Zero To A Hundred – Episode 12: Unlocking Credit Mastery For Business Growth With Jerrad Havins!

Accelerators, it’s time to take control of your financial destiny! 🚀 If you’ve ever wondered how to leverage your personal and business credit to unlock new opportunities, you’re in for a treat. Jerrad Havins, the CEO of Credilife and a certified FICO expert, brings over a decade of experience helping entrepreneurs like you build better credit profiles, boost FICO scores, and secure the financing you deserve. We’re breaking down all things credit, from the psychology behind your FICO score to the nuts and bolts of separating personal credit from your business credit. Whether you’re looking to become bankable or want to set yourself up for long-term success, Jerrad has the strategies that can make it happen.

🔹What’s on the Menu:

• Key strategies to improve your personal and business credit. 🏦
• How to separate personal credit from business credit. 💳
• The best practices for optimizing FICO scores and becoming bankable. 📊

🔥Why Tune In?

• Jerrad shares practical tips and expert advice on how to build strong credit profiles, understand FICO scores, and leverage business credit for success. Whether you’re a seasoned business owner or just getting started, these insights are essential for long-term financial growth.

💬 Gem from Jerrad: “Credit isn’t just about borrowing—it’s about creating opportunities for your business to grow.”

📞Get in Touch with Jerrad:

📧 Visit Credilife.com or Jerrad360.com for tools and services that can help you optimize your credit.

👉 Want to take your business credit to the next level? Get your complimentary business credit & finance scan, including a strategy and review session with Jerrad: https://bankable.credilife.com/prequalificationtest/prequalificationteststep1.aspx

Don’t miss out—hit that subscribe button and let’s accelerate your business from zero to a hundred! 💥

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Unlocking Credit Mastery For Business Growth With Jerrad Havins!

I have the privilege of introducing Jerrad Havins. He is the CEO of Credilife, a financial wellness company. He is a certified FICO professional. He’s been in the business for over a decade and has serviced over 15,000 clients. We are going to talk about some key topics that are going to help you build your business and become more profitable such as FICO scores, what they mean, and more importantly how to improve them, how to become more bankable, and figure out that magic ratio between revenue and expenses when you are building business credit. You are looking for loans and credit lines, how to do it, what the bank wants to see, and how it can help your business.

For those of you who do not know me. My name is Jarrod Guy Randolph. I’m the Founder of BoxFi. We are a business growth solution through payment processing. I am very excited to share the network I have built over 25 years as an entrepreneur and show you ways to grow your business and become more profitable. Ladies and gentlemen, let’s accelerate together.

Jerrad, it is wonderful to have you on Zero to a Hundred.

Thank you. I’m excited.

Negative Relationship With Credit

We are going to have a great conversation. We are going to talk about everything personal credit, move into business credit, how to navigate between the two, and use it as a tool to grow the profits of your business. One of the first things I want to start with might be controversial. It is that the majority of us have a very negative relationship with credit. Can you talk a little bit about that psychology and why many of us have a negative relationship with credit?

It varies on the person. I have been the CEO of Credilife for over ten years. Before that, I had always had a role since I was eighteen in the world of finance. What I have noticed is that there are a few different segments of people. Some people have gone through an issue in the past. There are a lot of different things that can happen to people, like divorce or job loss. Let’s say they are business owners and they have gone through ups and downs.

A lot of times what ends up happening is these events in their lives caused a negative impact on credit. A lot of times people don’t understand how it truly works. They have heard things like pay your bills on time, like the simple generalities, but they don’t understand the specifics of how it works. I feel like when it comes to most adults when we get confused by something, especially when it’s so important and hindering us, we get frustrated and angry, “What is going on here? Why can’t I get these things done?”

I feel like there are a lot of times when those types of circumstances can cause a negative mindset toward credit. There’s a lot of confusion around credit when it comes to why credit impacts insurance premiums or why they care so much about my score. We serve people nationwide but here in Minnesota where I grew up, it’s very conservative. A lot of people operate cash-heavy. It’s not uncommon for me to work with clients here locally that have either no credit score or low credit score. They have very limited data because they are cash-heavy.

There are so many different variables involved. It comes down to credit and money. That’s what it is. A lot of times people have a negative mindset towards money as well, whether it be how they were raised or the hindrance of opportunities or stressed out financially. There are so many different variables. I feel like when it comes to the aspects of our life and what we have gone through, which a lot of people have gone through a lot, that is where I feel like that negative mindset occurs.

One of the things I want to talk about while we are on this half is how we shift that. How do we start to have a healthy relationship with credit? Before we get into that, I want to point something out. You said why insurance was impacted by my credit score. It’s the same thing in the payment processing industry. Your credit score can impact the rates that you could potentially get from your payment processing company.

