Give Your Child a 700 Credit Score

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2:34Wasabi, driving innovation in data storage for up to 80 % less than market competition. Try for free at wasabi.com. Wasabi Hot Cloud Storage, proud partner of iHeart Podcast Network. I'm thinking in my mind, right? We got a lot of people, and it's like as soon as you get to college, you know, in the Marines, they sent you those right before you went off. But in college, they're giving you credit cards right off the rip. Is this something that young entrepreneurs could actually take advantage of? No, I would say as soon as you're 18, to let you know, I'm trying to change the way that people think of credit and start applying for credit.

3:09So if parents start adding their kids at 16, when they're 18, they already have a$750,$800. Yeah, talk about that. I saw that on Instagram. You was like 16. Yeah. Can you explain that? Yep. So, because it kind of goes in hand with your question. So, it's like, if you have kids that are under 18 and at least 16, you can add them to your credit card. Just like how, I think we say your grandmother, right? My mom. Your mom. Your mom added you to your card. Yeah. At 18. And you got all that history. But if she would have added you at 16, when you turned 18, now you have at least two years of an active credit report.

3:45Because this is the thing. your credit report doesn't exist until something happens on there your credit report just you're eight years old you don't have a credit report you know what i mean so if you're 16 and your parents add your mom and dad each add you to a credit card that should be the birthday gift hey let me add you to a credit card give it to you start learning how to use it you know i mean now when you become 18 now you can get your own american express your own thing now you don't need these and what else don't you need trade lines because what a lot of people the reason once again, I'm going to talk about trade lines a lot.

4:15Not a big fan. You know what I mean? Because people use trade lines because they want the history and the limits. So start at a younger age. So now when you're 18, you already know, now I don't need those trade lines. I already got my own credit cards. And now you're just starting it to where when you're in college, now your parents are going to open up an LLC for you, open up this, do whatever. And now you can use your own credit. You don't have to have a cosigner for a car, for an apartment, for anything. And now we're changing the trajectory of when people apply, but how they apply, and more importantly, why they apply.

4:47Yeah, parents, be responsible. That's my goal. Be responsible with your credit, because like you said, this could definitely help your children. Yep. So let me ask you this. All right. So business credit. Let's get into this. What are the steps? I know I wrote down some notes. So you have to have a legit business, obviously, tax ID. So can you explain the difference between business credit, personal credit, and then I guess it's a hybrid situation. Like you said, Amex is technically is not full business credit because they still use your personal guarantee. So what is the difference between like the Amex situation where you still got to have a personal guarantee and just full fledged business credit?

5:26Yep. So, you know, your personal credit, you use your social, right? Social security number. When you start a business, you get, you know, whether it's an LLC, a C Corp, S Corp, whatever the case is, you start a business and you get your tax ID. Now you're actually a business. And I want people to understand that because a lot of people think when they have a sole proprietorship, but they have a business, they really don't because you're still using your social. So you have to get a tax ID. And once you start building business credit, depending on what you're going for, you're going to have to use your personal credit, right?

6:00So there's a difference between co-signing a personal guarantee, which you guys spoke about before, you know, if you're personally guaranteeing something, you're using that to kind of like get approved for it, right? So with a personal guarantee on an American Express credit card, for instance, unless you're like a major corporation like Facebook, Walmart, whatever the case is, you're not getting American Express without using your social, even though you have your tax ID too. Now you're using your personal credit as leverage to ultimately get that American Express, the Chase, and everything else.

6:31So the reason why I say it's not true business credit, even though it does report to Experian business, is that you still got to use your personal credit for it, which is not bad. But in the event that you default, like you don't pay it and it gets charged off, now it gets reported to your personal credit. If you default on the business card, it goes back to... Yeah, so if you have an American Express and you don't pay it for a certain amount of time and it gets charged off, now that business credit card is not going to show up as a late payment. it's going to go straight to charge off status.

7:00And now you're going to go from having a 720 credit score to now having a$20 ,000,$30 ,000 charge off American express credit card from the business. And to get that off, you got to, you know, you got to pay it. You know what I mean? You don't want to evade that debt because now it's tied to your business. You know what I mean? To get a true business credit card or anything with business credit is by not having to use your social and just by using your tax id and maybe your dun and brad street which i know we're gonna we're gonna cover you know i mean so that's true business credit is not using your your social security number your date of birth your name anything and all you're using is got credit your tax id your ein i mean your your address business you know business email business phone number and that's it you know i mean that's the true business credit but when american express with Chase, you know, those credit cards, you're still going to have to use it, even though it's still going to report to your business credit.

