Always at the bleeding edge of the fundability sword, Merrill Chandler guides you away from the landmines that will blow up your credit approvals. In this episode, Merrill dives into the necessary things you need to do before submitting your business credit application. He lays down the step-by-step process on how your data points impact your approval, covering all the bases that will help you become a professional borrower and play the funding game with lenders.
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How Your Data Points Impact Business Credit Approvals
Southwest Airlines Business Card
I’m going all out because I want to show you the things that I’m learning at the bleeding edge of this fundability sword. At the same time, I’m going to show you how to make sure you don’t step on these landmines. I’ll dive in and we will start talking exactly about what I needed to do before I submitted a business credit application. I found out some surprises. It was crazy, the things that are going on out there behind our backs. First of all, let me give you a story about this. I love Southwest Airlines. I’ve been a fan for years. Because we are always on the road and I do events, I get two bags included in the price and I don’t get the change fees. Our schedules change all the time and I love the flexibility. Without being in the ad for them, shout out to Southwest. In order to improve my status with them, gain points or rewards, I’ve always wanted a Southwest credit card. The problem is Southwest is backed by Chase, so it’s a co-branded card with Chase. It makes it a tier-one but it’s 80%. I don’t want to accept 80% cards of value contributions on my borrower profile.
What happened was Chase announces a Southwest business card. You have 70,000 points when you get started. Here’s what’s amazing. I went through the process to create and I discovered that it’s a pure business card where it only reports to the business. It does not report to personal. I was all in. I get ready to start doing my thing to apply and I ran into some things that you may have already run into or we want to stop you from stepping on these landmines. Let’s go through this process together and show you what I do before I apply for any kind of credit because things are happening again behind our back.
Going To The Department Of Corporations
I know I need to verify all my information. My PBID needs to be in order and my BCID, my Business Credit Identity and my Personal Borrower Identity. We talked about the other 20%. We’re going to talk a little further about that 20% and what FICO SBSS measures when they validate our business information. The first thing I did was to go to the Secretary of State in Utah. It’s called the Department of Corporations. I checked my data to see where everything is current according to them. You’ve got to remember that you can be right or you can be happy. It does not matter what the truth is. What matters what is being reported. We can go fix it, but do not get hung up or discouraged or angry if something is wrong. We are here to be happy. We are here to be fundable, to be F*able. First things first, I look up and I noticed, my address on the State of Utah has not been updated. That was a fail on my part.
I usually tell my team training a new advisor to go change our local stuff so that they can practice it for our valet clients. It’s a great training opportunity but I have not done that yet. I failed. My registered agent address is my PBID and the address is incorrect. The date of incorporation was in August of 2015. I’ve been doing this for 25 years. This was the iteration of the business when I bought out a partner years ago. We reincorporated, make everything cleaned, but eight of fifteen, that’s going to be important. That is the real state of Utah information and it shows me as an LLC.
Business Credit Report
That’s my first thing. Before you do anything else, you go look at what is being reported by the state. You have to go through the process of updating that. The next thing I did is I went to Experian, EQ business credit report and I tried to order my business credit profile. It said that I was unable to verify my identity. We got a problem because I know my physical address and what’s on Google is my current address but I did not update the state. Out in the world, I have not synchronized my business addresses. I was unable to get that. I’ll do that and be able to acquire that and make the fixes there. We’ve got to know that manual intervention. This is the credit report version of manual underwriting. They’ve got to verify who I am.You can be right or you can be happy. It does not matter what the truth is. Click To Tweet
I have a strike against me because we don’t know what they have there yet. I go to the Experian business credit to pull that report. I put my information in there and wisely, I didn’t put my current address. We get in the habit of filling out our applications based on what we believe is true in real-time. If your documents aren’t caught up, then you’ve got to catch up on your documents. Otherwise, that’s what automatic underwriting checks. 80% of FICO business lending approvals are based on your personal borrower profile, including your PBID, but 20% of it is verifying your business data. I put in the data that I have in the State of Utah because that very well may be still what is being updated because Experian picks up data from the State of Utah or from your secretary of state.
