And if you've got really good credit, they're not necessarily wiping you out, they're just kinda saying, "Hey, we're cutting you back."

Yes.

Although I-- It was interesting, the CFPB did a study on this in 2022, and so they looked at credit limit decreases during the pandemic and during the Great Recession.

I mean, they looked at them overall, but those were the two periods where we saw them really accelerate for a lot of customers who wouldn't normally see them.

And what was interesting to me, Chuck, two things.

One is when they took down the limits, they often really took them down.

I mean, it really reduced the available credit for the consumer.

I'm gonna be using this," et cetera, even if you aren't gonna need it, or you're better off saying nothing and going, "Okay, well, I'll sneak this in, but my credit usage will be high"?

So Gerri, when you advise us to go in and look at your credit report, what should we be looking for that could improve the numbers?

Annualcreditreport.com is the website that's mandated under federal law for you to check your credit report for free.

It doesn't require free credit scores, though, so you're just going to see the report itself.

And the things I would really focus on there is making sure that all the accounts that are listed are yours, make sure that the information looks relatively accurate.

There's gonna be at about a month reporting cycle, so it could be your balance from a few weeks ago, not your balance, you know, today.

And then, um, if you're thinking about, "Well, what can I do to improve my credit score?" I have two piece of advice.

One is the easiest thing usually, or very often, to affect your credit score is bringing down balances on credit cards, because high balances on credit cards can affect your credit scores.

Now, why is that?

Right.

And then what happens is when money comes in, whether it's your customer swipes a credit card or, you know, pays you by PayPal or whatever it is, then they take their repayment right off the top, as, often as a percentage of the sales.

And again, that can happen on a daily or weekly basis, occasionally monthly, but it's usually more frequent than that.

And there are two big traps that, that business owners fall into here.

One is, you know, technically these are not loans, they're advances, so they don't have to follow all the same lending rules that, you know, other tradit- more traditional loans would follow.

And one of the things they do is they usually express the payback in a dollar amount or in a factor rate.

So, let's say the factor rate is 1.2. That means right the moment you sign and say, "Yes, I accept this advance," you're gon- you're on the hook for 1.2 times the amount advanced.

Go away." [laughs]

We always need tools, whether it's credit card purchases or how do we, what would be, I guess, your best strategy? foundational set point for them to start ensuring that they are working towards business credit with purchases they already have to make for the business?

Well, one thing you may want to consider is a small business credit card.

And these are available.

What I don't think people realize that these can be available as soon as you start your business.

So and and even before you're full time in your business, you know, you may want to go ahead and get one of these because most of the credit decisions are made based on your personal credit and income from all sources.

So that can be household income.

Maybe you have a spouse or partner who's still working.

Say we've got a little bit of cashflow going and that person, how do we start leveraging debt as a tool based on business credit and not personal credit?

... that you see?

Yeah, so the big trap is you are c- your cash flow is tight, and so you end up factoring, and you don't...

You, you factor to whoever reaches out to you first versus figuring out who's the best, you know, best partner for this, and you're not prepared.

So, and this is, again, with these businesses that have fluctuating cash flow, it is a real issue that, um, you need money now.

Or let's say something breaks down, you have a very expensive repair bill, whatever it may be.

Um, and so what I encourage business owners to think about, and this is hard to do when you're in the throes of trying to run your business, you know, [laughs] stay on schedule.

There's, there's a lot of other things that compete for your interest.

First is how would you best advise those that are in this space and wanting to, you know, take the next leap in their business to keep that fine line of separation between personal and business funds? And then second, are there any free re- resources that are available for these young entrepreneurs that are looking to be better when it comes to financial money management as well as credit?

What would you say would be a few steps forward? that a small business owner in a trucking industry should do to begin to build that business credit?

Well, the first thing I would do is check my personal credit scores, because if your personal credit is in the 650 to 680 range, it's going to be a lot easier to get some of those types of accounts.

It depends on what you're getting.

So just check that.

If it's not, there's absolutely steps.

NAV has a free guide that will walk you through steps you can do to work on your credit efficiently.

And then I would start with the business credit building.

And can you kind of go into how that's viewed upon as far as speed to pay, especially on these net 30 accounts and things of that nature? How important is speed to pay from the time that you get the invoice to the payment that actually process? How does that impact a small carrier?