7:55Got you, got you. So you spoke about DMV. Can you explain what it is, why it's so important, and why people, especially in business, to know their number? Yep. So Dun & Bradstreet is another, like, I guess you can say social. So notice for personal credit, all you have is one. For business credit, there's like multiple things you got to do to establish business credit. It's not easy. So Dun & Bradstreet is kind of like the biggest business credit reporting agency out there. And if you're trying to get like a car, if you're trying to get like net 30 accounts, if you're trying to get things like American Express, they all check Dun & Bradstreet and they give you what's called a Duns number.

8:33So if you want to just create a Duns number, you just go to Dun & Bradstreet's website. It's free. Doesn't cost you anything. You shouldn't be paying anybody to get you a Dun & Bradstreet number, it's free. So now what it is, is people will report what you're doing to Dun & Bradstreet because they have to house that information somewhere. So that way, if you want to get a car, if you want to get something in the future and eventually not use a personal guarantee, that's what they're going to check. You're Dun & Bradstreet credit report. You know what I mean? So they're logging the data. Right.

9:05They're logging the data. So it's like now your American Express is not being reported to Dun & Bradstreet. That was being reported to Experian business. So it's, you know, So there's Equifax business, Experian business, and Dun & Bradstreet. Just like how with the three, there's Experian, TransUnion, and Equifax. So there's three with this one. And there's even more, but those are the main three. You know what I mean? So now with Dun & Bradstreet, now you're also given a number. That now when you apply for something on a business card, they're like, what's your Dun's number? And a lot of people don't know that.

9:33Like, what are you even talking about? So now they go to Dun & Bradstreet's number, they got to buy one, and then they try to sell them this crazy software, this crazy monitoring, and they don't need that. You know what I mean? So eventually, once you start building business credit, all you got to apply for is with your business name, your tax ID, and you've done in Bradstreet, and it doesn't get reported anywhere. God forbid you default on it, you're protecting your personal credit. So if I want to get a business credit card without personal guarantee, where would I go to for that? So it depends on what type of business credit card you're trying to get.

10:06because a lot of, especially if you're in business under two years, you're not going to get it because you haven't built history. So you got to use a personal guarantee. Right. There might be some, you know, there's like, um, you know, once you start building revenue and you start, you can show tax returns and you can show IDs, like there's some local credit unions that you can get, um, a business credit card without it. Um, and then there's also like some other business, like, um, like a gas card, right? So this is one of the things that we tell people is a gas card actually has a lot of value in it because you can get an american i mean a visa or a mastercard business credit card that you don't have to put your social on it yeah you know what i mean and those visa mastercard business credit cards are powerful because yeah it's tied to a gas station but it's a visa mastercard so now what you're doing is you're building your visa mastercard business credit so that way you could eventually get a credit card without it.

10:59Yeah, a wise woman spoke to us about gas cards. Shout out to Ms. Business. Gas cards are the hidden secret of business credit. My graduates from my school being Forbes. Bag drop. Bag drop. F*** a mic drop. Bag drop. Bag drop.

11:27Ernest, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partnered with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower personal dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals, and more. You've worked hard for your money. Now make sure it's working hard for you. Download the Empower personal dashboard or visit Empower.com. Not an Empower client paid or sponsored.

12:04If your best finance people are doing expense reports, chasing receipts, or spending time on month-end close, it's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. Ryan Reynolds here from Mint Mobile, with a message for everyone paying big wireless way too much. please for the love of everything good in this world stop with mint you can get premium wireless for just 15 a month of course if you enjoy overpaying no judgments but that's weird okay one judgment anyway give it a try at mintmobile.com slash switch up front payment of 45 for three-month plan equivalent to 15 per month required intro rate first three months only then full price plan options available taxes and fees extra see full terms at mintmobile.com earners what's up look let's face it most guys just power through pain and strains but the smart move is taking action early before it turns into something bigger that's where a physical therapist comes in they can assess what's really going on and create a plan teller specifically for you and physical therapy isn't just for recovering after an injury it's about staying ahead of them building strength improving movement and supporting longevity so you can live life on your own terms To learn more and find a local physical therapist, visit ChoosePT.com.

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