The Only 5 Strategies You Really Need To Know To BE A Credit Optimization Expert

I find the answers very fascinating when I ask people whether they consider themselves to be credit optimization experts.

The people I expect to say yes (i.e. real estate professionals/investors, mortgage professionals, etc) usually say no and the people I expect to say no (credit repair specialists, credit counselors, etc) typically say yes.

About a third of them catch on to that special word in the question, "Optimization," and ask for more information.

You see - there is a big difference between credit repair which focuses on the derogatory items on your credit report and credit optimization which focuses on optimizing your entire credit profile.

Credit optimization is more about positioning yourself or others to access capital/leverage and ultimately creating cash flow/building wealth.

As a Real Estate Entrepreneur, your Collaboration Team will be depending on you to instruct them on how to access capital/leverage quickly, effectively, and consistently!


5 Strategies You Need To Know

1. Payment History (35%):  Needless to say, paying your bills on time is the most important component of your credit profile. This is where credit repair usually starts and ends.

Strategy: Engage a credit repair specialist to help remove derogatory items from the credit report. The objective is to use the law to your advantage; if it's erroneous or can't be proved, it must be removed! Remove as many derogatory items as possible, then settle any remaining debts (25 - 50% / dollar) in exchange for deletion only.

Tip: Use your business credit (or a Collaboration Team Member, that trusts you, business credit) to settle debts on your personal credit report(s).

It's important to note that it's less about getting out of paying your debts and more about reestablishing yourself so that you can pay or settle the debts. Not being able to do so serves no one - including the creditor.

You may also choose to add tradelines to increase the weight of your credit profile - speak to your RECFH Mentor to learn more.

2. Credit Utilization (30%): The percentage of your individual accounts and/or overall available credit being utilized at any given time.

Example:

You have three accounts with credit limits of $2,500, $5,000, and $2,500 and balances of $1,250, $3,000, and $2,500 respectively.

Your overall utilization is 68% [$6,750 / $10,000]. However, your individual accounts utilization rates are  50% [$1,250 / $2,500], 66% [$3,000 / $5,000], and 100% [$2,500 / $2,500] respectively.

Strategy: It is important to manage both your individual account utilization rates AND your overall utilization rate. It's recommended that you keep your utilization rates below 10% - especially before applying for capital accounts.

Tip: Transfer excess debt to your business capital account(s) (or a Collaboration Team Member that trusts you) that don't report to your personal credit report(s), if necessary, before applying for new capital accounts.

You may also choose to add revolving tradelines to decrease your overall utilization rate (some credit scoring algorithms may compensate for this strategy) - speak to your RECFH Mentor to learn more.

3. Length of Credit History (15%): The longest tradeline history and the average overall tradeline history are the things that matter most in this category.

Ideally, you want a minimum of one tradeline with at least 10 years of history and an average overall tradeline history of 5 years or more

Strategy: Add revolving tradelines to increase the age of your credit profile. Speak to your RECFH Mentor to learn more.

4. Credit Mix (10%): Types of credit. It is ideal to have at least one installment account and 4 or more revolving accounts. The higher the credit limit on each revolving account the better.

Strategy: Add revolving tradelines, if necessary, to meet or exceed the ideal number accounts. Speak to your RECFH Mentor to learn more.

5. Pursuit of New Credit/Inquiries (10%):  2 or fewer inquiries per 6-month interval is ideal.

Strategy: Go the extra mile to make every inquiry count. ALWAYS find out the qualifying criteria before applying for a capital account. Consult with your RECFH Mentor!

Remember - it's your job, as a RECFH Real Estate Entrepreneur, to help the Collaboration Team Members achieve the RECFH Individual Member Goal: Optimize your personal AND business credit profiles to gain access to $25,000 - $150,000 in new capital accounts each year, exclusively for the acquisition of income-producing assets.

Good Hunting!