Thursday, June 01, 2006
How to Choose a Business Credit Card - Credit Card Offers
"A business credit card is not all that different from a personal credit card. Business credit cards generally have a credit limit, and minimum monthly payments to pay. When lenders are deciding whether or not to extend a business credit to a company, they will look at the business owner's credit as well as anyone else's credit who will have permission to use the account."As I consult with new business owners they often ask me how they can get a corporate credit card with out it hurting their personal credit. Many of them do not understand that even if they do have to give their SS# in truth it will only drop their personal credit score a few points and the monthly payments will not show up on their personal credit report.What this means is initially it will affect their personal FICO score, but in the long run will not hurt their FICO score.
What you should know about corporate credit
I have been in the corporate credit business now for almost 10 years and in that time I have seen a lot of schemes and scams’. I have also seen a lot of bad advise posted in chat rooms and message boards. So I have opened this new topic to help people with the right and legal way of building corporate credit and business financing.
Things to know before building corporate credit:
The first thing you need to know is that corporate credit is for the needs of the corporation not for personal use. If the credit is used for personal proposes that person is committing fraud.
Second, there is a big difference between personally guaranteeing a line of credit and a unsecured line of credit. Unsecured does not mean you will not have to use the owners personal credit score to obtain the line of credit.
Third, prior to filling out that first application, Make sure the business is completely setup not just the legal documentation but also the physical location complete with having a business phone listed in 411/directory assistance.
Next some common scams’:
Setting up a corporation and then filling multiple divisions and applying for a new tax ID for each division. A corporation can have only one tax ID and any one how is using this as a credit building technique is doing so illegally.
Corporate credit programs that off an investment opportunity in to a business or real estate just using your good credit score. What will happen is that they will get your permission to fill out corporate credit applications on your behalf. This will destroy your personal credit if not done the right way. Usually they will not monitor how many applications and just apply for as many as they can. If you do not have control over what applications are applied for and how often then run.
Beware of companies offering to build your corporations credit for you. The truth is that the only people that can do so are the owners and officers of the company.
I hope that you have found this information helpful and please post any questions you may have about this subject mater.
Have a great day!
Things to know before building corporate credit:
The first thing you need to know is that corporate credit is for the needs of the corporation not for personal use. If the credit is used for personal proposes that person is committing fraud.
Second, there is a big difference between personally guaranteeing a line of credit and a unsecured line of credit. Unsecured does not mean you will not have to use the owners personal credit score to obtain the line of credit.
Third, prior to filling out that first application, Make sure the business is completely setup not just the legal documentation but also the physical location complete with having a business phone listed in 411/directory assistance.
Next some common scams’:
Setting up a corporation and then filling multiple divisions and applying for a new tax ID for each division. A corporation can have only one tax ID and any one how is using this as a credit building technique is doing so illegally.
Corporate credit programs that off an investment opportunity in to a business or real estate just using your good credit score. What will happen is that they will get your permission to fill out corporate credit applications on your behalf. This will destroy your personal credit if not done the right way. Usually they will not monitor how many applications and just apply for as many as they can. If you do not have control over what applications are applied for and how often then run.
Beware of companies offering to build your corporations credit for you. The truth is that the only people that can do so are the owners and officers of the company.
I hope that you have found this information helpful and please post any questions you may have about this subject mater.
Have a great day!
