What's up Facebook, Ty crandall here with Credit Suite today and we are going to be decoding your
third type of credit score, known as your bank rate a lot of people don't even know that this exists.
And today we are going to be diving in we're going to be talking about exactly how this works
exactly what it is and why you need to know about it. So look you're probably familiar already no, you
are definitely familiar already with consumer credit right you know consumer credit, credit
that's linked to your Social Security Number that you build a credit report you build a score you
qualify for credit lines loans and all kinds of cool things for you as an individual, you're
obviously familiar with that kind of credit and hopefully if you're watching and following us
you're becoming more familiar with business credit, otherwise known as corporate credit as well.
The second type of credit you have as an entrepreneur you have your consumer credit and you
had your business credit okay. A business credit corporate credit sense is credit for your business it'
a credit report and score that you're building for your business EIN that you're then able to use
to get all kinds of credit without a personal guarantee and credit check and make it easier
for you get financing for your business as well that's the second type of credit. Today I'm going to
introduce you to your third type of credit that most people know absolutely nothing about.
Michael, what's up man welcome thanks for coming in and this is called your bank credit, or it's also
referred to as your bank rating, and here's how the system works here's what you need to know and
when you need to know about it. So there are actually 3 types of credit you have is at
entrepreneur you have a consumer you have the business credit and you also have bank credit. And
bank credit basically is your ability to borrow money from the banking system, so that means if you ever
want to go get a credit card or a credit line or a loan from a big major bank the conventional bank we
call them Chase, Bank of America, Regions a big bank you need to know about this, because this is
the score they're using to determine if you should be given that loan credit line or credit card. Steve
hey welcome thanks for coming in, Sista hello thanks for coming in. So that is what your bank
rating is your bank rating is a credit score and a credit profile that's housed only by the bank
that determines I shouldn't say credit profile and score, I should say a rating system that's used to
determine how much money you can actually borrow from the banking system. Here's where you
don't need to care. You don't need to care for business credit building this has nothing to do with
building business credit and this is nothing to do with getting money from alternative lenders like
on debt. This has to do with getting money from the big banks like Chase, Bank of America accepted.
The SBA loans the credit cards the credit lines you may go to a pot so if you're going to look there
for money anywhere down the future or now you need to know how the secret bank score really
works. So let's go to the chalkboard today we're going to talk about how you can conquer the secret
bank rating. So remember there's 3 types of credit as I just mentioned you have consumer credit right
links your social business or sometimes called corporate credit linked to your EIN third type of
credit here is Bank credit this is a score a rating you'll never actually physically see you'll never
know about it's only available from the bank the bank your banker the underwriters of your bank the
only ones that would ever see this. So when we look at bank credit what it really is is your
full borrowing capacity from the banking system, so what this basically means is your ability to
borrow or get money from the banking system and that means from major banks the big banks, Chase,
Bank of America, Regions, etc. Now this is a mention only from conventional banks okay it's only
from conventional banks it does not apply to OnDeck or C or C Capital or all these amazing
alternative lenders that are going by a strength like cash flow credit or collateral it's only the big
banks to Chase, the Bank of America etc., Michael says the writing on the chalkboard is so
perfect. I know right this is our chalk my chalkboard artist actually did this check this out look at this
isn't she amazing, not to get off topic but I mean it is insane the artwork that she does. So yeah I
agree great ready you should see what mine really looks like okay. So full of borrowing capacity only
for the big banks very important for SBA loans I'm going to say very important squash that out I'm
going to put absolutely crucial, because you can't get this without having an acceptable bank rating
and I want to tell you what that is in a minute. So the primary driver of this Bank rating is driven is
your daily account balance over the most recent, 90 days so what they're looking at is your average
balance in your bank account over a 90 day time period. Now this isn't the only driver but this is the
main driver of the bank. So first of all first lesson is that if you're not going to go to a big bank
