The Beauty of Business Credit And The Beast with Personal Credit
The Beauty of Business Credit And The Beast with Personal Credit
If you’re an entrepreneur and you plan to be in business for awhile then you must start now to build your credit. If you wait, you simply lose the time that you could have been using to build your business credit.
There are just too many advantages of using business credit. I will pull back the curtain on both business credit and using your personal credit to fund your business.
Here’s the beauty of business credit…
1. It’s based on the TAX ID number you get from the IRS - You can have as many corporations as you’d like
2. You aren’t penalized for inquiries
3. The more money you get access to the better you look to vendors and other lenders
Here’s the beast with personal credit…
1. It’s based on your social security number (and unless you know how to get another one) you can only build credit on it
2. You are penalized for inquiries
3. The more money you get, the riskier you look to lenders and vendors
With Business Credit Perception Is Not Reality
With Business Credit Perception Is Not Reality
There are many different theories about getting business credit. Now, it’s not hard to get some form of credit for your corporation or business, but if you aren’t doing certain things right, you probably aren’t getting the most amount of credit you could be entitled to.
I’ve broken all the following rules, but I was still able to get $93,000 in business credit in just 3 months. Could I have received a lot more? Sure, but sometimes good is good enough.
However, if you want to get the maximum amount of credit for your business then make sure you follow these rules.
1. Have a land line versus a cell phone - This could be as simple as getting a vonage number. Just make sure that on the application you aren’t listing the business phone number the same as your cell phone number.
2. Put on your application a commercial address - If anything don’t list a P.O. Box. A UPS store address is better, a home address even better, but the best is having a commercial address.
3. List your business in 411 - It’s just another setup towards making you look more legitimate.
Imagine if you were granting money to a company. Wouldn’t you like to see that this is a legitimate looking business, rather than some mom and pop shop running out of the basement.
You can have that mom and pop shop, but give the bank the perception that you are a Fortune 1000 company. The best part is that this is all completely legal and legitimate!
My ‘Love-Hate’ Relationship with Business Credit Bureaus
My ‘Love-Hate’ Relationship with Business Credit Bureaus
Do you ever sit back and question why the business credit
bureaus are in business? If you ever stopped to think about
it, you would begin to understand that they are private companies
in it to make a buck…a serious buck.
Before, I pull back the curtain on the business credit bureaus,
it’s important to know that there are two main credit bureaus,
Dun & Bradstreet (D&B) and Corporate Experian. Sure, there are
countless others, but these are the main ones you should know
about because most lenders and companies go to these guys.
Both D&B and Experian rate your business by giving you a score.
D&B has a Paydex score and Experian has an Intelliscore. These
scores are important to you because that determines.
They bureaus are in business to sell information - your
information. Not only do they charge companies to pull your
business credit report and score, they sell your information to
lenders.
Now this could be a good or bad thing, depending on you score.
If your company has a bad score, you are less likely to get
financing. However, if you have a great score, you will be
bombarded with offers.
The reality is that lenders will buy the names and addresses
of most of the corporations on file with D&B and Experian,
and send offers in the mail. However, if you are a company
in good standing. you will be bombarded with offers. In
addition, you’ll get better terms and conditions.
Who likes the idea of banks chasing you to have access to their
money? Keep a good score and you’ll be flying high!