When you click on Get Report Now, there are several opportunities to buy different reports. It said I didn’t have any trade lines, so I got the profile plus. It was $39. Here’s what’s interesting. There are no trade lines reported on this credit report, but remember, I have numerous credit lines in the name of this consulting company called CreditSense. Notice the address, it still has what’s on the State of Utah. My PBID is perfect as the registered agent, but it’s also known as our operating as CreditSense fulfillment. CreditSense fulfillment was something we did when we were sending it years ago. We were selling kits of do-it-yourself optimization.
It failed miserably because there’s not a straight line. Coaching is required at some point or another on your personal or business optimization tracks. I’ve got to clean that up. Notice family linkage. The ultimate parent, the company it says is CreditSense at this address, but branches on alternative locations. It’s picking up. This is my actual current, true, where my team works address, but it’s calling it a branch or alternative. It’s collecting it. I don’t know where it collected that from because I’m not on the inside of Experian business credit reporting. What I know The South Temple address is what’s on the Google site. I know that it’s out there and it’s just adding it as an alternative address. I’ve got to fix this. I’ve got to change that up. Notice the key personnel. It’s got Chelsea Morgan who worked here years ago and still, she is under key personnel. I had attempted before when I was correcting this. I’m going to have to go back in and have that removed. The SIC codes are personal credit institutions. 6141, that is not good. The business consulting services, this is supposed to be 8742, not 8748. I’ve got to correct this. I’ve got to bring this up.
Dun And Bradstreet
My team’s going to have a blast in their next training. We’ve got the file established and it was in October of 2015, date of incorporation. That’s accurate. Experian business is pulling the correct date of incorporation. It says I have a 38 out of 100. There are no trade lines. There’s nothing here, no UCC filings. This is awesome because the UCC filing, I don’t have anything and I have $75,000 with Wells Fargo, so that’s excellent as well. I don’t know what the lag time is for filing UCCs, but that UCC filing, that’s actually good news. I’ve got some cleanup to do with the Experian Bureau. Let’s go to Dun and Bradstreet. Dun and Bradstreet is the SBSS, Small Business Scoring Service. FICO uses Dun and Bradstreet primarily to create their scoring algorithm for the business side. They checked the others, but they start here at D&B. I go in, it’s called IUpdate.DNB.com. You have to have a profile. If you don’t have one, you need to create a business profile. When you click there, you have an opportunity to get a report. That report takes you into the I Update Experian. Wasatch Drive, where did that come from? Because that’s not the one at the state and that’s not the one I’m at. That shows as an alternative address for Experian. It says business address has changed from 455 North to 1925 South Wasatch, Salt Lake City.
That is a notification. It’s a special event. What does that mean? What is a special event? Because I didn’t do it there. While we were waiting, our old building, our new building had about 30 days before one started and the other ended. We forwarded the mail to this address. All my team worked from home because they have workstations a home as well. The mail forwarding is what created that special occurrence. One of my team members, Jessica, moved to Texas and works from Texas. She still is my business manager, still my dear friend. She was pissed off out of her mind because she got a notice that says, “According to information received from the United States Postal Service, your address has changed.”
She got the voting records. It changed numerous of her financial accounts. When you do a change of address with the postal service, they report that. There is an indication on the address that says, “Do not forward, address change requested,” or they will say, “Update this address.” If they slap it on, they’re updating the address with your creditors. This is the only thing that I can account for in this report because we put in a mailing address change. The other thing is it started in 2016, so they have my start date completely out of whack. It does say 8742 on Dun and Bradstreet. That’s correct as management consulting services. We’re solid there but this is not okay.
When I clicked to print the document, the report came up for us, 8742 is the SIC of 541, 611, administer management and general consulting. AICS codes, the SIC codes are all dialed. It’s got my PBID address and it’s got me as a domestic limited liability company. Everything is in here perfectly. Change of address from an earlier address to the current one that’s on the state of Utah, and then from the state of Utah, it’s all being are represented. They have the date of my incorporation. The filing date is 2015, but the original thing was 2016. We have a problem and my team and I are going to fix it. Let’s take a look at why this is important. Let’s go into my application and this is where I want to go. When I click on the button, it comes up to the credit card information. Let’s take a look at how I filled this out and why it’s important to do all that work before we hit the submit button.
