Business VS. Personal Credit
Why Separate Your
Personal Credit From Your Business Credit?
When officers and owners use their personal credit profiles to obtain credit
for a business, they risk the chance of lowering their own personal credit
scores in the process. There are two reasons you should strive to avoid
using your personal guarantee on business credit instead of
establishing corporate credit.
First, to avoid personal liability. If
the business cannot make the payments, each individual signer is personally
liable for the debt. Second, because credit obtained for a business can
affect your personal credit score. This is because your personal credit
score is based on several factors, including available credit, the amount of
available credit used, late payments, and much more. We can show you
how to
incorporate a business without impacting your personal credit.
CFI Can Provide the Following Lines
of Credit for Your Business
Major Hardware Store Line of Credit • Business Gasoline Card • Electronics
Store Credit Card • Printing Company Line of Credit • Automobile Lease •
Computer Equipment Line of Credit • Major Department Store Credit Card •
Business Equipment Lease • Platinum Credit Cards
All Without a Personal Guarantee or the Need for
Personal Credit Checks!
Building corporate credit is a process that should be established over time.
The older the business, the more options the business will have to build
credit and obtain loans and leases without the use of personal guarantees.
It is not easy to do this, but it can be done – and we can help you. The
first step to a great corporate credit rating is to start building the
business credit today.
Our
CFI Credit Builder
Program can shorten the average time it takes
to build corporate credit from 3 to 4 years to ONLY 9-12 months!
What Is Business Credit and How Does It Work?
Dun & Bradstreet (D&B) is the leading “business credit” reporting agency in
the U.S. When lenders and suppliers consider your application for a loan,
lease or credit terms, they will usually look at your D&B Report…and the
first thing they will look at on this report is your Paydex score. The
Paydex score is a numerical measure of your business’ creditworthiness that
is calculated based on your trade references’ reports to D&B of how your
company has paid its bills over the past year. A high score on Paydex’ 1 to
100 scale indicates that your company pays its bills on time. To obtain
approval for financing you generally need a Paydex score of 75 or greater.
Ideally, your business should have at least 5 trade references (i.e. vendors that extend credit to your business) that have given you a credit account and reported a favorable credit history to D&B. Our CFI Credit Builder Program can help you get these trade references in order to build up your favorable credit history.