How to Use Credit

Credit should only be used for leverage not for cash.

For example, It's OK to use credit for an earnest payment when you put an offer in on a property, but only if you are 100% guaranteed to get back.

Another good use of credit is to cover expenses (high's and lows) against income you are guaranteed to get in. For example, if you have an investor that's contractually guaranteeing the purchase and construction of a project, you can keep a project moving by using a credit line to cover labor or material costs; but only if you trust the investor and they are proven to pay relatively on time on other projects.

If you are doing government work, certain agencies are known for not paying on time. Make sure you have an arrangement with the creditor that allows you to pay them when you get paid. In most cases they want at least an interest payment made on a monthly payment. Do you have the ability to make payments on the credit line if the investor is late? If not, don't use credit lines.  Let the project sit.

Never use credit to start your company, pay bills or other overhead, especially if you don't have steady income.