First of all, CreditSense, LLC, name on the card. On the business mailing address, they’re using a mailing address. It’s not deceptive practices, but it is misleading. This needs to be the physical mailing address that is published on the state documents and on your business credit reports. I don’t care where you get your mail. They want to know where your brick and mortar or where you’re officing. If it’s a personal mailbox, if it’s a commercial mailbox, you’re going to take your best chances. I did not put in my current. Normally we would think, “Let’s just put in my current address because that’s the truth. I’m trying to tell the truth.” The truth has to keep up. Your documentation has kept up with the truth and that’s what we’ve been exploring in the business credit reports that we have reviewed.
Type LLC, you don’t see C-Corp or S-Corp in there. Many of you think that your federal designation is the type of company that you have. No, you’re either a corporation that’s a stock shareholder corporation, not a C-Corp. That’s a federal designation for how to be taxed. You’re either a corporation, an LLC, a non-profit, sole proprietorship, or a partnership. If you are a corporation, it’s okay. As a corporation or as an LLC, you can be taxed as an S-Corp federally or a C-Corp federally. Business phone number, tax identification, annual business sales, the number of employees that you have. I wanted to show you here the General Industry. I took a deep dive to find all the things that we needed to see.
Notice that it throws it all together, professional, scientific and tech services. That’s the general area. Are you advertising public relations, business services management or tech scientific consulting services? They’ve got these in every application I’ve ever done. They’ve got the designation, but sometimes you have to look for them. Admin general consulting services. Marketing consulting services, other management consulting services. These are the three things they’re looking up to see how fundable of an entity you have. How fundable of an entity do you have? They were in dropdown menus. They have a value associated with them. They are linked to SIC codes and they’re going to check those things against your SIC codes. It’s going to be a green flag, a yellow flag or a red flag and get kicked out if you’re not doing it correctly. Your title is an authorizing officer. I’m an LLC. I put a member. I own 100% but president, vice president, treasurer, I would use vice president or president depending on your structure.Coaching is required at some point or another on your personal or business optimization tracks. Click To Tweet
Talk to your accountant and attorney about which is most important. Never under any circumstance do you choose owner unless that’s the only thing that’s true. Are you a member of the LLC? If yes, then put that. Are you the president of your organization? Yes, put that. You only use owner if is no other truth also available. I put in a member. Notice my PBID street address, my PBID phone number. Yes, I have a phone number that is strictly for my financial relationships and that is so that my lenders can always find me. It’s the only people who use that number because I want a direct and clear line of communication with my lending partners. The whole idea is to become a professional borrower and play the funding game with our lenders. I want a specific number specifically for them. It is a mobile number. It has my identifying information, my tax ID and I also own 100% which I enter there. I’m not going to add employee cards, but notice they require social security and date of birth. They checked the credit report. If I do something later for one of my team members that’s completely different, but I’m not adding an employee. I do not want the approval decision to be based on anybody else’s a profile but my own, here’s all the disclaimers, conditions.
I go down to the very bottom, certifications. I have read and agreed to the sign. I am going to hit submit. It’s verifying my information. Remember where we said you have your borrower profile and then it checks Dun and Bradstreet’s database. It’s checking the Experian database. Notice that I just got put into manual underwriting, “Thank you for your request. We need to review your request a little longer. We will let you know of our decision as soon as possible. Thank you for choosing Southwest Rapid Reward Business Credit Card.” It may very well be I have mixed signals on my BCID, my Business Credit Identity. For me, it was worth it to go through this process. There’s a lot to this game. If you want to fast track to understand it, not just avoid the landmines but how to play this game, then pick up my book at GetFundable.com. Click on the book button in the menu. Go to my Bootcamp, spend a weekend with me and my executive team because I can answer questions live, whether you’re watching remotely or you’re in person at the bootcamp. We want to support you in getting as fundable as you can possibly be.
Finally, so many people ask about our coaching services, but I don’t even talk to you about coaching until I get the documents that are required of you that we do together, the worksheets that we do to see how fundable you are that happens in the bootcamp. It’s a complete analysis of your fundability situation. I am thrilled. We’ll see what happens. I’ll keep you posted on the next episode, but it is a pleasure walking you through this process, showing you the moving parts and what we need to do to make sure we are in good shape. A part of my ego would love to come up and say, “Congratulations. You’ve been approved.” There are problems that I did not take care of in my BCID. It is not all synced. I’ll bet you, they’ll ask me for verification of address. If they do, then I’ve got a spectacular personal profile. My PBID is all dialed. That is flawless. We’ll see what’s up. Get fundable, get real. Let’s do this together.