule #5: What they do not use, they lose
Moxley believes if entrepreneurs do not use credit, it will show as being inactive. Bank will charge inactive fees for anyone who are not using credits.
Rule #6: Be careful of joint credit
Moxley wants entrepreneurs to know that they cannot have death with joint credits. This means if someone who are in the joint credit is bankrupt or died, the other person will be 100% responsible to inherit the whole debt. Even though entrepreneurs have a good credit history, a small bad credit from other people’s joint credit account will ruin everything.
A bad credit history will follow entrepreneurs at least 6 years.
Sometimes entrepreneurs have supplement credit accounts with other people. Moxley indicates when they close the supplement credit accounts, they will lose the credit history. Therefore, Moxley suggests entrepreneurs not to attach their name to their children’s credit because if their children ruin their credit, it will ruin theirs as well.
Rule #7: Applying for credit, lower the score
Moxley recommends all entrepreneurs to not purchase any assets or use credits until they have conversation with their finance or mortgage advisors.
Rule #8: Closing the credit account, lower the score
Entrepreneurs need to know that only the active and current credit accounts will be considered the history of the credit. If entrepreneurs close the accounts, it will wipe out the credit history on their credit report.
When entrepreneurs pay off their loans, all the hard work of history will be gone because they will close the account. This means if entrepreneurs want to use the credit for another loan, it will be better to process it before they pay off the current loans.
New credit card number does not mean it is a new account, but if entrepreneurs upgrade the credit card, the bank will close the existing credit card number and open up a new one. This will also wipe out the credit history for the old credit card account.
The strategy is to have both cards on active. If the bank cannot approve the finance due to high credit limits on credit accounts, Moxley suggests before entrepreneurs apply for finance, they should lower the limits, wait for 30 days and get the finance. After their finance is approved, upper the limits back to original.
Rule #9: Do not let someone else wreck the credit
It is important to check what is on the credit report. Entrepreneurs need to check for errors from both Equifax and TransUnion. The score is important, but it is more important to know what is on the report. It might take at least 6 months to correct the credit report. Moreover, entrepreneurs can check their own report any time and it will not influence their credit score.