in this video I am going to be breaking down why credit stacking doesn't work and why I see so many people fail from all the clients that we work with that have tried this method in their own business and what you can do in your own business if you are trying to get access to more Capital so that you can continue to scale this year credit stacking is the process of submitting multiple credit card applications in a specific order with multiple banks in order to access large amounts of unsecured credits so here's a quick example for you let's say that you apply at bank a for two credit cards you apply for Bank B for two credit cards and then you apply to bank C for two credit cards for a total of six credit cards now taking that a step further let's say that each credit card that you get approved for is $115,000 so that's 30k at bank a 30k at bank B and 30k at bank C we're now upwards of right around $90,000 in unsecured Capital but wait gets better if you've done this process correctly and if you've staggered all of the hard in ques which if you have no idea what a hard Inc that just means that you give a creditor authorization for them to be able to look at your personal credit which in this case since you're personally guaranteeing it that's the method you're going to be doing when that hard inquiry hits again if you've done it right you're going to have one hard inquiry for TransUnion one hard inquiry for Experian and one hard inquiry for Equifax which means you have a hard inquiry just one per each credit bureau that's the ideal way that most people Envision it in their minds sounds simple but that's not what ends up happening in most instances the first thing that I see entrepreneurs do all the time is they're applying for the right stuff in the wrong order let me give you an example we had a client who before coming to us they were trying to get access to $120,000 worth of working capital and so they kept trying to apply for business lines of credit at their Local Credit Union the issue that they had is that it was the right product it was in the wrong order meaning they hadn't had enough business just yet or business credit built up just yet in their business to justify getting that business line of credit so we recommend that hey get access to at least three revolving business credit cards and then once you've used those for at least 90 to about 120 days and this is going to vary by business and how much capital you're looking to get then go back into that credit union and apply for that business onine of credit lo and behold after doing that they were able to get approved for that line unlocking the fourth line again it was the right thing at the wrong time second issue that I see on why credit stacking fails is the business owner has a thin file and so you can have a business generating half a million dollars you've been in business for 4 years you have an aged cor you have an aged LLC which means it's over 2 years old you can apply for flat out just something as simple as a business credit card not even a line of credit where they're most likely going to ask you for financials you you apply for something as simple as a business credit card and all of a sudden you get denied now you're probably thinking wait a minute my business is set up right I'm generating a net positive revenue and so what's happening is the bank is looking at how the business owner has managed their own finances up to this point and so if you're in that place where you're constantly submitting applications you may want to take a look at your personal credit score because your personal credit score is going to be the best gauge especially when starting out that a business is going to have of how they're going to mitigate the risk meaning are you someone that's going to POS possibly default in the future even if you're trying to secure the set through your own business which is why you as the business owner you want to work on properly structuring out your personal credit profile don't take a look at your credit card don't take a look at your banking app take a look at your FICO 8 score because that's the exact model that banks are going to look at so I'll give you a quick rundown you want to have less than three hard inquiries for each of the credit bureaus over the last 60 to 90 days you want to have at least five accounts again on the personal side with at least four of those accounts being revolving accounts actual credit cards from a bank not store cards at least one of those accounts I would say especially if you're really trying to take it to the next level at least one to two of those accounts you want them to be installment loans so this can be a mortgage this can be an auto loan you can even get away with a personal loan as well and then you want the total utilization that you've had up to this point to be less than 20% the same time last year I would have say 30% but Banks since then have been tightening up so I'm going to say less than 20% the closer you can get it to zero the better and then lastly you don't want to have any late payments in the last 24 months now if that sounds like it's lot of work well guess what running a business is a lot of work and so this is one of those things that you have to take care of so that you can enjoy the benefits of it later so eat the Frog buy the bullets get your credit taken care of and you're going to see how many doors are going to open up for you on the back end as you start submitting these applications the third mistake that we see is trying to fund a business that's improperly set up so I'll Define for you an improper setup if you have a business that you have an LLC for and you have no idea what the Ein is that's an improper setup because it's you need the Ein in order for you to actually apply for these business trade lines if you have a business and let's say you are marking it down like it's in the Consulting space but you are in the trucking industry that's improperly classified that's also going to get you flagged especially with how banks are starting to underwrite going into the new year and the new systems that they're using and so your business and the way that it set up has to tell a story this means that you are classified in the right business you have the right subcategory and you have the right trade in English IR this means that if I am in business management I do Consulting and let's say I do business Consulting for small entrepreneurs who are looking to scale their business with funding which is ultimately what we do I was able to properly encapsulate that on a business cred application now there's two times that you want to do this you want to be able to do that on a business credit application and you also want to be able to do that when you are speaking