Having healthy credit as an individual if you have to personally guarantee or as a business is tantamount to the success and growth of your business. How do we and the audience start to have a much healthier relationship with credit even those who don’t have such a negative relationship but just don’t have a relationship?

It starts with understanding. For me, the best way to make that happen is when you have a goal. When you are motivated to accomplish something, you are going to naturally as human beings be more motivated to either learn or take action or both. To improve that overall relationship, you have to have those things, “I have gone to this issue. I’m over it. I’m sick of it. I want it to be better. I want more opportunities in my life,” all the different emotions we may feel. That’s the shift that needs to happen.

Once someone has that shift in their mindset towards it, they are now going to be more open to learning. That’s what it is. Once we start to have more clarity on how this works, I reference this all the time. I compared it to fitness. I have gone through my health and fitness journey where I have gained weight and lost weight, gained weight and lost weight. When I look at it, the reality is a lot of times when you first get started, “It’s so hard. I’m in the gym. I’m having a hard time. I’m so sored. I don’t want to do this again.” It’s all those things, but then all of a sudden, when you start to workout a little bit more, you start to lose some weight and start to feel better.

Those emotions naturally motivate you, “This is working for me. Let’s keep going.” It’s the same thing in the world of credit and money. When we start to make these adjustments, we start to have more clarity and we can start to see the light at the end of the tunnel so to speak. When that motivation kicks in, they are like, “What else, Jerrad? What else can I do?” All the time I hear that with my clients when they are getting excited like that, “What else should I be doing now, Jerrad?” I love that because to me that’s an indication that they are getting in the game. They are starting to understand it and they are ready to pursue it further.

Building Personal Credit

If we are talking to someone who is a business owner and wants to build up their personal credit as well as business credit, what are some goals to set to start to get to that point?

In that respect, it would be specific to where they are at. Whether they want to start a business or maybe they already operate or own a business. That’s the first two things that we have to look at, then from there, let’s use the example of someone who already owns and operates a business. For me, what they need to begin to look at is the awareness of where their personal credits are at.

The easiest way to do that is by leveraging what’s called online credit monitoring. I’m not a big fan of Credit Karma because it’s a simplified summary with only two credit bureaus, not all three. The scoring system in there is not FICO. That leads to additional confusion, but there are other platforms out there. IdentityIQ is a great one. It provides FICO 8 scores and all three major credit bureaus in the data within it. From there, we can start to get a better understanding of where we are at with our credit. That’s number one. I have been doing this for a long time. The awareness around business credit has increased over the past few years, but it’s still very limited.

A lot of times business owners have heard about it, but they don’t know what it means, how to get it, and how it helps them. It’s gaining some knowledge of that. The biggest purpose around business credit to me is twofold. One, it’s creating a separation of your personal credit from your business. That’s a big one and we want to talk more about what that means. From there, identify how I build up business credit in a way that allows me to get access to more credit and capital that can be used specifically for business growth or management purposes. That’s where you want to start.

If you are a new business owner and you haven’t started one yet, I’m telling you, if you start to get this education now in advance, you will have a leg up. I talk to clients all the time. My father works in the grocery industry. He helps a lot of brands that are looking to get into Costco, Walmart, and these big companies. That’s a very competitive space regardless of what product you are pushing.

What’s common is a lot of times, people invest a lot of money or cash to essentially start. Whether it be a franchise opportunity or a new product, they invest their cash heavily. What ends up happening is they are usually looking at what they need to just get started. What happens is they jump in and they start to realize, “I need more money for this. I need more money for that. I’m having a hard time executing. I had no idea that I was going to need money for this.” This happens all the time.

As a new business owner, if you can start to have more clarity on, “How does this work? What type of funding do I need, my startup cost, my operations costs, and my marketing? What type of marketing do I want to do?” Start to reverse engineer it, then in advance, we can look at the personal credit. Make sure we optimize your credit, and then from there, look at business credit opportunities to fill those gaps. That’s going to put you in a much better position than a lot of people and what they have gone through. I’m sure anyone tuning in to this who has a business or has gone through this is going to go, “I wish I would have known that when I started.” There are advantages on both sides.

Personalizing Personal Credit

One of the reasons why we have you is because it’s never too late. Let’s talk about maximizing or optimizing your personal credit. What are some of the key factors that the audience needs to consider where they can do that?

There are a few factors. I will break it down simply and then I will go into more detail. When it comes to the FICO algorithm, that is the credit score. That is a mathematical algorithm based on the data within your credit report. When it’s run at that moment in time, it spits out a score and that is your perceived risk value. The higher the score, the lower your risk. When it comes to the general FICO wheel which is important to understand, 35% payment history.

