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Is it possible to segregate personal credit score from business credit score for a small entrepreneur? They are totally different, yet needs to be segregated. A personal score may be a bad but someone will always take more cere to return the downpayments on time. This should not affect his business. Anybody has any clues?
When you are about to start a small business, the creditors provide you with business loan based on your personal credit history because your business has not yet established. Once your business is under profit, you can take further business loan using your existing business name and build up a credit history in the name of your business. Now, if you cannot establish your business, it is very difficult to obtain a business credit card and create a business credit history.
Yes, I think Carol is right. Unless you have a good personal credit history, you cannot get a business loan to start a good business and therefore cannot obtain a business loan or credit cards to build up a business credit history. Personal credit score plays a major role in determining the terms and conditions on your business loan.
I am already in business along with a private financer and about to borrow a loan with opening of a new wing. Although my previous records are fair, I am always cautious because I will prefer to pay business repayments on priority and hence personal score may get hampered. Anyhow if I succed to get credit card, is there possibility of personal credentials being verified?
devid , it is understood that your personal credit score is checked if you want to start a new business. so in this case it should be very clear that you should opt for a business credit if you have already built a good personal credit history. :arrow:
Business Credit Card
Hi Devid,
Creditors would certainly scrutinize you personal credit records, especially if you are the sole owner of your business. There are certain ways to avoid it. Check the following points:
1) Form a corporation or a limited liability company (LLC) and get an employer identification number (EIN). This ensures that members’ personal assets are protected from all claims against the company.
2) Register your business with business credit bureaus.
3) Obtain proper licenses for your business before applying for a business credit card.
4) Maintain proper financial payment and business plan documents.
5) Look for creditors ready to grant business credit without personal guarantee.
6) Avoid running into debt by making monthly payments, to keep your business credit report clean and free from negative listings.
There is only a fine line between personal and professional credit issues. So, both should be handled tactfully and sensibly.
Best Wishes for You.
but still i find it difficult to make a fine line between personal and business because most of the time personal credit history is what actually reflects in one's professional life.
So many banks not only check personal banking statement of a single promoter but all the business partners and thus it is important for a person to establish a smooth financial track record even in personal account.
keep us informed.
:arrow: :arrow: :arrow:
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