How important is your business credit score

How important is your business credit score

clearnook advisor Gary How important is your business credit score? After all a good credit score doesn’t pay the bills. Although it will have a direct result on how much you pay, on loans, insurance, new credit, and more. Your personal credit is attached to your Social Security number. You have an individual profile of your personal credit history with each one the three major credit bureaus, Equifax, Experian and TransUnion. Your personal credit score is summarized into a number ranging from 300 to 850. Each bureau scores and determines your creditability its own way, generally considering payment history, length of credit history, different types of credit, derogatory remarks, and the frequency your credit is ran. Soft pulls really have no effect; multiple 3rd party hard pulls will lower a score. The purpose of this page is to explain business credit will focus on personal credit resolutions on a different page.

Business credit reports scores are completely separate from your personal credit report and scores. A business credit report contains the same type of information as a personal credit report, but it is specific to a business’s debt repayment and public records, such as bankruptcies or tax liens. Business credit scores can also include information about the business owners and officers. They often are used in combination with a personal credit report for a small-business owner. If you are a “sole proprietor” or “doing business as” (DBA), the easiest way to establish your business is to keep all of the finances separate. You can open a business account using your Social Security number (recommend opening a business account at a local credit union due to little or no monthly service charges). Just by your SS#, does nothing to build your business score. Your business credit history is linked your Employer Identification Number (EIN) or Tax ID Number, which is how the government recognizes your business for tax purposes. You can apply for an EIN online and receive it almost instantly.

How important is your credit to you

Good credit can ensure that small businesses get financing when they need it. It can also qualify you for better loan terms. Even determine how much capital you can borrow. Better terms with smaller payments can lead to improved cash flow. It is the principal contributing factor to your future growth. Personal credit is highly regulated and consumers have protection on individual credit. On the other hand business credit is not protected. Anyone can look up any businesses credit at any point of time and can do so anonymously. If you want to limit your personal liability while running your company, it is best to establish your business credit and use it to run your business. If your personal credit is used to manage your business, you put yourself and your family at risk if your business fails or experience money problems. Creditors then come after you, because you will be personally responsible for the costs incurred by the business.

Growing up my father used to tell me “think about your credit, without credit you have nothing”. 20 years ago in one of my college financing classes gave a presentation on “how to repair your credit yourself”. My professor was very impressed had me redo my presentation to five other classes. The last 15 years working in financing, have seen 1000’s of credit reports and spoken to countless of individuals regarding their situations. For the people who have damaged credit and don’t take steps today to correct their reports today. Waiting till tomorrow it will be twice as hard to turn it around.

Business Capital Loans Are Approved Quickly. Our application process is different from other banks or lenders. We focus on the actual business performance that can be reviewed with a few months of bank statements. This allows us to be flexible on credit history checks and avoid the unlimited documents connected to your approval. We offer funding from $5000 to $250,000. The actual rate and term is dependent on the performance of the business. How much capital that can be borrowed depends on the monthly deposits. There is very little paperwork involved this is the main reason why the application process is so quick. There is not a single bank in the country that can approach the efficiency and speed of what an alternative lender can do for you.