to get money you don't care you should know about this because I'm really big that if other people
like banks lending institutions suppliers credit issuers credit bureaus if these guys are making
lending decisions about you then you need to know the information they're using to make those
lending decisions. I'm really big on that kind of transparency but the reality is this mostly is
applicable when you're getting any money from your bank, first rule. Second thing what you now
know is that it's based on your average bank account balances primarily there's other factors
we're going to talk about over a 90 day time period 3 month time period what this means is it means
that if you're going to apply for a credit card credit line SBA loans from a major bank at least
90 days before you need to start paying very close attention to what I'm teaching you here because if
you get the bank balance high enough within that 90 days it doesn't matter what you did 4 months
ago 5 months ago 6 none of that matters. All they're doing is just looking at the last
three months looking at your average bank account balance and that's the primary driver of the score
so rule of thumb when you're going to go apply for a bank you should know about this and start getting
the proper funds into your bank account at least 3 months before so you have acceptable enough bank
rating. So here's how this Bank rating actually works, there's only what's called high mid and low
5 rating, high mid and low 4 rating. Now what's lendable are 5 ratings what's not lendable or 4
ratings, even a high 4 unlendable. So the goal here is to get you into the 5 and stay out of the 4
now the best scores primarily driven based on bank balance. So the highest score you're going to get is
if you're maintaining more than $70,000 on average or 90 days in your bank account.
A mid 5 would be 40,000 to 70,000 a low 5 the most the only acceptable lendable
score bank rating you can get is a low 5 10 to 39,000 which means you need to
keep an average balance of at least 10 grand in your bank account before you ever even think
about walking into a major bank to get financing especially an SBA loan okay. Now if you don't have
that you could fall into a high, mid or low 4, high 4 7 to 10,000 in the bank account
mid 4 to 7 low 1 to 4 okay. So that's how it works but remember we want to stay out of
4 we want to go here for 5, you got to be a 5 you got to be at this in order to qualify. Now
there's a lot of other things that can affect your bank rating as well, so again you know the rule of
thumb here is that before you apply for a bank loan make sure you have at least 10,000 in your
bank account for 90 days prior to application remember we are not talking about alternative
lenders, we're not talking about seek we're not talking about C capital we're not talking about
OnDeck we're not talking about peer-to-peer lenders like you know Lending Club what we're
doing is talking about the major banks here don't forget that. So ways to improve this rating
obviously keep $10,000 in the bank account over a 90 day period before you apply that's the obvious
thing to do right based on what you're now know, you want to open account right away the reason for
this was many benefits of opening the bank account right away the first benefit is that a large
part if you ever have a shelf corporation of things like that, a lot of lenders will look at your bank
account start date as your company start date and here's why, because a lot of people form entities
and never do anything with them for a while but if you're really going to do something with a business
you're typically gonna open a bank account it's one of the first actions you take you need to
receive money and you also need to pay checks. So most people that open business bank accounts are
doing so because they're ready to actually take action on the business, so by having your bank
account open longer then it helps you because it makes your business look more credible because a
lot of lenders are credit issuers we'll look at that as being the first time you really started
doing operations. The other reason is because of your bank rating, so your bank rating part
of the factors of ties in this is the length of time you've had your bank account for the longer
the business bank account to open the better it is for your overall bank rating. So another reason that
this is so important you need to have consistent deposits over time so think about a real estate
agent they don't have consistent deposits. What they have is a deposit here and deposit there
and it's just kind of scattered and there's not a lot of them what they're looking for it's regular
money coming in the bank account on over a regular time period, think of it like this I can't say
this enough. The number one primary and fundamentally almost only real thing lenders care
about is your ability to repay them, all the junk they ask you for the documentation the questions it's all
based on Jim just trying to figure out if you're going to pay the bill or not that's what they're really
looking for ok that's what they primarily care about is if you're going to pay the bill or not.
