In this video I share with you the secrets of increasing credit limits that we teach to hundreds of entrepreneurs each month.
It is extremely valuable because it allows you to:
1) Make big purchases such as a house, car, property even businesses
2) Allows you to keep credit scores high
3) Gives you the opportunity to start a business without giving up equity
To increase current limits:
1) Request a credit limit increase with companies that do not pull a hard inquiry
2) Update your KYC if your income rises 3) Spend more money on the accounts
To increase future limits:
1) Get secured accounts (SBL, CD, ect.)
2) Put cash in the bank account that you are applying with
3) Make more deposits (move merchant account)
4) State the potential of your revenue (what you reasonably believe you can make based on the industry you are in)
5) Ask for an increase before activating the account
6) Watch this video: https://youtu.be/n24VKp4TMIk
Here is a free course on how to get 0% business credit: https://courses.0percent.com/offers/o…
In this video i’m going to be sharing with you how to increase your current and future credit limits and who better to show you than Jeff “0%” Sekinger okay. So why is it important first of all it’s important to actually be able to do the things that you want to do such as start a business scale, a business buy real estate. You can’t do those things with super small credit limits. Number two is to keep your personal and business credit scores high so if you spend a little bit of money and you have a low limit that’s going to drop your utilization which makes up 30 percent of your score it’s going to increase your utilization which drops your credit score which is no bueno.
And then number three if you have higher limits now that’s going to get you higher limits in the future there’s something called comparable credit so when you actually go to apply for credit the banks are looking at a a bunch of different things but one of the biggest factors is how much credit does this person currently have and are they responsible with it.
Because if you’ve only been responsible with like two thousand dollars worth of credit why would they give you a hundred thousand dollars worth of credit? There’s no reason to unless you have hundreds of thousands if not millions in the bank okay. So the best way to get higher limits is by getting higher limits right now before you apply.
So we’re going to be going over both of those things how to increase your current limits and how to increase your future limits. So let’s go ahead and start with current number one ask, you need to ask the creditor for an increased limit and you don’t ever want to actually get an increased limit from a hard inquiry. So if you’re ever getting a hard inquiry on when you’re asking for a credit limit increase you might as well go get another account okay so because you can always transfer the limits from that new account to the old account to inflate the credit limit.
There’s no reason to get another inquiry on the same account but the companies that you can ask for a limit increase with no heart inquiry are companies like capital one, american express, uh citibank and discover, all those companies right now at the time of this video do not require a hard inquiry. So you need to be asking for one about every six months. Number two kyc update your kyc which is your know your client. This is more a back office term with the banks and what the important part is is your net worth slash assets and then number two your actual income.
So if a bank sees oh wow this person’s income went from fifty thousand dollars to two hundred thousand dollars we feel more comfortable giving them more credit because they have the income available to actually pay back that credit. Another way and you can call in and update that online when you call in or you can even do it online with some banks.
Another way to do this without actually telling them hey I got an increased limit or an increased income and assets is guess what you just put more assets into the bank that’s huge right now with the corona virus. Banks are really looking for liquidity so if you put money into an account that is going to greatly increase the chances of you getting a higher limit. Number three spend money the more money you spend on the account the better.
A lot of people get a bunch of credit cards because they understand hey I need to have 21 accounts to have a perfect credit score or hey I need more trade lines of my business get the personal guarantee off. That’s great but you actually need to start spending money on the accounts if you don’t if you don’t spend if you don’t have at least one transaction every six to 12 months most creditors will actually close the account. And if you don’t spend a sufficient amount of money on the account at relative to the actual credit limit they’re not going to give you more credit because if you have a bunch of credit with them and you literally use none of the credit you’re going to be like what do you even need it for just use your current accounts.
So if you actually spend a lot of money this just happened on one of my chase accounts, like I had an eighteen thousand dollar limit and I started maxing the card out about twice a month and I paid it off and after three months after paying it off for three months and maxing it out twice a month they increased it to 33 000. And then guess what I hit the limit again over and over again for another three months and guess what they do now it just it literally acts as a charge card.
So I don’t it goes way above the limit. I’ve had the balance up to like 70 grand and the limit says 33 000 and that also comes from me having more money in the actual business checking account. So it’s kind of a dual thing where hey spend more money and also increase your balances that’s awesome, if not just spend more money. I’ve done that on you know other credit accounts where they were going to require a hard inquiry but I’m like you know what I don’t want a hard inquiry I’m not going to apply for another account with you.
Let me just spend a bunch of money so what you should do is say hey you know all my expenses for this month is going straight on to this one card and then you can put all your expense on that card run a bunch of money through it for about three months and then they will increase the limit because they realize okay this person is credible they’re paying off their balances but they need more of a limit to spend more money.They want you to spend more money so they make more money. So start spending more money on your your current credit accounts.
Now how do you increase your future limits that you’re going to be applying for. Well the three things you just did with the current limits that we just discussed is going to help you get higher limits. As I said at the very beginning of this video so how do you get bigger accounts in the future the one of the best ways to do this really quickly is like say you know you’re young but you ran a successful business and you’ve accumulated some wealth.
Put some money into an account, so this is something I saw all the time when I worked for JP Morgan was SBL. I worked right next to this department the securities based line of credit okay so what is that it’s a secured account based on your securities. So with with a lot of brokerages you can deposit money into an account you can invest that money then you can get a line of credit that it’s secured against the securities.
So you usually need to have a certain amount of money in that investment account and then they will lend anywhere from 60 to 90 percent of the value of the securities in that account. That’s a great way to get a high revolving account reporting on your personal credit. Another great way is through you know a heloc, maybe you have a house go get a home equity line of credit.
