Credit/Loans/Business/Money: Steps for Rebuilding Credit and Starting a Business

[Wing5]

Didn't see any Money or Business Thread so here it is
Going to be some specific questions.. thanks for any Money expert that can help

- I'm still rebuilding my Credit from COVID, so score isn't the best
BUT- I'm in the middle of getting a Collateral/Secured Loan from a bank, as it would serve as a Business Startup (Drone business), $ for New Auto (just going to pay cash for it), and Debt Consolidation.

(1) Debt Consolidation: My first step would be to get my Personal Credit utilization under 30%, easy. For instance, I would put $5,000 towards my Credit card so then my utilization would be under 30%. Right now it's like 75%.
---Unless a better play would be to get a $5,000 secured credit card, which would increase my credit line, and I could split my balance between the two, as long as (Credit Card 2) is close to an APR as (Credit Card 1) would be.

(2) $ for a New Car: I'd just pay cash for it. It'll be under $10K, which means I could get it for less than $8K cash.
Unless there is any benefit to paying half down, and then finance another loan for auto, for $5k, because this helps credit.
(The new car won't be a business vehicle, but will be used for business).

(3) Business Line of Credit: A completely new can of worms. Don't know where to start here. I'm assuming after I do Step 1 and 2, is when I start thinking business line of credit. Unless... which I've seen a possibility for.... is to transfer most of my debt to my new business line of credit? How would that work?

Thanks for anyone who has any knowledge, recommendations, what they've done in the past, or their 2 cents
-W

 

[Sandy23]

Didn't see any Money or Business Thread so here it is
Going to be some specific questions.. thanks for any Money expert that can help

- I'm still rebuilding my Credit from COVID, so score isn't the best
BUT- I'm in the middle of getting a Collateral/Secured Loan from a bank, as it would serve as a Business Startup (Drone business), $ for New Auto (just going to pay cash for it), and Debt Consolidation.

(1) Debt Consolidation: My first step would be to get my Personal Credit utilization under 30%, easy. For instance, I would put $5,000 towards my Credit card so then my utilization would be under 30%. Right now it's like 75%.
---Unless a better play would be to get a $5,000 secured credit card, which would increase my credit line, and I could split my balance between the two, as long as (Credit Card 2) is close to an APR as (Credit Card 1) would be.

(2) $ for a New Car: I'd just pay cash for it. It'll be under $10K, which means I could get it for less than $8K cash.
Unless there is any benefit to paying half down, and then finance another loan for auto, for $5k, because this helps credit.
(The new car won't be a business vehicle, but will be used for business).

(3) Business Line of Credit: A completely new can of worms. Don't know where to start here. I'm assuming after I do Step 1 and 2, is when I start thinking business line of credit. Unless... which I've seen a possibility for.... is to transfer most of my debt to my new business line of credit? How would that work?
Rebuilding credit is a crucial first step when starting a business. It's essential to pay off any outstanding debts and avoid late payments. One way to improve credit is by taking out a small loan and making consistent repayments. Once your credit improves, you can access better funding options for your business. Also, consider outsourcing some business functions, like customer support, which can reduce initial overhead. If you're looking for an affordable solution, Call Center Outsourcing Services can help your business grow without the need for large investments.
Thanks for anyone who has any knowledge, recommendations, what they've done in the past, or their 2 cents
-W

You're thinking in the right direction — tackling credit utilization first is smart. I'd pay down the $5K on your current card rather than opening a secured card. Keeping older accounts active with low utilization usually gives a better boost than opening a new line (which also triggers a hard inquiry). For the car, paying cash is solid if it won’t drain your reserves too much. Financing a small amount could help credit mix, but the gain might be minor compared to just owning it outright, especially if you’re also juggling business startup costs. Usually, banks want to see some established business revenue first. I'd get your credit in order first, then look at a small secured business loan or a business credit card as your first step.

 

[GadgetGuy]

Didn't see any Money or Business Thread so here it is
Going to be some specific questions.. thanks for any Money expert that can help

- I'm still rebuilding my Credit from COVID, so score isn't the best
BUT- I'm in the middle of getting a Collateral/Secured Loan from a bank, as it would serve as a Business Startup (Drone business), $ for New Auto (just going to pay cash for it), and Debt Consolidation.

(1) Debt Consolidation: My first step would be to get my Personal Credit utilization under 30%, easy. For instance, I would put $5,000 towards my Credit card so then my utilization would be under 30%. Right now it's like 75%.
---Unless a better play would be to get a $5,000 secured credit card, which would increase my credit line, and I could split my balance between the two, as long as (Credit Card 2) is close to an APR as (Credit Card 1) would be.

(2) $ for a New Car: I'd just pay cash for it. It'll be under $10K, which means I could get it for less than $8K cash.
Unless there is any benefit to paying half down, and then finance another loan for auto, for $5k, because this helps credit.
(The new car won't be a business vehicle, but will be used for business).

(3) Business Line of Credit: A completely new can of worms. Don't know where to start here. I'm assuming after I do Step 1 and 2, is when I start thinking business line of credit. Unless... which I've seen a possibility for.... is to transfer most of my debt to my new business line of credit? How would that work?

Thanks for anyone who has any knowledge, recommendations, what they've done in the past, or their 2 cents
-W

You are late to the party.

I would seriously reconsider your Drone business idea, especially since the bar to entry is now so low that everyone with a drone is now competing with you in a race to the bottom, where a teenager with no overhead and a free drone from Mom and Dad can outbid you on every job, forcing you to bid below your costs to compete. Plus, he'll have far more talent and experience at flying, and even if he doesn't, most of the automated shots will make him appear to be an expert.

Unless you already have an existing profitable business clientele to whom you can pitch drone services as an additional add on, your plan is doomed to failure, and borrowing money to fail is a path to financial ruin. At best, you will be buying yourself a very low paying job. It's not a business unless you are making enough money to hire someone to replace you. Otherwise, it's just a job with no guarantee of ever getting paid.

Get a real job, where you get paid from day one, without borrowing, assuming anyone would otherwise even loan you money to start a drone business (highly unlikely, unless it is a family member).