As you build business credit, you been keeping your company and personal finances separate?
You probably already know that mixing them isn't a good idea. But you may be asking...
What are the main differences between using personal and corporate credit for your business?
Well, corporate credit comes with about ten times the spending power compared to personal credit. Some business owners don't bother keeping their business and personal finances separate because they think it's easier to use their personal credit. They believe it can get them offers faster, with lower interest rates and without the need for collateral.
Why Separating Your Business & Personal Finances is a Good Idea
However, the truth is, by separating your business and personal finances and having both personal and business credit profiles, you can reduce the load on your personal credit. Plus, getting approved for higher credit limits allows you to decrease your credit utilization, which can improve your credit scores. It's a win-win from both sides.
Not to mention, business credit often offers much higher credit limits than relying on personal credit alone. Business credit often comes with lower interest rates, too. So, when it comes to separating business and personal finances and funding a business with personal credit, the cons usually outweigh the pros.
When you use your personal credit for your small business, the line between your business and personal finances pretty much disappears. This is significant for three main reasons:
Personal Credit Score Damage: Small businesses are considered riskier, so using personal credit to fund them can harm your personal credit score more than necessary.
Personal Liability: If you can't pay or default, debt collectors can come after both your company and your personal finances. Mixing personal and business finances could also increase your personal liability if your company faces legal issues.
Lower Credit Limits: Personal credit usually offers lower spending limits compared to business credit because consumer credit is not meant to support a company. You might get lucky and secure a high-limit card, but individuals typically don't get approved for more than $20,000 to $30,000 per credit account.
Now, let's talk about credit scores for a moment...
A business credit score works similarly to a personal credit score in that it measures your business's creditworthiness. Although there are different business credit bureaus for businesses. Dun & Bradstreet, Equifax and Experian are the big 3. Lenders use your business credit profile when you apply for financing to determine how much credit to extend to you and your credit terms.
When you separate business and personal finances, you treat each credit profile separately so they can build their own separate credit history.
Differences between personal and business credit scores:
Credit Limits: Small-business credit cards often have more spending power than personal credit cards because they consider both your personal income and business revenue when determining your credit limit.
Standardization: Personal credit bureaus typically use FICO's algorithms to calculate a credit score. Business credit score algorithms don't follow a single standard and can vary from bureau to bureau.
Credit Reporting Policies: Personal credit cards usually report activity to the major consumer credit bureaus, affecting your personal credit score. Small-business credit cards primarily report to business credit bureaus and have less impact on your personal credit score. However, some business credit cards may rely on your personal credit score for approval or report negative activity to consumer credit bureaus.
Access: You have the right to a free personal credit report from each of the three major consumer credit bureaus every 12 months. This isn't the case for corporate credit. You'll need to pay to see your company's credit report and score at the major corporate credit bureaus.
Data Sources: Personal credit agencies gather data from public and court records, lenders, credit card issuers, and collection agencies. Business credit reporting bureaus get their information from public records, lenders, vendors, other credit reporting bureaus, and sometimes even your personal bank records and credit report.
Privacy: Personal credit reports are only visible to you and select parties, like creditors. In contrast, corporate credit report information is public.
Hopefully that helped give you a better understanding of the benefits of separating business and personal finances and credit profiles.
Are You Beginning to See What Business Credit Can Do?
Corporate Credit Secrets is now open to the public. With our proven method, you can build high-limit corporate credit as quickly as possible. This approach can help you secure tens to hundreds of thousands in credit, and you can repeat it as many times as you want.
If you're tired of struggling with cash, getting denied credit, or worrying about your business's survival, Corporate Credit Secrets might be the solution for you. Explore how it can help you out and see you on the inside!
And if you missed it, you can still watch the NEW Corporate Credit Workshop here. It explains the power of corporate credit and how our proven system offers a different approach.
Want Help Getting Approved for High Limit Business Credit?
We have so much more to share with you to help you get approved for the money you need. So, if you want help in establishing business credit to grow your company faster, and want to get approved for higher credit limits in less time, consider joining our Corporate Credit Secrets Program.
We've recently updated the entire program and you're going to LOVE what we have to show you!
What Corporate Credit Secrets Will Help You Accomplish
What You'll Learn:
Not only will you learn how to establish a new company, you'll discover the quickest way to create your corporate credit profile, what to do if you're in a high-risk industry, important tips when opening your business bank accounts, the best lenders to get credit from, how to choose the best types of funding for your business, what to do if you have little to no time-in-business or revenue and SO MUCH MORE! We'll even share a few ways to quickly boost your personal credit score so you can get access to the MOST MONEY possible!
By following the strategies and techniques outlined in Corporate Credit Secrets, you're not just building credit; you're opening the door to new opportunities. Opportunities to grow, expand, and thrive in a competitive business environment. You're setting your company up for financial stability and resilience, even during challenging times.
The Opportunities You'll Have:
Remember, your business credit score isn't just a number; it's a reflection of your company's overall financial health and trustworthiness. With a strong credit profile, you'll have access to the money you need, along with better terms and rates, and the ability to make strategic decisions for your company.
But don't wait. Because right now students with BRAND NEW companies are getting approved for $50,000-100,000 in no-doc business credit per lender! (We can help you do the same!)
We promise you'll be able to secure $50,000 or more in 6 months or less!
Does 6 months sound too long?
*Don't worry you'll probably secure business credit MUCH FASTER than 6 months but we like to under-promise and over deliver since some students are starting with no business whatsoever. If your business is already up and running this process will go MUCH FASTER for you and you can probably obtain $50,000+ in just a few weeks or even days!
One student recently got approved for over $100K in just 18 DAYS! Isn't that awesome?
Need more than $100K?
We've got you covered! This isn't just plain old vendor credit you heard about on social media. Not only will we show you how to find a virtually unlimited supply of lenders - we'll give you our business credit fast-track framework that will show you how your company can get approved for over $1,000,000 (over a million dollars) in no-doc unsecured business credit! Isn't that incredible?
If you're ready to take your business to new heights, then it's time to establish strong business credit with the help of Corporate Credit Secrets.
The Business Credit Guarantee You Won't Find Anywhere Else
Despite the "credit crunch" businesses (even brand new startups) are STILL getting approved for $50K, $100K, $150K every day! Aren't you ready to be one of them?
Imagine having access to over $50K-100K in credit within just a few weeks or months - it's not a dream, it's a guarantee. If you're not able to secure at least $50K within 12 months, we'll refund every penny!
You just need to know what lenders are looking for and the right steps to take.
With Corporate Credit Secrets, you can supercharge your business growth, expand your operations, and take your entrepreneurial journey to the next level. Don't miss out on the financial stability and competitive advantages that strong corporate and business credit can bring…
Corporate Credit Secrets is a step-by-step guide will show you exactly how to get approved for the best business credit offers to improve your company's cash flow and success. If your company needs more working capital - why wait? The methods we teach will work even in tight lending environments so there's no better time to learn how to get all the money your business needs.