The one thing I like to talk about is you want to make payments on time, but more importantly, I would say most people don’t know this. The reason why a late payment negatively impacts your score so much is because such a large portion of that wheel is specific to payment history. If you think about it, FICO is a risk assessment algorithm. You are not necessarily significantly rewarded for doing what’s right or what you are supposed to do, but you are severely negatively impacted if you do something wrong. Late payment is a big one.

If you think about it, it’s been recent. You are going to apply for something and there’s a recent 30-day late. Now the perception of that lender is, “You were recently late. I’m worried about extending you more money because it appears to me that you already have an issue with repayment with someone else.” That’s a big one. You want to make sure you make your payments on time.

The other piece, I like to focus on more because I feel like we have more control in this area. Making payments on time, we have control, but we can be more strategic in this next area, which is called the revolving debt ratio. Thirty Percent is still a massive chunk of the score. That is credit cards and lines of credit. In most cases for most, it’s going to be credit cards.

That work is based on what was reported. What was the balance on the credit report? What is your limit? What is that ratio? Anytime that balance in that ratio increases, the perceived risk to a lender is higher so therefore your score will begin to drop. A lot of times, people don’t understand how this information is even reported. I’m sure you know yourself or you have heard this. A lot of times, people say, “I use it for points. I use it for this and I paid off in full every month.” That is extremely common to hear that.

Guess what? Your payment is not what was reported. They generate the statement. That information is what’s reported to the credit bureaus. If you think about it, typically, your statements are generated 2 to 3 weeks before your due date. Even if you paid off in full, if you max it out, it’s going to reflect that on your credit report and cut the severe negative impact on your scores.

You need to know your payment dates and pay your credit cards two weeks before those actual dates that they report to the agencies.

There are a couple of ways you can do it and it’s specific to what the goal is of the client. I will go through this real quick. Let’s say I’m someone and I’m looking to have a strong credit profile. Maybe I want to buy a home in the future. I want to access lower interest rate terms. My recommendation when I’m working with clients around that is it would be easier, in my opinion, if we work on a debt reduction plan first if we do have balances. Let’s bring the balances down to zero, and then from there, based on what we are looking to apply for a mortgage, the actual best reporting ratio is 3% of the limit. That’s it.

I want to emphasize something because I want to make sure what you are saying is clear for anyone who is tuning in right now. The magic number to hold on your credit cards is 3%. If you have a credit card that is $1,000, that’s $30. If you have a credit card that is $10,000, that’s $300. That’s what you want reported to the agencies on a monthly basis. They don’t want to use it but realize it is not 30% or 20% which a lot of people think that it is. It’s that 1% to a maximum of 3% monthly revolving on these cards.

That’s exactly what it is. You said it perfectly, 3%. I would say in that first scenario, let’s bring it down, and then from there, we change our buying habits where we only charge in the course of a month up to 3% of what that limit is. Let’s use a $1,000 limit credit card as an example. We are only going to charge up to $30. Maybe that’s Netflix, Hulu, or something. Things like that are typically easier where you are already making that payment monthly and it falls within that ratio. You want that dollar figure.

That to me is going to be the easiest way where most people will succeed because we can set things up on automatic payments and set it and forget it for the most part and it becomes a credit-building tool. That’s what I like. However, if let’s say your business owner. This is where we get different strategies. A lot of times whether you are a business owner or maybe you are someone that does traveling sales, you get to use a personal card, and you get that reimbursement and then you get to keep your miles. That’s common.

For someone like that where it’s like, “I use this for these purposes,” then what we would do is pull up their statement. On the credit card, it’s going to have a line that says, “Statement closing date or billing cycle and date.” That’s the two terms that they will use. Every month, it will typically be roughly 2 to 3 weeks before your due date. It will say it there.

What you can do is save that date, you could do a reminder on your calendar, or whatever it is. I would say three days before that statement’s closing date, you would want to make a payment, pay the balance down to that 3%, and then three days later, generate your statement, and now we have taken control of the reporting aspect of our credit while also maximizing opportunities around points and miles.

Negative Marks

Let’s talk about some of the negative aspects that impact your credit like a missed payment or multiple inquiries if you are going to buy a car or you are trying to get an Amazon credit card or if you have multiple addresses on it. Can you get those things off of your credit? It is one of the big questions.

There’s a little bit of a difference between what we brought up. When it comes to different address histories, think about this. When you look at a credit report, in the very beginning, it’s going to have what’s called personal identifying information. It’s going to be your name, different spelling variations of your name that have been used whether by accident or whatever it might have been. They call it AKA. They are going to have address history, employment history, and phone number history.

