How to Use Business Credit to Build Your Credit Repair Business - Ty Crandall

Our guest today is Ty Crandall, and he is the leading authority on business credit. And he's going to share with us some easy ways for you to build up your own business credit and generate extra revenue for your credit repair business.

So the big question is, how can we take our passion for helping people with their credit and turn it into a successful business without taking loans, without spending a fortune by bootstrapping it from nothing so we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets.

Hey, credit heroes. I'm so excited. Our guest today is Ty Crandall. He's the CEO of Credit Suite. He is the authority in business credit building, business credit scoring, and business finance financing. He's also the author of two very popular books, Perfect Credit and Business Credit Decoded. He is a frequent contributor on radio and television and magazines like Entrepreneur Inc. And Forbes, and he's spoken at every single credit repair expo. And today, he's going to give you some amazing insights and ways that you can build business credit and generate additional revenue and cash for your credit repair business. So please welcome to the podcast Ty Crandall. Hey, Ty.

Hey, yo. Thanks for having me on. I'm excited to be here.

I'm excited you're here, too. How's the quarantine going for you?

It's going okay. I mean, what? A lot of people don't know that I'm an introvert. I really like to kind of be left to my own accord. So this has been perfect for introverts because everybody has to stay like six feet away from me and we all stay inside. So I'm loving it. I'm not having any problems at all.

And it's the perfect time to have a business that you can run from home.

Yeah. So, yeah, I have two offices, but I usually prefer to work from home. I tend to get more done here without all the distractions that are pretty typical in an office.

I hear you. So I'm really excited and I do consider you to be the authority on business credit. Before we get started, I want to know, how did you get into all this? What's the backstory?

Well, it's pretty interesting. I owned a mortgage company. It was the first business I ever started, and I own that at the height of the mortgage industry and also when that entire industry collapsed, you know, in the early 2000s. So I was in the wrong place at the wrong time, and that pushed me almost to the verge of personal bankruptcy. Because I guaranteed a lot of things in my business and made a lot of the same mistakes I think a lot of entrepreneurs make. So then I would get into credit repair would be the next industry I get into. We did a lot of credit repair to help our customers actually improve their credit so they can get home loans. So something I knew and knew a lot of people were going to suffer with credit issues as a result of that. So we built. I started building a credit repair company, made it very successful. And as we got bigger, more and more of our customers asked us about business credit. And again and again and again, as more people asked, I thought, at some point, I have to kind of look into what this is and how it works. But at the time, there just really wasn't information readily available online or YouTube or on Google. You just couldn't find it. So I dove and I dove and I dove, and I finally started to discover what business credit was and the separation of consumer and commercial credit, how there was a whole other world in commercial credit reports and scores that's different than consumer. And I just became really frustrated because the reality is, if I would have known, known that it could have saved me the almost personal bankruptcy on the personal side going through the mortgage industry. So at that point, I started in real time just teaching, you know, learning what I needed to learn about Dun and Bradstreet and everything that was involved. And then I just started teaching it. I would just do these webinars and sometimes nobody would show up. I remember there would be nobody there. It would just be me talking to myself. And then I would put the video up on YouTube and many months later, I would look and realize that a lot of people were following and a lot of people had that same interest. So I. We kind of created a way to offer business credit and then went to all my friends that were in the credit repair space, because we all had a pretty big network, we were all pretty close to each other. I said, hey, could you guys benefit from, like, a way to sell business credit to your customers? Because that's what I'm getting ready to. They all say yes. So then I started a partner program and started helping them get the ability to offer business credit financing. And that's really how Credit Suite was originally founded.

Wow, that's so cool. See, I know very little about business credit. People are always asking me about it, and here on the show, even, we're usually just talking about consumer credit. What exactly is business credit?

Well, it's very similar to Consumer credit, it's just for a business. So consumer credit, you know, consumer comes in and builds a credit report score for their Social Security number and they use it to qualify for mortgages and car loans and everything else. It's exactly the same thing in the business world. A business has a credit profile and score that's built to its business ein, that's separate from the owner social. And then the business can actually start building a credit report score. And as it starts to establish credit, then it starts to be able to qualify for credit without a personal guarantee and credit check. So it's kind of a way for the business to fund itself. It's building its own credit profile and score. Then it uses that established credit profile and score to start qualifying for high limit revolving accounts. Then the owner doesn't need to provide a social, doesn't need to provide a personal guarantee, doesn't need to provide a personal credit check or a personal credit check inquiry on the credit report. And then the actual lenders and credit issuers are making decisions based on the business credit quality or, or the business's ability to pay its bills and not linked to the actual owner's ability to pay the bills because the owner's credit is not even looked at.

