What is the difference between business credit and your personal credit?
My answer is just based on my experience and research. I am not a big league player with a 100 million dollar revolving line of credit. I do have a business LOC, business CCs, and a business loan, as well as personal LOC, CCs, loans.
They do operate on the same principle however they are treated separately. Other than that, really it's just a matter of viewing your personal credit and business credit as two separate entity (just like insurance, taxes, and everything else).
What I have not figured out yet is if they have the same score range. Maybe other BP members can chime in on this but I think you pretty much answered your own question.
The score range for Duns & Bradstreet is 0-100 Paydex Over a 80 is good enough to get credit whithout a pg with some vendors. Experien business is also 0-100 Also over a 80 is good enough to get credit with out a pg with some vendors.
Business credit is for business, personal credit is personal. business uses EIN like a person uses ssn.
business credit is not protected by consumer protections laws
biz credit is based on D&B scores, as Daniel already pointed out.
creditors tend to assume a business is a home business unless it has a landline 'listed' in the yellow pages/mainstream business directories.
What does "CC" stand for? I'm guessing "LOC" is "line of credit"
Yes, sir. LOC as in Line of Credit and I use CC as Credit Cards in this situation. (It can stand for carbon copy or close captioning in other situations.
@Daniel Martinez That's great info on the score range. It certainly took me by surprise that it is only a range of a 100 but better than nothing.
Business credit and personal credit are different as in a personal credit requires a personal guarantee meaning that your SSN is attached and can be negatively impacted in the event that you default. "True" business credit does not require a personal guarantee ,however like someone mentioned, if you are not a publicly traded company then you will have to personally guarantee some forms of business credit which includes business credit cards, business lines of credit, etc. Although there are less than a handful of business credit (cash) cards that do not require a personal guarantee, fortunately with a good payment history that reports to the business credit bureaus (D&B, Business Equifax, and Business Experian), over time you should be able to request that the personal guarantee be removed from your business credit cards or LOC's to become fully corporate guaranteed.
Generally, C-corporations are better for raising commercial credit (visa, mastercard, amex, etc). If a company knows that you are a real estate company (using your NAICS or SIC code), they will shy away from that. It is best to use a NAICS or SIC code showing that you do "Business Management."
If your corporation's credit scores are not good enough (Paydex score and Experian Intelliscore), banks and other vendors will want to see your FICO.
There is someone named Jorge Bueno that has a system called "The Business Codex."
You can look him up, he is a very well knowledged individual
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