Anything within the personal identifying information section, you can dispute that and get that removed. That’s relatively straightforward. You want to do due diligence and follow up to make sure the bureaus acted properly and got it done for you. Let’s talk about inquiries, late payments, collections, and charged-up accounts. There are so many different things, like a derogatory or negative account.

It’s important to understand this. Anything that is reported to the credit bureaus, they are for-profit companies. They make money on data and nowadays people know more about data and the value of data. They didn’t before. As soon as Amazon came into the game, people started realizing, “There’s so much money in data.” Data is king. The credit bureaus are the king of data. They are three separate companies. They are for-profit businesses. When you hear about credit bureaus, you might think of regulatory governments. No. They are for profit. It’s Nike, Reebok, and Adidas. That’s what it is in the world of data.

Information is reported to them about you. They are going to siphon that in to get attached to your record. What they do is they sell that information for a fee. If you apply for a mortgage, that costs money. If you apply for a credit card, that costs money. They sell it nonstop for marketing, applications, and all of it. There are laws in place, the Credit Reporting Act. Because of that process, what’s happened is they have empowered the consumer and they put the responsibility on the consumer. What is your legal right where you can challenge everything on your credit reports?

A lot of times people think, “That was me that it happened,” and things like that. It’s not about that. What we are going to do is we are going to put the onus back on the creditor and the bureaus where now they need to prove what happened before is accurate as of today. You want to be very specific in how you go about that. You want to challenge aspects of that account’s history. Not the account. I’m not saying it’s not yours. We are not saying it’s fraud unless it was.

We are going to challenge very specific components and aspects of that account in a way that’s difficult to verify. If they are unable to do so, the credit bureaus must permanently delete your reports. There’s no longer verifiable data. They can no longer sell it. That is credit repair in a nutshell. That’s what we are doing with our clients that need that service. It helps us to repair the past. That’s a big piece. If we are looking to move on and we went through an issue in the past that got some stuff on there, we can fix it. Let’s figure it out. It doesn’t mean everything goes away. It can happen, but anything negative that’s repaired or removed is a massive win for you. It allows us to get to the next level faster.

Do all of the credit bureaus have to report the same account information?

No, because they are separate and it’s also specific to what the creditors themselves reported. It’s not uncommon to see inaccuracies or differences in account between the three bureaus. A part of what we do at Credilife is we are partnered with an attorney firm. When we are going through the investigation process and we identify these types of inaccuracies and the bureau’s failure to do their due diligence and what’s being requested for investigations, that can open them up to a lawsuit. There are times that will leverage that for our clients. One of the biggest things that we identify are differences in reporting between the three bureaus where it’s the same trade line or accounts.

Personal To Business Credit

This is important for the audience to realize. If you do have negative marks on your credit, there are ways in which you have the legal right to get that off of your credit report. Do not let anything that happened in the past hold you back from moving forward with success in building personal credit and also building business credit. Jerrad, what I’d love for you to talk about is how you marry that process of creating or establishing that personal credit and transitioning it into business credit where it’s no longer based on your Social Security number. It’s based on the EIN for your business.

The first step is we talk about how we need to evaluate and do an audit of a personal credit report. From there, we are going to identify areas that we can improve and optimize, whether that be strategic debt management like we have talked about a few points earlier, whether that be maybe creating a debt reduction plan that works within your financial situation over time, whether it be credit repair as a tool to leverage. There are so many different things. We are going to do that first. We are going to see where we are at and if can we squeeze in any more points of improvement.

From there, we hit certain benchmarks. I like my clients to have at least a 680, FICO 8 score. FICO 8 is the algorithm most commonly used for business credit cards and credit cards, as well as a line of credit for business. They are going to run FICO 8 scores specifically. We can pull that for our clients. There’s no cost to it and we will know what that score is without inquiry. We can monitor that and see where we are at.

The higher the better. Every twenty-point increment in your score improves the terms available to you. If we think about it like 680 to 700 to 720 to 740 to 760 most lending stops around 760. That’s usually the benchmark that you will see no difference when it starts to exceed that in most cases, but that’s going to be our goal. How do we optimize? How do we improve?

From there, what we are going to do is go through a discovery process. We do this at the same time, but we want to know what your business is. How do you make money? What does your sales cycle look like? What type of credit and capital are you looking for? What is the use of funds? How are we going to use those funds to benefit your business? Get a better understanding of their financial foundation. That’s important for me. I will explain later as to why but that’s important.

From there, we can Identify business credit cards and business lines of credit. Maybe it’s a business term loan, whatever it might be. We can begin to position the entity or the company and its overall bankability to then be approved for those accounts. At that point, this is perfect because we then create that separation.

