All Forum Posts by: Frankie Woods

No, you can not remove the hard inquiries from your personal credit report. The inquiry is needed by the bank to insure you are not a credit risk as they will go after you personally if your LLC defaults on the credit card. In essence, you provide a personal guarantee when applying for almost all business credit cards from the large banks.

After your business has established itself (>3 years in business & > ~$5 Million in revenue), there generally is no longer a need for a personal guarantee.  At that time, there will no longer be hard inquiries on your personal report when applying.

The biggest benefit to having business credit cards is that they do not affect your credit score's utilization rate (which makes up ~30% of your score). Additionally, the balances are not provided to the bureaus, thus they don't affect your DSCR when applying for loans.

The hard inquiries will generally only affect you for the first year, and will drop off completely after 2 years.
  
 Hope that helps!

Congratulations!  What did the process look like?

Even with the 3k in Rental income, this would be tight.  Unless you plan to house hack, I would consider this risky from a financial security aspect.

@Jens Nielsen said, there are areas in ABQ that can be rough.  However, NE Heights, 8120 & 87114, and Nob Hill are all great areas.  I have three properties in each of the areas mentioned above and they have performed well.

@Adam Dinneny yes, Fox Park straddles 63104 and 63118.

@Tereal Wilsonn no, I haven't used plastiq to close on deals.  However, it could work with hard money or private money.  I'm very doubtful any bank would accept this.  You could get a cash advance and place the funds in your bank account for 2+ months to season them.  This would pass their under writing.

Generally takes 3 - 5 business days to clear

Establishing business credit is a lengthy process.  For the first couple of years, you will need to personally guarantee to credit lines as mentioned by @Charles Carillo above.  However, after you have an established business credit score, you no longer need to have the personal guarantee and a whole new world opens up to you.  I'm in the process of doing it myself because I want to have credit lines that don't impact my credit based on credit utilization and hard inquiries.  I think your personal credit is the most important to focus on, but having business credit is also a really good alternative in creative financing (e.g., not using hard money lenders and instead using introductory periods to get into properties.)  Good question! 

Excellent breakdown @Ben Zimmerman.  You covered everything I was thinking as well.  Military benefits are incredible if used correctly.

@Jeremy Blevins Thanks. You simply have to apply for a business credit card from banks other than Capital One, Discover, and TD [this list changes so it's best to google or check doctorofcredit.com, but I checked recently as of this post]. You will still need to provide a personal guarantee by giving your SSN, but it won't report on your personal credit report unless you default. You don't have to own an LLC. Technically any side-hustle counts (e.g., having a yard sale, selling stuff on eBay, etc.), but having an entity probably improves your odds of being approved. The hard inquiry will still appear on your personal credit, but it should only affect your score by 5 - 10 points. The utilization will not, which is awesome for those of use who like to BRRRR. Happy hunting!