to a business Banker there's nothing that's going to turn off the bank more or make them weary of you when they ask you okay so what do you do for a living or what is like what what's your business involved in or how does your business generate revenue and you're ooing and you're uming and you're kind of like out of loss for words and so do yourself a favor before you even walk into a bank and before you try to credit stack your way into a multiple six figureure round and you start inching that up into a seven fig round you want to be very careful on what you're putting on applications because banks are taking that information and you they can kind of like cross-pollinate so if you had maybe a business credit application where you put oh I'm an LLC and then all of a sudden on another business credit application you put oh no I'm an es Corp and then all of a sudden on another business application you put a different classification code from what you put in the first two that's going to raise a red flag because the three systems that you want to pay attention to is going to be Lexus Nexus it's going to be early warning system and then you have the sfe which is a small Business Financial exchange all of these systems are going to communicate to each other even if they're communicating to each other indirectly because all the information is getting pulled from the same databases and so the minute that information doesn't start to line up with the story that you told Bank a is different from the story that you told Bank C which is different from what you told Bank C that's when you start getting what I call a sea of red across the board which is automatic denials you don't want that you want to avoid that at all cost which is why I'm giving you this information which leads me to my next two points that I'm going to bundle up together you're applying to too many accounts too quickly and then you're applying for too many credit lines too quickly as well one of the biggest mistakes I often see is someone opens up or at least attempts to open up a business account let's say I'll use Bank a not to name any banks you go to bank a and you apply for a let's say business checking account and then all of a sudden as soon as you leave you decide to open up for three business credit cards with that bank you haven't properly built up a partnership with that bank now some banks you don't necessarily need especially if maybe they're smaller Banks or maybe they're banks that aren't as strict with you living inside of their geographic location they may not care as much if you apply for credit line off the bat like as soon as you open an account but some banks do especially the bigger Banks they want to see some funds deposited into the account they want to see you using the account for at least 30 days 60 days 90 days they're watching your balances they're watching your spending habits they're watching you not just as a consumer but they're also watching you as a business owner and so when you're making those deposits when you're making those transactions you want to think to yourself everything that I'm doing they're obviously looking at and so how can I decision myself in a way that's going to want them to do business with me meaning when I go to apply for a credit line it's going to increase my approval odds so I typically recommend my clients you want to have at least 3 to 5K minimum inside of an account especially if it's one of the bigger banks in your region as soon as you open it up you never want that account to go under $500 and if the limit is higher say the limit is $1,000 before they start charging you penalties you never want the amount inside of that bank account to go below the threshold that's going to cause them to issue you a fine or it's going to cause them to issue you some type of fee is really what I should say and so you want to pay attention to those numbers and then you also want to look at the transactions that you're running through that account ensuring that all of the transactions that you're doing are related to the business that you are involved in the last thing you want is you have a Netflix charge that all of a sudden hits your business account that looks awful if if you are in the construction space and you're maybe Gathering roofing material drywall material paint have all of that running through that business account which then takes us into our final point be careful that you're not using dated or mismatched information here's what that means let's say you recently got married and your driver's license says your new name but your social still has your old name the bank that you're going to still has your own name your personal credit profile still has your own name because remember you're personally guaranteeing debt on half of the business that can trigger an automatic denial because there's a mismatch inside of the database and so before you go out and you start applying you want to have one name one address on the personal and on the business side one name for you the business owner one name for uh everyone inside of your business because this can also raise a red flag if you have multiple partners inside of an entity and so making sure that all that information matches up is up to dat and then then going in and opening the account and then going in and applying for the business credit line and then going in and applying for the business vehicle loan something as small as missing the junior or the senior inside of a name is enough for a bank to turn an application down altogether and so you want to take a new license or passport with you to the bank and update this across the board because the last thing you want is again to get Deni for something as Petty as mismatched information or dated info all together so there you have it those are some of the key things that I noticed uh from all the clients that we worked with on why they're getting the N whenever they try doing a credit stacking whether it's just a full-blown business on a credit stack or a full-blown business credit card stack uh for the most part this is what we're seeing and so I don't want you uh to be one of those people I want you to be able to go out fund your business and get access to more Capital so that we can continue to make the world a better place cuz it's flat up believe entrepreneurs make the world a better place so if you found value in this content consider hitting the Subscribe button down below don't forget that anytime we're not posting on here we're posting over on the Insight with ir Channel which is our podcast so if you like what we have going on over here you'll love what we have going on over there once again I appreciate you guys checking me out until next time everyone I will see you in the next video