We are leveraging personal credit to open up the door to better top-tier accounts, and now we are going to maximize that on the business side and build up a business credit history, and then we can begin to access even more. That’s super important for people to know because a lot of times, they don’t understand the two and they could easily put themselves in a position to pay significantly more on a business loan than they would have if we had done that process first.

Let’s talk about some of the key factors and the first step that you as a business owner need to take to start to build your business credit.

Let’s go into the details of business credit and how it works. You have different scores for business credit as well. In the world of personal, you have FICO. That’s the big player of scores. In the world of business credit, you have PAYDEX. Experian and Equifax have a business credit score. There’s also FICO small business administration.

The most important score of those in the ranking of priority is exactly what I explained. It’s going to go PAYDEX to Experian to Equifax and small business FICO. What you need to understand is that initially, I would say depending on the business between 6 to 12 months of building, it doesn’t mean it’s going to take that long to get credit, what I mean is building the credit. To build up a PAYDEX score, you have to have at least three accounts reporting to Dun & Bradstreet and build a PAYDEX score and they have to report for at least three months consecutively.

There’s a lag time before you even see a score. From there, once we begin to generate a score, how we leverage that is if we are looking at certain loans that a company needs. What ends up happening is when we have a PAYDEX score that’s positive and we have a great personal credit score, now we have lessened the overall perceived risk of that application. That lender is going to automatically feel comfortable to extend more credit and typically improve terms. That’s how we do that.

Over time, as we build that up, I would say in most cases, we’d want at least six overall accounts reporting between credit card trade lines and loans. We have to build up more history. It’s not quite difficult. It can take a little bit longer, but once we build up enough, that’s when we can open up opportunities where you have further separation where they no longer need to even pull personal credit in an application. There’s a process there where we marry the two and then they get divorced and get terms.

Dun & Bradstreet

That’s a great analogy. Where does Dun & Bradstreet come into play?

Dun & Bradstreet, what is so funny about this is they are the biggest player in the world of business credit data. They operate the same way as personal credit bureaus do. They take data and they sell it. I’m sure that any business owner out there has been bombarded by PAYDEX. They have a very strong sales division where they are constantly pitching all their different products, building business credit, and all the different stuff. The issue is what most people don’t know is you don’t have to pay for any of that. You can get a Duns number for free. When you open up accounts that report to Dun & Bradstreet, it’s going to happen on its own as it does with personal credit when it approaches the bureaus. It’s a similar process.

The best way to leverage Dun & Bradstreet is for the data and tracking of the data like you would a credit report to make sure everything is accurate and make sure that your information for your entities is accurate. I’ll give you an example. This happens quite often. Let’s say we have a business owner and they have moved locations. Maybe when they first start their business, they use their home address. All of a sudden, a year or two later, they are doing good. They open up a brick-and-mortar office.

It’s not uncommon. What can happen is when information is reported to the business bureaus, my terminology is not as sophisticated as the personal side where it takes that data and gets associated with your account. What ends up happening on that specifically is they would open up a separate record under the same company because of the difference in the address.

What ends up happening is you have accounts that were reported to one previously with your personal address. Let’s say we have a new account that’s reporting to the business. In theory, we’d have two separate profiles with two separate scores now. We need to bring them together. The reason why that’s important is that at Dun & Bradstreet, we use that for the accuracy of data, monitoring, and awareness. That to me is their greatest benefit and the best tool in how to leverage them.

Bankability

That is key information. For the business owners out there as a recap. Getting that Dun & Bradstreet number is important, making sure that your information is accurate. As soon as you possibly can, establish the official business address that you are going to be using because if you change from a personal address to a business address, you are going to lose the credit that you have built under that personal address for your business. It’s key to have that physical or that business address from day one. You spoke about something early that was important in passing in terms of bankability. What does that mean and how important is that for you when you’re going out and getting lines of credit or actual loans for your business?

For me, bankability means understanding how to position your company or your entity to get access to the credit and capital that you deserve and that you need for growth. An example of that would be this. Let’s say a lot of what we are discussing a business owner does not deal with. They have been in business let’s say for two years. They generate consistent revenue. Maybe they have fair credit. It’s not horrible, but it’s not great. They go and apply for a loan.

I’m sure you’ve seen this. I get it all the time. I’m a business owner. There are a lot of finance brokers in this world and they do a lot of marketing. A lot of times, what they will do in their marketing is they are going to position the top tier best case scenario up to X amount, as low as this percent. A lot of times what ends up happening is when you are not truly business bankable, you are going to be shocked by what comes back for an offer for a loan.

It is not uncommon for interest rates to be in the 20% to 23%. There are different ways where they do terms with business loans or even a lot of credits. It’s common to get daily payments, weekly payments, or bi-weekly payments in their terms instead of monthly. There’s a lot of variation in the world of business finance.

