Without establishing business credit specific to your business, your business credit and your personal credit will always be intertwined.
If you already have excellent credit, this can make getting a business loan easier. Although you may not want to think of it, what if your business fails? If you tie your personal credit to your business venture and it fails, you will destroy your own credit at the same time. This can make a small business venture even riskier.
Tying your business credit to your personal credit means it will be hard to get any business loan, and your personal finances are liable in business risks you may take
You need to take the time to build business credit information. Just as the bank will check with a credit rating company such as Experian, Equifax, or Dunn & Bradstreet when you apply for a credit card, home loan, or car loan, banks will turn to the same companies to check your business credit. If you have not established business credit, your business stands an excellent chance of getting turned down for that business loan or business credit card – especially during these economic times.
How to Build Business Credit
Establishing business credit is not unlike establishing personal credit. First, you need to set up a proper business structure so that the business appears legitimate to business credit bureaus. For example, you need to get all the proper occupational licenses, a business phone number properly listed with directory assistance, and some form of corporate structure, at least on paper.
Second, you should buy or borrow products and services from companies likely to report your credit history. This is the best way that you will consistently build business credit. Watch out for scams that try to “sell” you business credit for large sums of money. These scams are a rip-off; when the credit agency realizes what you have done, they will purge this part of your business credit history, leaving you with nothing but a lighter wallet.
Our Business Credit Building System can help your business get the strong business credit it needs, guiding you through the steps your business should take
Third, if you have damaged your personal credit, you should work on rebuilding it. Even though banks offering credit cards and business loans are primarily interested in the business' credit history when they investigate their applications, they might still look at your personal credit. Do not try to use business credit as a substitute or a way of masking your poor personal credit; rather, build up both your business credit and your personal credit.
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