So when we look at consistent deposits over time what we see is we see consistency
okay, so what that means obviously it's consistent deposits. So what I mean is this if you're a real
estate agent you have 3 deposits in a month what happens next month if you only have one
would you be able to pay the loan if only one of those 3 deposits it took place that's what
banks concern with. So what they like are retailers right retailers are depositing money every single
day in their bank account because that's the way merchant accounts work, they go ahead they
process credit cards the merchant account deposits money Monday, Tuesday, Wednesday,
Thursday, Friday, there's consistent deposits the banks see a lot of money coming out into the
account on a regular basis and they know even if 5 or 10 of those transactions didn't happen no big deal
you'd still be able to pay anything that you're borrowed or you'd still probably have a good chance
of paying what's borrowed because you're having those cases and deposits in the bank account.
So not having consistency with deposits really creates an issue, and and tell you something else
that does is it decrease in this. When you have fewer and fewer deposits weren't that an indicator of
a business that's declining not growing, okay you also need to put more money in than you're taking
out okay this is called pod that this is really what they're looking for is greater deposits and really
higher basically positive cash flow is what we're looking for here. So what they want is they want to
see that you're putting more money in the bank than you're taking out, okay that's positive cash flow.
You're depositing 10,000 this month in you took out 9,000 last month you deposit at
12,000 you only took out 11 you're putting more in than it's coming out okay. So
that way that your balances are typically growing they don't want to see non-sufficient funds at all
overdrafts. These are very very very bad should know about if you don't already is ChexSystems
and you can go to creditsuite.com/chexsystems and ChexSystems is C-h-e-x
Chex C-h-e-x systems s-y-s-t-e-m-s- so our ChexSystems we have a link on our website I'm
trying to pull this up right now to make sure I have it right. Our ChexSystems link if you go to
creditsuite.com/chexsystems we give you everything you need to know about ChexSystems
okay. That's this is exactly what it is I want to show you here it's creditsuite.com/chexsystems
it's one of the most important links you're probably going to see here today at least
and what this does is it gives you everything you need to know about ChexSystems okay. You can
pull your report you can add a security freeze, you can add a security or you can get your credit score
you can lift a security freeze, you can dispute accounts all right here at this link and guess
what 100% of that is free. I just went ahead and got all the links for you and created a page on
our website that gives you those links. So now I'm having a hard time getting my screen to come back
to me welcome back okay okay. So ChexSystems here's why you need to know. Most people don't
realize this but you have another credit score, credit score and profile that's completely based
on your bank account history, yeah that's right all of your bank account how you've managed your
bank account every non-sufficient funds you ever had in your life it's all housed on a credit report
and you're issued a credit score that is from ChexSystems and this is from anybody that's
interested in how that's trying to lend you money for example that's interested in how you manage
your bank accounts. So most people don't realize is there's an entire credit score at a profile
that's built with their entire banking history on it it's pretty freakin scary, that's why we created
creditsuite.com/chexsystems that let you get your report for free, let you get
your score for free lets you add remove security alerts add a security or add a security freeze and
they even let you dispute information you see on that that's inaccurate. So everything you need to
manage ChexSystems you should know about, now the reason I tell you this is because non-sufficient
funds also go into ChexSystems. So not only will reducing checks and non-sufficient funds help your
bank rating but it's also important because all those not sufficient funds you have are actually
housed on your ChexSystems your bank account credit report and score. So now you know how to get
that and you know what to avoid the other thing is other services like CD accounts other accounts
that you have with the actual bank. The more accounts you have with a bank the more it helps
your bank rating, so what I mean by this is that for example with us we have a checking a savings and
a money market account we've three accounts that gives us more credit with the bank because we
have those 3 accounts now here is a huge important disclaimer. Only have all of your deposits
go into one account then distribute them to the other counts and here's why because when you
comes to getting revenue financing and getting merchant cash advances there's a lot of money
that's going to look at your business bank account to determine approval and they'll only look at one
account not multiple so if you had two checking accounts the deposits went into both you'd only