I’m sure for anyone tuning in to this, I wouldn’t be surprised if someone has a loan like that or had a loan like that. It’s very common, and they don’t know any better. They are thinking, “This is what I can get. I need it. I’m going to do it.” Business bankability means understanding how to position the overall entity. Making sure everything is updated correctly with our state, with Dun & Bradstreet, and all the different administrative type stuff. That’s important.

We need to make sure that we are operating in a way that shows less perceived risk. That’s building up a business credit history, as well as cashflow management. I spend time with my clients all the time on cashflow management because what they want to do are two things around this area. One, ideally, we want to show a certain amount of revenue coming in, and then we want there to be a specific gap between revenue and expenses. There’s a ratio in there. Lenders are going to look at that. The better that ratio is, the lower the perceived risk.

This is where we can leverage business credit cards with delayed spending to increase the gap between revenue and expenses. We are doing cash heavy on everything or a large purchase or whatever it might be that we could have put on a 0% business credit card and had a lower delayed spend over time to make sure we account to pay it off at the end of that term, 12 to 18 months usually.

These are the things that we can do to begin to position the overall entity to be truly business bankable and cross off the T’s and the I’s of what lenders look at in the world of business. That way, when you come to the table, you are going to command more respect in the way and they are going to be seeking your business versus you coming out for their handout. You become their ideal business client for lending. That’s the goal that I have with every one of my clients.

To be business bankable, what is that magic ratio between revenue and expenses?

It’s dependent on the type of loan. We could do this through loan calculators. We want to make sure that we have a ratio that allows for that payment to be made. An additional ratio and anything beyond that continues to lower the perceived risk. It is dependent on the loan amount, the type, and the amount of what that payment is.

Part of what I will do with my clients in the discovery phase is to get an idea of what type of credit and finance they need. In this more specific business loan right now, I will have an idea of if we get $50,000 at an 18-month term or 3-year term, whatever it is. We can map that out. I will have a pretty good idea in advance of what that payment will look like. If we have to make adjustments to their cashflow to meet those expectations in advance, we are going to do that. What we are doing in that respect as part of this program is we’re pre-underwriting before it hits underwriting. That’s what we are doing. Once you understand the world of underwriting in your business, you get it. That’s what we are doing.

Business Type

If you are a business owner and you are trying to decide what type of credit product is going to be right for your business, how much of an impact does your type of business have on making that decision?

That’s a phenomenal question and I imagine a lot of people don’t even think about this. I’m glad you asked that. Your type of business does matter when it comes to lending. In every industry, there’s something called NAICS coding. What that does is it puts your company and entity into a specific coding or bracket of type of business and a segment within that industry.

Lenders are all about perceived risk. They are going to monitor what’s going on with the economy. How are their loan portfolios performing? To give an example, for a long time, trucking was a strong industry and lending was very popular with trucking. They would extend a lot of great loan offers for people in the trucking business. That has changed around the post-COVID time. There are a lot of changes happening due to inflation and all the different things that have impacted trucking specifically. The default rates for trucking have gone up.

Therefore the specific coding of your business now has a larger perceived risk if you apply for something. Depending on the bank, they may simply decide they are no longer going to lend to this type of industry right now or what they might do is significantly reduce what they will extend to you to essentially build up a relationship to prove that you are going to be bankable and make your payments on time. There are a lot of different things.

This is more specific for someone who’s looking to start a business or maybe has an opportunity to make some tweaks to their business. We will evaluate if there are legal ways. That’s a big one. We don’t want to be deceptive. You’d be surprised by a lot of different coding out there. For instance, consulting. There are so many segments within consulting. Let’s say real estate.

Right now, if you are flagged as a realtor or broker, that’s considered high risk. Let’s say with your real estate business, you do consulting work and you can consult other realtors on how to improve their business to close more transactions. Technically, you have a right to state that you are a real estate consulting business. What you would do is change something more on a consulting segment within that code, but that’s just an example. This is where we can get more strategic where we do things right, but we are opening up the doors to have a better understanding of what’s available to us to leverage that to our advantage if that makes sense.

That makes a lot of sense. There’s a lot of complexity around your credit profiling and deciding what loans make sense for you based on where you are in your business. Most of our audience are existing long-term business owners. Some of them have experience in the world of business credit and some of them don’t have experience in the world of business credit. For me, it’s only been the last 2 or 4 years now that I understood what business credit was. I have been in business for 25 years.

Credit Or Capital

I was always leaning on my personal credit. Shifting over to business credit, it’s much different because now, the onus is on the company and the strength of the company and our revenue. One of the things I’d like to understand because credit doesn’t always solve the issue. How do you decide between going after credit or going after investment capital for your business when you are trying to take that next step forward in your growth path?

