subject: Build Business Credit Successfully [print this page] Build Business Credit Successfully Build Business Credit Successfully
Why is it important to build business credit? In order to understand this, you need to understand what business credit is and how it helps a business to grow and thrive successfully.
Who wouldn't want the feasibility and flexibility of having a business of one's own? You are no longer beholden to any other person or company. You are your own master and you have people who reply to you now. Is everything really as simple as this? Of course not! There are so many things that need to be kept in mind as far as setting up a business is concerned. One of the main issues is the flow of startup capital. This is the initial amount needed to set up the business and for immediate expenses. More often than not, people bank on their personal credit to tide them over. Is this a good idea? No! It is very important to establish business credit.
Business Credit vs. Personal Credit
We are used to dealing with personal credit checks, personal credit cards, personal loans and even personal credit scores like the FICO. Business credit concepts are a little different. First and foremost, personal credit protection laws do not apply to business credit. Accessing business credit does not invite any interference into your personal money and credit balance. It is best to maintain business credit as separate from personal credit. By building business credit, you can apply for business credit cards and small business loans without submitting to a personal credit check in most cases. When you build business credit, it opens up a whole new plethora of opportunities for you.
Credit Builders
In essence, business credit is a statement about the capability of an organization to make good on their debts. This will require the creation of a strong business credit profile and one can make use of credit builder programs to do so. These are organizations and professionals who help you with business credit building in the best and fastest possible way.
Credit Applications
You will have to register your business first to make use of the business credit you have. Find vendors and creditors who are ready to extend a business line of credit to you. Business credit bureaus like Dunn & Bradstreet, Equifax Business, Experian Business and Business credit USA will evaluate and give you a business credit score. You will, however, have to volunteer payment information and vendor approvals to them for this.
Some vendors require a personal guarantee check to be given. As much as possible, avoid such creditors and refrain from mixing your business and personal credit. The reason behind this is that if you have worked hard to build business credit but it is still linked to your personal credit via guarantees then you may be at risk of liens being placed on your personal property if a business debt remains unpaid.
