When done properly, business credit is obtained without the SSN being supplied on the application.
This means there is no credit check from the business owner to get approved. This also means that anyone who has bad, even horrible personal credit can still be approved for business credit.
Business credit reports to the business credit reporting agencies, not the consumer reporting agencies.
So as business credit is used it has no adverse impact on the owner’s consumer credit because it’s not reported to consumer agencies.
This means utilizing the account, even over 30%, won’t have any adverse impact on the personal credit scores.
And there are no inquires on the personal credit when you apply for business credit as long as you don’t supply your SSN.
30% of your total consumer credit score is based on utilization, so if you use your personal credit to get credit cards for your business and if you use those cards you will lower your scores. Using more than 30% of your limit WILL result in a score decrease
So if your limit is $1,000, having a balance above $300 lowers your scores. This means 40% of your total score is damaged just by applying and using the credit you obtain using your consumer scores. With true business credit, 0% of your score is affected.
10% of your total consumer credit score is based on inquiries, so if you are using your personal credit to apply for business loans and credit, your scores will go down as a result of those inquiries.
Plus, those inquiries can remain on your credit for an extended period of time affecting your ability to borrow more money.
And some unsecured business lending sources won’t even lend you money if you have two inquiries or more on your personal credit reports within six months.
But with business credit, the credit doesn’t report to the consumer agencies, so neither inquiries nor utilization have any effect on your consumer credit scores.
This is one more reason every highly successful business has business credit.
Credit Suite helps you get Business Credit and financing for your business and make money offering Build Business Credit, Business Credit Check and financing for your customers. The Business Finance Suite is the most comprehensive system in the world for securing money for business owners.
Comments