If I’m understanding correctly, there have been times when I’ve been working with clients. Let’s say they do have some credit challenges, but we are in a position. Let’s say they have been in business. We have great revenue. We have a nice ratio between revenue and expenses. It’s credit holding us back. There are lending opportunities that will be based on your revenue and look at other compensating factors that will impact the term and the interest rate associated with that loan.

This is what I do and my team does, our team of fourteen here in Credilife. We are not a typical transactional company. We are not like loan officers. We are not a finance broker only where it’s like, “I’m looking to close this loan and move on to the next one.” That’s not how we operate. We want to understand that if we are working with you, we can broker out all the deals on your behalf all day long. We do that.

We can broker all the financing and we can help you with all the leg work. We do all of that, but it’s important to have an understanding that if we are going to take advantage of this loan, is there going to be a realistic ROI and when will that be? In the meantime between that estimated timeline, does the company have the ability to sustain that payment?

This is one area that I feel is overlooked greatly by a lot of people. They may be in a position where it’s like, “I’m growing crazy. I know I need to fix this, but I need money now.” I know this happens all the time. The thing is if you go about it, they are operating off of emotion there. They know they need something but they maybe haven’t taken a little extra step to better design, “If I can get this, how am I going to use the funds? Do I feel comfortable that we can weather this? We can handle this for 3 to 6 months. These payments are going to be golden. We can do this.”

That’s a big part of what we do. We bring clarity to that side of it, that use of funds. Once again, if we know that they can do that, we can always go back and address the credit. We can always go back and do these things so that in the future when we refinance, we are going to get better terms and open up that whole door for them.

Hopefully, that answers what you are looking for. There are ways. I never want to put someone in a bad position. I don’t want to be someone that advises them to do something. They come back and say, “This loan is crushing me right now,” because I have had conversations when they reached out to me, and then referred to me. It wasn’t me that put them on that loan, but that’s what they told me. “This loan is crushing me and my business right now.” I have learned from that over the years that it’s like, “This industry deserves more of a holistic consultative approach,” and that’s what I’m delivering right there.

Three Credit Packs

You did answer the question because what I would like our audience to understand is that there are options especially if you have a business that has great revenue, and you can’t sustain those payments versus it being on your credit at that point in time. No matter what, you need to make sure you have a healthy credit profile personally and from a business standpoint. We go into the rapid-fire section. Give us three credit hacks that we can do as business owners to start building our business credit.

The first one we have to do for personal because it’s going to impact the business. We talked about it before. This is very important. Pull your credit report. Go to IdentityIQ.com. It’s $20 to pull it. It’s not a hard inquiry. You are going to get your FICO 8 scores. Hold that. Hold up the report. The first thing you are going to do is look at your credit cards, and identify what the reporting balance was and what the limit is.

Within your financial means, pay that down to the magic number of 3%. That’s 3% of the limit. If it’s $1,000, pay it down to $30. As soon as that updates, you are going to see a significant boost in your scores. Even if you are already at 680-plus and you have higher ratios, I’m telling you right now, you are probably 720-plus. That boost is huge.

What they can do as the next step is to identify local regional banks in their area. There are a lot of benefits to working with a regional bank in your area. If you think about it for large institutions, you are just a number in most cases. Unless you are slinging big money, you are typically just a number. Wells Fargo, you are probably just a number to them. Whereas if you go to regional banks, they operate differently. They have a lesser pool to work with. They pride themselves on relationships. It’s going to be a different experience for you.

With that, they have a lot of strong business and small business tailored options. What I would say there is identify a regional bank and open up ideally a 0% business credit card. The reason why I say 0% it’s very common right now. They will do a promotion where they will do an introductory period at 0% interest, typically, 12 to 18 months is the most common. What you then want to do is use that. Identify accounts that you can begin to use that card for those expenses. You improved that cashflow. It’s what we talked about at 0% delayed spend and now we are starting to build up some history. The final piece that I would say, depending on the type of business that you are in, is to look at what’s called trade lines.

This would only be if there’s a benefit to your business. Maybe you are in construction. Maybe you have an office. Anything where you can identify a company that offers business trade lines. Extend your business credit like a line of credit to purchase from them. Home Depot, Sherwin-Williams, Quill, and Amazon have it. There are a lot of companies out there that have that. What you can do is identify something that has a positive impact on your business while also building up history and that’s a win-win. Those are three things that you could do right away to start improving your overall position.

Rapid-Fire Section

You gave us some incredible information. Now we are going to go into the rapid-fire section. Quick answers. Rabbit or turtle?

Rabbit.

Coffee or tea?

Coffee.

If it is a zombie apocalypse, you have got to get out of the house to protect your family. What is the weapon that you were grabbing?

