How much do you know about business or commercial credit? Would it surprise you to find out that, according to Experian, 90% of business owners know very little about commercial credit. Many use personal credit to run their businesses.
What you need to know about business credit
That said, there are several significant differences every business owner should know between business and personal credit.
- All business owners, including “part-time” or even “home-based” businesses can benefit from company credit cards. Additionally, it’s best to have vehicle leases on company credit rather than personal credit.
- Commercial credit capacity is generally larger than personal credit capacity. You may be able to leverage 10 to 100 times more credit to grow your business and/or raise funds.
- Commercial credit scores use a different calculation from personal credit scores. For example, the amount of credit you’ve used can drop your personal credit score. However, it has little impact on commercial credit.
- A business owner uses the business Employer Identification Number (EIN) for credit. In fact, a person can have multiple EINs for multiple companies. With personal credit, you’re limited to only your social security number.
- Business owners often make the mistake of personally guaranteeing loans and financed items. However, they don’t have to do that. It’s best to build and develop commercial credit using the company EIN.
What this means to you
Knowing all this, you can see why it’s important to report commercial credit to the bureaus. Datalinx, LLC is here to help you with that. Ready? Get started today reporting your business’ credit. Just fill out the short form to your right!
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