ever did credit for deposits into one of those two accounts and it could really ruin your ability to get
financing, so all deposits come into one account my advice there is open up a savings open up a
money market open up a couple other accounts that you can move money to because the more of
these accounts that you have got the more but by having a diversification of accounts with the bank,
it also helps your bank rating as well surprises interesting glad you like it man and Steve says I bought a hundred
bought $140,000 yesterday for $69,000 from noxious I have a couple weeks to pay I don't
know why but for some reason Facebook doesn't let me hit the see more button I don't know exactly
why. But for some reason it shows me part of your comment now but not all of it so Steve typing the
rest I can see I bought a 140,000 yesterday for for a 169,000 from
auction side I have a couple weeks to pay I have and that's all I have. So type in the rest of the
message that I can finish it I've tried multiple times but for Facebook live for some reason when
I go to see it see more it will not leave me an option of seeing oh here we go let me see
if again it's your question now. I have a couple weeks to pay I have about 130 or so available
credit on the credit card so use thinking the 0% card advances plus advance fee then get long-term
financing can flip it? Sure absolutely that makes sense unless you have a better idea house needs
30k that's exactly well are a lot of our clients are using unsecured credit just like you described
to buy physical property they're fixing up the property now a lot of my clients are using
business credits to do the fix of flip they're using Home Depot they're using Lowe's they're
using labor ready to get the supplies and everything you need to do the fix the property. And
then you turn around and then you flip the property then you pay off those credit cards and do the same
thing. Now when you have about three of those flips you want to let us know because there's
actual flipper financing that's specifically for the purpose of flipping properties that can help
you if you have about three of those under your belt. So hopefully that makes sense hopefully that
answers your question as well okay, so back to blackboard as we wrap up you also want to get
bank references you need to have a bank account because by having a bank account you're going
to get Bank references and that will sometimes be asked for on your application. Now if you're
interested in monitoring your credit reports for business you can go to creditsuite.com/monitor
we just added a brand new feature that's up for a limited time because we're beta
testing it where you can now for the first time in history add utility accounts even cell phones
to your business credit reports. You can deal with Experian and with Creditsafe right now at this
time we're only keeping this up for a limited time since a beta test creditsuite.com/monitoring
don't forget credit suite creditsuite.com/chexsystem will
get you access to your ChexSystems bank or your ChexSystems credit report which is your banking
credit repoert. How your banking history is rated your profile at your score and get you your report to
get you your score security freezes alerts disputing it's all free at
creditsuite.com/chexsystems so there's a couple links for you. So I'm going to go ahead and wrap
up that gives you and I'm going to turn and figure this out, Steve I was able to pull up your message
now I can't okay. So that hopefully answers all of your questions about your bank rating it's the third
type of credit score most business most people don't know about only people that need to worry
about it is business owners. Only time you need to worry about it if you're going to get a credit
card line credit line or loan from a major bank like Chase, Bank of America main thing to do 90
days before you go to apply for credit with a major bank make sure you have at least $10,000
in your bank account to have a low 5 rating a high 5 rating will happen with
70,000 on average your bank account over the course of 90 days. And don't forget the other
things you could do as well have more money going in than going out have consistent deposits
limit and non-sufficient funds open your bank account as soon as you possibly can. These are
other things that will help improve your bank rating and will help you get loans like SBA will also help
you get credit lines and other loans that are longer-term lower interest so for any other questions make
sure you reach out to us 877-600-2487 don't forget to go to creditsuite.com/monitoring
so you can actually grab your business credit ports for only 24 bucks you
can even now add accounts to including utilities to your business credit reports there if you're
sending getting a guide on building your business credit go to facebook.com/creditsuite
and on our messenger on our Facebook page just type in EIN we'll give you a really cool
free guide and will also notify you when we go live every week. So enjoy the chalkboards they're
all getting wiped clean this week and we'll be starting over with four new topics that we'll
be diving into over the next four weeks thanks everybody for tuning in don't forget to tune in as
we go live here on Facebook every Wednesday at 4 o'clock Eastern, thanks everybody have a great day.