A sword.

I see you as a Viking anyway.

I got the Ragnar beard out. I’m going to protect my family.

One of the number one business books that you recommend.

There are so many. I hope I’m not betraying the name, but I read it about a few months ago. It’s around curating an ultimate offer. That book was amazing to me. It’s that gentleman that’s very big on YouTube. I enjoy his work. That has been extremely beneficial for me because it’s important in the world of sales that your messaging and how you position yourself appeals to the audience you are looking for obviously with the best intention, and how that works.

If you could choose anyone, dead or alive, to have dinner with this evening, who would it be?

I’m sure people are looking for some significant figure but quite honestly, it would be my grandfather Clyde, my dad’s father. The reason is I didn’t get an opportunity to get to know him very well when I was young. He was a prisoner of war. He has a lot of history. He was a big figure in our family and my dad. I wish I had an opportunity to get to know him, and what he went through. I feel like that session with him would be amazing. That’s who I chose, my grandpa Clyde.

What is something in your industry that you truly feel needs to be changed?

In the world of personal credit, there need to be companies that no longer only provide credit repair services, meaning the letters. That is the biggest issue because a lot of people feel like that itself is the solution when in fact, it’s not. It’s a part of the solution. To me, it’s misleading. That needs to be changed. Why don’t we do that? We do everything. In the world of business, what I would like to see changed is more transparency and marketing of specific loans or business loans. They need to be more transparent about providing a credit score bracket in a range that they could expect. That way, people have a better understanding of where they are at and if they should pull the trigger on something that needs to change.

If I walk through your front door and you are a business owner who’s doing $10 million in revenue on an annual basis and I’d give you a $300,000 check, how would you advise that business owner to invest that $300,000 to double their profits over the next twelve months?

The very first step there would be identifying exactly how they make their money. Identifying areas where they are leaving money on the table. I like to start there first because it’s common that we don’t have to invest a lot of money into fixing that. That could be done through software solutions, training of the team, or whatever that might be. Let’s figure out where money is being left on the table, and then from there, understand what the growth needs to be and invest in opportunities to create more prospects or conversions or more sales, depending on the type of business. That is the first thing that I would be looking at.

The last question and the most important question. What is the biggest obstacle that you had to overcome in your life or your business to become and build the success that you have now?

I have gone through a lot and it’s never a pity party. I have experienced my ups and downs in this business. Post-COVID was when we experienced a significant negative impact on our business because we are so closely aligned with what’s happening in the world of mortgage, real estate, and finance. When interest rates shot up as they did and inflation went up, we felt that negative impact severely as an organization. That forced me to make decisions.

I had to make tough decisions that I didn’t want to make from layoffs. I had to evaluate my personal lifestyle situation, which I advise people to do all the time. I did it myself. I had to make sacrifices to make sure that I was in a position to take care of my family and cut back where necessary to then make sure I was reinvesting into my business to be resilient and weather that storm. From there, we had to be creative on how we could get in front of the right audience even though it was a little bit more difficult. We knew we had to make these adjustments and we had to create more awareness around what separates us and what people are looking for.

That was the biggest hurdle that I have experienced. Credilife is the first business I ever started ten years ago and we are still going. I’m not too proud to admit that I’m constantly learning, so I lean on others to learn. I lean on experience, and those experiences help shape you. Whether for better or worse, it’s about your mindset and how you approach it. That was the biggest obstacle that I overcame.

Episode Wrap-up

Jerrad Havins, please tell the audience how they can connect with you.

You could go to Credilife.com. That’s our main company website. You can reach out to me and my organization there. My personal site is Jerrad360.com. You can reach out to me directly. We are going to be giving away something nice here. We have a cool solution that you can take advantage of at no cost. It does allow you as a business owner to put in some specific data points that we want to better understand where you are at. We generate what’s called a report card for you where we will help you identify things like, “Here are areas that I’m strong. Here’s areas that need work.” In addition to that, we can break down different segments of different types of financing and if you meet pre-approval guidelines right now, or if you don’t. It’s a nice starting point to get people some clarity. I know we are going to be including that for everyone to take advantage of.

Jerrad Havins, thank you for joining us on the show.

Thank you so much.

Important Links

• Credilife
• Jerrad360.com
• https://bankable.credilife.com/prequalificationtest/prequalificationteststep1.aspx

About Jerrad Havins

Jerrad Havins is the CEO of Credilife, a Financial Wellness Company, and a certified FICO professional. With over a decade of experience, Jerrad has worked with thousands of individuals across the U.S., helping them improve their FICO scores, reduce debt, repair credit, and build business credit. He specializes in guiding people on leveraging FICO scores to access the best financing options, whether for personal or business growth.