Using Business Credit Vs. Personal credit

1 Reply

Hi All!

So I've been doing a lot of research on real estate investing and I came across a company that builds business credit profile. Just wanted to spark up a pros vs cons discussion to gain a different perspective.

My opinion is that It seems pretty logical that:

#1 You would NOT want to tie up your personal credit history with your business ventures. (i.e the don't mix business with pleasure rule!) Even if your personal credit history is at least good I would think not pounding it down as much as possible would be best.

#2 If you are a business entity (not taking personal liability) this gives you a sure way to keep things separate. If you are planning not to take personal liability then why use your personal credit history.

#3 You never know what kind of curve balls life will throw at you. Having a separate business credit protects you both ways.

I have talked to many people who seem to share my views but have not come across anyone that has a different point of view. There is always and bad side to things. What say you?

@Shannan Bowen you make a lot of good points. The one downside I would say is that sometimes you can get properties preferentially financed if they are done on your personal credit versus business credit. It can also affect the amount of money you have to use for down payments, at least in the SFR market.

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