Maybe you don’t want to do those two things and you want to really play the safe game and try to just keep up with inflation in which you won’t after the corona virus that you’re just printing 33 more money go put your money into a cd okay. It’s called a certificate of deposit. You can go put your money in the account it acts as a secured account and you can go do that you can also do this on secured credit card. So I don’t really recommend this if you’re unless you’re like really early starting out with your credit limits but if you want to have a higher limits which will get you higher funding in the future go put more money down on a secured account okay.
That’s going to get you higher limits in the future because now you just inflated your limits because you put more money onto account just like these. So if you have a higher secured limit that’s going to help you get way higher line of credit that’s how you can go from a five thousand dollar uh highest limit to the hundred thousand dollar highest limit on your accounts by doing one of those three things.
Number two is cash put more cash in the bank account. We’ve seen this be absolutely ginormous with approvals with the major banks in the united states during the corona virus. We’ve seen people just getting denied because they have too low of balances on in their checking accounts or they don’t even have a checking account so the bank really wants to see liquidity like I said uh earlier in this video.
If you can put more cash in the account that is going to help immensely with your new limits in the future. So what I recommend is the minimum is really 5k if you’re putting anything under 5k you know it’s not anything significant.
Anything over 5k is great and once you get over 50k that can really help you get higher limits okay. So if you have the cash and you can always you know if you have an sbl go after the account reports just pull out the line of credit deposit into the new bank account now you have a high limit it’s not reporting as high utilization because this account already reported on the statement due date.
Now you have more cash in the bank you apply for more credit you get a high limit at this bank then you use the cash to pay back off the sbl or the heloc or you know whatever account you’re using. That’s a form of debt hacking which I can do in a completely different video but put more cash in the bank before you actually go and apply for that credit account.
Number three deposits so the more money that you’re depositing into the account whether it be personal or business count the more of a relationship you’re gonna be building with that bank. These banks are billion dollar trillion dollar companies but they are still relationship based and the way you’re going to de-risk yourself is by having more deposits. So it’s similar to the cash thing but hey what I do is before I go apply for a line of credit or maybe it’s a term loan, I will move my merchants where I’m running a hundred thousand dollars through the merchants will put those merchant deposits into the business checking account and then you’re going to inflate the amount of deposits and inflate the cash balance in that business bank account before you apply for the line of credit.
And that’s going to increase your chances of number one on approval and number two a higher limit. Number four stated revenue whatever you’re actually stating on the application with most banks is when you’re applying for a line of credit that’s under a hundred thousand they don’t actually check any type of financials. Some banks are the 50 000 mark in some banks it just depends you know it can vary but most of them are under 100 000 are not actually checking financials.
So the more that you state in revenue for that business or the or income if it’s if you’re for applying for a personal account the higher the limit you’re going to get because if your credit is optimized and you’ve done the things in my previous videos to prepare your actual credit file to get approvals then they’re going to go off of your stated revenue or your stated income and they usually do 10 percent of your gross revenue in your business.
We even have some banks there’s one right across the street from my house in california we’re in cabo right now but in california that does 30 percent of your gross revenue on a line of credit. So it’s it’s really not too difficult to get to the point where you know if you’re making 100 000 a year which is quite easy a line of credits 30 grand with them that’s that’s pretty substantial and if you factor in hey that’s just one bank. You do a sequence of applications with five banks then you get up to you know 150k real quick.
So um state of revenue is very important what you need to know is don’t I mean you can’t be fraudulent with this don’t lie about that especially with like big companies with all the stuff going on with the corona virus and the sba right now if you lie on your applications they’re gonna blacklist you. You won’t get lending from them anymore so it’s important if you’re starting a new business your state of revenue should should always be what you reasonably believe you can make over the next 12 months if it’s a brand new business.
If it’s a business you’ve had for over a year state how much you made last year or state what you’re projecting for that year depending on the application but always state what you reasonably believe you can make in that industry or with that business. And if you don’t know do some research before starting the business that might be a good idea.
Before I jump into number five I forgot probably the most important thing that I want to discuss in this video is when you get approved for the account have it sent to your account so you’re going to get the credit card then instead of activating the credit card call the credit card company and say hey this limit that I got this 10 000 limit guess what it’s not even enough money for me to go on vacation or for me to invest in my business if it’s on a business account.
Make sure you’re saying hey if you’re getting a business account make sure that you say it’s for growth activities like you’re you have a marketing budget that the limits not going to suffice to actually purchase you know that marketing service or for the ad spend or whatever or maybe it’s the higher sales reps or anything that’s growth oriented tell them hey this limit is not high enough. I need to get a higher limit and before they even approve the credit account even the the credit card companies that require a hard pull on a credit uh limit increase will actually increase the limit without a hard pull.
Okay so that’s a huge hack that I forgot to mention in the video as you can see we got some more guests here they’re swimming around and uh chimming around all right but I’m gonna jump into number five right now. Number five you have to optimize your personal credit score before you do applications okay. This is very very important if you do if you try to do all these other things it’s not even going to work if you don’t do number five and a few examples of number five there’s actually six things but like one is like having less than three hard inquiries in the last six months the next one is having less than 50 utilization on every single account.
And there’s four more that I show on this video right here that you need to go watch okay. So go watch this next video I’m telling you you’re going to get value from it you’re going to be able to increase your limits and do cool things like buy real estate start businesses scale businesses and do whatever you want and create freedom options and choices in your life. So i’ll see you here on this next video.