Amazing. And can any business do this?

Yeah. And that's the interesting thing is that, you know, there's this myth that only large companies could build business credit. And the reason that I found that that has happened is because, you know, when companies get so large, they get controllers, they get CFOs, they get very financial savvy people in the organizations, those people know about commercial credit, they know about business credit. So they get involved and they start helping the owner understand and separate the personal liability and start to establish that corporate credit profiles. But small businesses just don't know this. I mean, most of us, you know, we're not trained this in high school, we're not trained this in colleges. Business schools don't really teach a lot of this either. So the reality is most business owners, over 90% per entrepreneur, they just don't even know what business credit is. They don't know that it's available, they never know the steps to take it. But the reality is the small companies, even startups, can take the exact same steps to follow that big companies take to build business credit and can start getting, you know, approvals immediately and start getting revolving credit a couple months into the process if they follow a very set series of steps to do so.

So what are the steps to start a business credit Profile and score.

Well, the first step that I say is that it's a step you should take before you do any kind of credit and financing. And that is to kind of get your, what we call fundability in line. So we found there's over 125 factors that tie into what we call fundability, which is your ability to get funding from the actual credit markets, from the actual lenders that lend money. And so things like having your name set up where it's not high risk, making sure that you have the right NAICS or industry code for your industry, making sure that you have a business address or preferably a virtual address or a home address as last resort, but staying away from, you know, UPS addresses and PO Box addresses, having a business phone, making sure it's toll free, making sure it's listed with 41 1. Making sure you have a professional website and a professional email address, not an AOL or Gmail address, having any necessary licenses that you need or any bonding that's required for your business that you make sure that you have. The way I best explain it is that, you know, we can go on for hours about all the things you should set up, but when you fill out an online item on an application for creditor financing, you have to just make sure that the information you're entering reflects that you're a credible business. If you have a home address, well, it doesn't make you look as credible as having a real physical business address. If you have a mobile phone that you're using as your business phone, not as credible as a business phone. So it's just making sure that all these factors are in line and most importantly, that everything you're putting on the application is the same everywhere online. Your name, your address, your phone number should be the same on Secretary of State as it is on your website. The same on your website as it is in Facebook, the same on Facebook as it is in Yelp. And the business credit world reporting agencies like Dun and Bradstreet, they use yellow pages, they use Yelp, they use your Facebook page to gather all of this information. And then if they see discrepancies, it oftentimes results in all kinds of issues, especially getting you turned down for credit financing. As a matter of fact, surprisingly, one of the number one reasons that people get denied is that the information of putting on the application can't be verified. The Secretary of State, it's off. So when the lender credit issuer just does a basic check to make sure the application is not fraudulent Then they can't even verify the business exists because the information doesn't match Secretary of State as the application. So many other steps, but that's the first step is really getting that fundability in line.

Got it. And now in our case, we're an S corporation. I know a lot of people in credit repair are also an llc. Does it matter what kind of entity structure you have for building?

It doesn't matter entity structure, but it does make you look more credible if you're an llc, if you're a corporation, or if you're a partnership, you, sole proprietorships are really not looked at as credible. So when you're setting up that fundability, that's one of the initial things that you want to do is make sure that you have an entity type that reflects that you're a legitimate business. Also getting an ein, you know, if you're a sole prop, you don't actually even need an ein. But business credit is established for your ein. That ties into credibility. And you also should get your DUNS number. You know, you can go to creditsuite.com duns we put a quick link to go right to the page you fill out to get Your duns number 100% free from dun and Bradstreet. Gives you a lot of credibility. And that also is a fundability item because it's going to be looked at when you get to the initial steps of building business credit with vendor accounts.

Got it. And what are the other credit bureaus that are pertinent to business credit?

Well, in the business credit reporting agency, you're ultimately going to build credit with Dun and Bradstreet, Equifax and experience. So when you're setting up your business, you want to first make sure that you set up all that fundability. Then you want to get that DUNS number from Dun and Bradstreet. Now that's interesting in the business world because Dun and Bradstreet, you need a DUNS number and you need three accounts reporting to them to create a credit profile score. But what's interesting is Equifax and Experian, if they know your name of your business, they know your address and they know your industry code of your NAICS code, they will automatically create a credit report for you and give you a failing score just because they deem you to be high risk because you have no credit. So very different than the consumer world. You know, once they know you exist, which they typically get that information from, Secretary of state when you file annual reports, then they Immediately create a credit profile and score. We talked to a lot of people that are then, you know, perplexed or completely confused that they're getting denied for financing because of bad business credit. But it's only because they have no business credit. So the Dun and Bradstreet, Experian and Equifax commercial, you got to be careful because with Equifax and Experian, they will populate that credit report even if you have no credit and give you that failing score.

