The experts at Business Credit Advisors
understand how to build business credit with bad personal credit. If your personal credit score isn't great, you're certainly not alone. Having bad personal credit doesn't have to stop you from developing excellent business credit for your incorporated or LLC business.
Every entrepreneur knows that maintaining excellent business credit is important. However, many business owners do not realize that a registered business can establish a legal credit history that is not joined to the owner's personal credit score.
How to build business credit without using personal credit
It takes some planning, action, and time to build business credit, especially if you have a very poor personal credit history. Personal and business credit scores are based on different variables and are not necessarily correlated. However, many banks and other lending services will look at an applicant's personal credit history to gain an understanding of how well he or she manages money before extending any business credit.
So, how to build business credit with bad personal credit? Here are several smart tips to start with:
Business Credit Advisors
- Register your company as either a corporation or LLC. These are considered legal entities that are separate from the people who own them. Note that this legal separation does not apply so simply when operating a sole proprietorship or general partnership.
- Obtain an Employer Identification Number (EIN) from the IRS. It is free and you can get started here.
- Register your company with major credit reporting agencies like TransUnion, Experian, and Equifax. Regularly monitor your accounts to ensure accuracy to stay on top of your business's financial history as it evolves.
- Pay your bills on time, or better yet, early. Make it a point from the onset of your company to be highly responsible and ensure prompt financial transactions with all vendors , suppliers, and customers.
- Continue working to improve your personal credit score. Having excellent business and personal credit ratings opens you up to numerous attractive financial opportunities. Remember the process takes some time and effort but it will be well worth it later.
helps people with bad personal credit to build excellent lines of business credit. Call or email us today and let us answer any questions that you may have. We help people with bad personal credit to build good business credit, every day! Sources IRS Credit Karma