[ad_1]
When done properly, the business credit is obtained without having to provide an SSN on the application.
This means that no credit check is done on the part of the business owner to get approved. It also means that someone who has bad, even terrible personal credit, can still be approved for business credit.
Businesses report to credit reporting agencies, not consumer reporting agencies.
Therefore it does not have any adverse effect on the consumer credit of the owner as it is not reported to the consumer agencies.
This means that even using more than 30% of the account will not have any adverse effect on the individual score.
And when you apply for business credit, there are no inquiries on personal credit unless you provide your SSN.
30% of your total consumer score is based on usage, so if you use your personal cards for your business and if you use those cards, you will lower your score. Using more than 30% of your limit will result in a score reduction
So if your limit is $1,000, carrying a balance over $300 lowers your score. This means that 40% of your total score is damaged. With true business credit, 0% of your score is affected.
10% of your total consumer score is based on inquiries, so if you are using your personal credit to apply for business loans and credit, those inquiries will lower your score as a result.
Also, those inquiries may stay with you for a longer period of time, affecting your ability to borrow more money.
And some unsecured business loan sources won’t even lend you money if you have two or more inquiries on your personal credit report within six months.
Credit does not report to consumer agencies, so neither inquiries nor usage have any effect on your consumer score.
how to devalue your business
Anyone who has sold or bought a business will tell you the importance of this.
All potential buyers can easily get comprehensive information about your business by getting your business credit report… which anyone can access.
This means they’ll have instant access to information about your business, including:
• Credit Score
• Higher Credit Limits
• Past Payment Performance
• Employee
• Revenue
and many more…
Now that you know how easy it is to obtain comprehensive credit and financial information for a company, wouldn’t you get it if you were the buyer?
Based on your business credit report, would you like to buy your company?
Does your report show that your company is “established”, does it show that you pay your bills, do you appear to be a successful company from your report?
If you could choose between two companies to buy that were identical in every way except business credit, which would you buy…
… with a very limited or no credit profile … or with a credit profile that shows good payment performance, and an available credit.
[ad_2]