Wow. Now with business credit cards, are the credit issuers and credit limits similar to what you'd see in the consumer world?

Somewhat. So when we go through the steps of building business credit, we really talked about the first step of fundability. You know, the next thing that you really want to do is you want to start getting credit accounts that report to the business credit reporting agencies to establish initial credit. And once you start to do this and follow this path, you're typically per SBA looking at limits about 10 to 100 times what you would actually be able to find with consumer credit. So way higher limits. Interest rates are very similar. But the first key is that once you build that fundability, we've got to establish that initial credit profile and score. And that's typically done through two different ways. There's what we call a credit line hybrid. So these are credit lines where you can get up to $150,000. They're no DOC, they do require a personal guarantee and credit check. But these are credit lines you can actually get right out the bat that report to the business credit reporting agen. Now those are really nice if you have 680 FICO scores or a guarantor that does. But there's also vendor credit, if you don't have those, that can actually help you. And this is credit with places like Uline and Quill and Granger Strategic Network Solution. So what's interesting about these vendors is they'll give you credit when you have none. They don't require credit checks, they don't require guarantees. So there's two different ways you can establish initial business credit. But either way you go, once you establish that initial business credit, get about five accounts, Daniel. Then you can start to get to the next level, which is getting these high limit accounts that we just talked about where you're getting 10 to 100 times higher than what you normally find on consumer credit, staples, Home Depot, all those type of accounts. And then the more credit you get, the more credit becomes available. You start to get credit at stores and you get fleet credit for, you know, transportation needs and fuel and maintenance of vehicles, things like that. Then you get to Visa cards and mastercards and auto financing without personal credit checks and guarantees. So you kind of start to get the feel for a credit repair organization like I had huge benefit because while I'm fixing their personal credit, I'm coming in and getting them 10, $20,000 individual limit credit cards, something they never thought was possible because they were getting $500 limits because of their damaged credit. But once we started to build a credit profile and score for their business, accessing those high limit accounts became of extreme value to them and a heck of an additional benefit.

Wow. How long does it take to build up your business credit profile like you're talking about?

Well, the interesting thing like consumer credit, right, is there is no end. You know, there's no end to how much credit somebody can obtain. But you start to get credit immediately. Once you build those fundability items, you can start to get those credit lines or that vendor credit immediately. The minute that you built that fundability, make sure that your business is set up legitimate where you can get the most amount of money. Then once those accounts report, which takes about 30 to 60 days, then you start to get to revolving store credit cards, Staples, Home Depot, Lowe's, Sam's Club, Costco, Nordstrom, Macy. I mean, almost every, you know, Amazon, Apple, almost every major retailer offers those kind of cards. And then when you get about 8 of those total accounts, another 30 days to 60 days, then you start to get the fleet credit, fuel cards and auto repairs, maintenance. Then another 30 to 60 days, you get to the final tier, which are Visa cards, MasterCards, auto finance. So we like to say if you're doing this on your own, you could spend two, three years kind of going through and figuring out the process. But our clients get it done in about six months there to the very final tier, a Visa card, MasterCard, auto financing, all without the personal guarantee and without the personal credit check. And part of the reason that happens is because business credit scores are how you pay your bills. So as long as you get credit, pay your bills responsibly, that gives you good scores. And then you use those scores and that profile to springboard off of to then start qualifying for more and more credit. The more qualify and the more you get and use, the more you credit, you get beyond that.

Got it. Now, what about somebody who doesn't have a business yet? Are there loans available for people to start a business?

Sure. I mean, first of all, if you don't have a business yet, then you're going to be looking at personal funding. And there's things like peer to peer lending with lending club that are great options to do. So now you're going to, you know, you might want to use the money for some other things because they're going to ask you if it's substantial a business and they have separate funding for the purpose of businesses. But the credit line hybrid program that I actually mentioned, for example, if you have a 680FICO or a guarantor that does, you know, the minute you start that business and have the ein, you're able to then come in and get up to 150,000 on those credit lines. The other thing is maybe you have some kind of assets or collateral that you could use to be able to get financing as well. So there's business financing that taps into the equity of your home. There's business financing that taps into 401k stocks, securities, you know, bonds, IRAs, where you can use those as collateral, whether it be yours or somebody else's. And you can use those as collateral to then actually use to actually get financing. So those are pledged as assets that serves as collateral for the financing. Credit doesn't matter, cash flow doesn't matter. And somebody is able to come in and get 5,6% interest rates based only on the collateral. So if somebody has some kind of collateral or good credit, then they're able to get the financing need to get the business off the ground. And then once the business is off the ground, they could use their cash flow to qualify for even more financing, even if their credit isn't good.

Got it. Now, who can see a business credit report? Is it just the business owner?

Well, that's very interesting question because you know, you and I from the space I come from, the space that you're in, we're very used to the Fair Credit Reporting act. And the Fair Credit Reporting act gives us all kinds of rights. But what's interesting is that there is no Fair Credit Reporting act in the business world. So disputes in the business credit world can be very profitable for anybody doing business credit repair. Because again, you know, what happens is there is no set process out there. So people sometimes pay thousands of dollars just to get one or two items off their actual credit report. But again, what happens is with no Fair Credit Reporting act, that means that anybody can pull your credit, nobody needs your permission. It's publicly accessible information. So your business credit reports can be accessed by your clients, they can be accessed by your Competitors, they can be accessed by your prospects, by your employees for that matter. And that means anybody that wants to can see how you pay your bills, how late you are, your days beyond terms, how much credit you have, how many credit lines you have, how many employees, your revenue of your business. A lot of people think that this is not public records. Matter of fact, with these SBA PPP loans that came out as a result of coronavirus, what happened was people were shocked that it would be public information that they got these loans. But people are really shocked at how much information is linked to their ein, including their commercial credit reports that's 100% publicly accessible. So the Fair Credit Reporting act, you know, actually covers consumer credit, it doesn't cover commercial credit. So what that means is regulations, for example, such as the fact that somebody has to have permissible purpose or your permission to pull your consumer credit report doesn't apply in the business world. So that means competitors, prospects, clients, anybody that wants to actually has the ability to access your business credit reports because it's publicly accessible information.

How easily would it be for a credit repair company to be able to offer business credit repair services?

Well, I think we try to make it really easy. You know, initially, as I mentioned in the beginning, you know, Credit Suite was founded because we actually created a way for credit repair organizations to actually offer business credit. That was our foundation. As a matter of fact, for years we wouldn't even let people come to us to build business credit. You could only come to us to be a partner to offer business credit and financing. So, you know, we built our entire platform around a back office, the training, everything that anybody needs to actually succeed with offering business credit financing. But I'm the kind of guy that I think everybody should be able to have a free option as well. So we have a lot of free training on our YouTube channel, which is YouTube.com credit suite, that teaches anybody how business credit works, how the process works, how to get vendor accounts, how to get revolving accounts, how credit repair organizations can offer it as well. And we also have a great free guide that we'll talk about here as we wrap up that secrets that a credit repair organization should know as well. So we have a lot of free information that you can use and kind of figure it out as you go. And then on the other end, we're there to help you service where you can actually offer it through our affiliate program, which is free, or a partner program where we do all the work for you. So either way you have some good options to be able to offer it as a service.

That's awesome. So essentially through this credit repair, business owner can build additional revenue by offering these services that you have very much.

I mean, it's interesting because Daniel, when I think about getting started in credit repair and this was before, you know, we really had the availability of software like yours that makes so simple to be able to do the process. And before we had events like credit repair expo where you could actually go and talk to other people and like shoulder up with them and make friends and create your own masterminds. You know, before any of those things, I remember just trying to desperately find products and services that our customers need. Because I understand that one of the best ways to grow a business is to actually come in and offer products and offer services to them multiple times. The more product and services you can offer, then that way you can have one customer, one cost of acquisition for that customer, and you can monetize that customer many different ways. As a matter of fact, that's how I again got into business credit. What happened was our credit repair customers were so happy, they kind of went through this. I don't think this will work. Then they got results on call, freaking out, they were so happy and then they're like, what else can you help with? I think that there's a problem in this world where people want to work with people they trust. And if they find somebody they trust, I desperately hope that person can help them with multiple things because then they don't have to go find somebody else in that area to help them. So I was always remember looking for a lot of products and services to offer. Now I love the CROs have so many different options of the additional upsells and cross sells they can help their customers with. From credit cards that help them build business credit, to credit monitoring, to so many other things, to student loan for gifts, you know, so business credits another one of those products and services. What we find and a large amount of partners of ours are credit repair companies, hundreds of our partners or credit repair companies. And what we found is that when you ask your customer base how many of them own a business or want to start one, you'll typically find that about 25% of your actual client base has a business or wants to start a business. And so it's really easy segue to say, look, do you have enough money to get that business off the ground or do you have enough money to run your business? Of which they'll often say no. And then it's very easy to get into a conversation to say, hey, look, we're fixing your consumer credit. Here's how business credit works. And you know, in the same six months that we can see dramatic results in your consumer credit report, we can come in and establish an entire business credit report score for you. And unlike consumer credit, you're able to come and start getting 10,000, $5,000 limits very quickly. So in that same six month timeframe, you're able to help somebody fix a credit and then you're also able to help somebody establish a business credit profile score, potentially get 50,000 or considerably more in revolving credit not attached to their personal guarantee, not didn't require a personal credit check. So it's kind of funny, they came to you to fix personal credit and then they leave with an established business credit. And we also found that that's really helpful for referrals. You know, a lot of people didn't want to refer customers when credit repair because it was embarrassing for them to admit to other people around them that they had credit issues. But when we didn't help them with business credit as well, it radically increased our referrals because they would refer us for business credit, but they would be, you know, embarrassed on the consumer credit side. So it was very easy to offer and it was also very easy to be able to give my service more value than competitors because I'm helping them build business credit. They're talking to other credit repair companies that did it and it gave me a huge advantage there as well. So just a lot of benefits, something easy to sell, and it makes it a lot easier to sell credit repair, I think as well, we could talk about some of that. But when you cross sell both services, that's how my business became really successful. And I ended up exiting less than a year after I incorporated business credit just because we had such substantial growth. When we added that to our product line for the credit repair organization.

Wow, that's so incredible. And it is a great service people can provide. I. I actually consider you to be one of the most successful people that I know that I've ever met. And because of that, I want to ask you some just general entrepreneurship questions. Is that okay?

I love that. I appreciate that. I'm very flattered and honored that you say that. So sure, I'd love to.

Great. I think this will help our audience. If you could go back in time. What do you know now that you wish you knew when you first started.

First start a credit suite or started in business in general?

Either way.

Business in general.

Yeah.

The one thing I would say is that it really comes down to education. When I owned my mortgage company, I was in business to make money. When I started my credit repair company, I legitimately was in business to help people because I had experienced a very deep personal hardship that shocked me to my bones. And when I made that transition and started just willingly giving out information, teaching, educating, genuinely wanting to help, it made me, made my success. It was completely unintentional. And so I really believe that. I think that anybody in business right now needs to dedicate themselves and be selfless and they need to teach people how to do the things they do. You need to teach, you need to educate. If you're going to be in credit repair, you should go teach people how to fix their own credit. Some people will want to come to you for the paid service and by giving them so much information, they'll see you as the expert authority. You'll build trust and rapport, and other people will use your free information and do it on their own. But you can't lose because those people become your best testimonials. Those are the people when somebody complains online or says something out of sorts, those are the people that run to your defense online. So I just think you have to be selfless. You have to give, you have to teach, you have to educate. And if you do those things, then the business, the money, the success, everything follows. But it really comes from being selfless and just genuinely trying to help people reach the goal that your company is out there to help them obtain.

That's really, really good advice. Hey, Ty, how can someone learn more about your business credit programs and your resources? And I know you've got these six business credit secrets that every credit repair company should know. How can they find this?

If you go to creditsuite.com CRC creditsuite.com CRC we have a link where you can download the six business credit secrets that every credit repair company should know. And there's a lot of interesting things in this guide because it kind of tells you things in the credit repair world where we're actually governed versus business credit where they're not. Some things they can do and some interesting ways that you can use business credit to actually grow your credit repair organization. So a lot of good things in that guide. It's a creditsuite.com forward/CRC.

Yes, creditsuite.com CRC this has been so awesome. I want to thank you for being here, Ty. You're amazing. And you guys out there, I hope you're enjoying this podcast. If you are, please click below to subscribe so you don't miss out on any episodes. And be sure to rate and review us so we can move up the charts. And thanks again for being here. Ty. You're incredible.

Thanks for having me. Thanks everybody.

Have a great day. You guys. Keep changing lives.

Want a fast track to creating an amazing business that helps people, changes lives, and makes you a great living in the process? Then I'd like to invite you to my free online training@creditrepaircloud.com freetraining in this free training, you will learn how to get clients willing to pay you even if you're just starting out, how to get easy credit repair results without being an expert, and how to get all the clients you'll ever need without paying for advertising. Again, this training is absolutely free. Just visit creditrepaircloud.com freetraining.