Developer · Atlanta, GA · Member since 2016 · 165 posts · 32 votes
I am a Investor in the Atlanta, GA area and I want to see what you all are doing to build up your business credit. I have a DUNs number and all of the basics such as business bank account, LLC etc... But I want to know are there any specific steps you need to take in order to start building your business credit? I currently have one secured business credit card through my bank and I am trying to build on that.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
8y
@Rashad Jones Jennings Personally I've never had any luck having a bank finance a mortgage using business credit. Even with an LLC, they still wanted a personal guarantee, and looked at my personal financials for that.
Again, that's me at least. Others may have different experiences.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
8y
@Rashad Jones Jennings Personally I've never had any luck having a bank finance a mortgage using business credit. Even with an LLC, they still wanted a personal guarantee, and looked at my personal financials for that.
Again, that's me at least. Others may have different experiences.
@Rashad Jones Jennings Personally I've never had any luck having a bank finance a mortgage using business credit. Even with an LLC, they still wanted a personal guarantee, and looked at my personal financials for that.
Again, that's me at least. Others may have different experiences.
- Tom
I see. Thats what I've been reading. They consider real estate "risky" so they always want a personal guarantee. Thanks for your input.
Rental Property Investor · Myrtle Beach, SC · Member since 2017 · 134 posts · 71 votes
8y
I have a few credit cards out in the bness name and a LOC. Pay them off each month, and so they say it builds the business credit up. But like Tom said, they will want a person to hold responsible to pay back their money, so plan on putting your name on the line. If the deal is good enough and you put enough down they should loan to the company or LLC. My bank did and the nice part is it does not go on my credit report for a debt (as long as I keep paying), it shows just on the bness. So this way you wont have that extra mortgage on your personal credit if you try to take out something under your name.
I have a few credit cards out in the bness name and a LOC. Pay them off each month, and so they say it builds the business credit up. But like Tom said, they will want a person to hold responsible to pay back their money, so plan on putting your name on the line. If the deal is good enough and you put enough down they should loan to the company or LLC. My bank did and the nice part is it does not go on my credit report for a debt (as long as I keep paying), it shows just on the bness. So this way you wont have that extra mortgage on your personal credit if you try to take out something under your name.
That makes sense. How did you first establish your business credit to they offered you a business LOC? I have a secured business credit card but from my research they want you to have at least 5 accounts before the business gets approved for revolving credit. Ive been researching vendor credit as a way to build credit; get 4-5 of those and pay on time then graduate to revolving credit. Sounds about right?
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
8y
you need Tradelines.....you get them from Uline, Grainger, Staples, Quill and a few more places but it’s a process to get business credit without a personal guarantee. Google is your friend. So is myfico.com
Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
8y
@Pete Schmidt though your business loan doesn't show up on your credit, is it still represented on you taxes on the Schedule E? Every lender I've worked with has wanted to see at least 2 years of tax returns.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
8y
@Frankie Woods That's been my experience too. I have both commercial loans and seller financed mortgages, none of which show on my credit report. But they are on my Sch E and copies of tax returns are always requested.
Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
8y
@Tom S. Understand. I talked to a broker today, and they told me that even though it shows on the Sch E, it does not affect the Freddie / Fannie loan restriction because it is not held by them [more or less]. It's starting to make sense to me why portfolio lenders do not count towards your loan limit.
Rental Property Investor · Myrtle Beach, SC · Member since 2017 · 134 posts · 71 votes
8y
My business credit was created when I opened a checking account and a visa card through the bank. Then they continue to send offers of lines of credit and loans. I believe just about any business loan will require some type of guarantor though. It will show on the Sch E, but as long as the business is making money it shouldn't matter as much. I guess it depends on the type loan you are going for and if it matters. The one thing I have learned is having an 800 credit score does not make much difference. Most banks and lenders could care less about the score. They want to see cash flow and your income/debt in check.
Real Estate Agent · Sierra Vista, AZ · Member since 2016 · 23 posts · 6 votes
7y
The way I did it was go through the Business Credit Builder from Wise Guys In Ties: www.wiseguysinties.com...It was a pretty healthy investment but I was able to get a deal on it and the outcome was worth the investment. Good Luck to you!
The way I did it was go through the Business Credit Builder from Wise Guys In Ties: www.wiseguysinties.com...It was a pretty healthy investment but I was able to get a deal on it and the outcome was worth the investment. Good Luck to you!
Thanks, I'm going to check it out now. what deal did you get?
Real Estate Agent · Sierra Vista, AZ · Member since 2016 · 23 posts · 6 votes
7y
So I got their Business Credit Builder for $1,897.00...this included the Advisors, their loan officers, and coaches... I never knew Business Credit existed before them so for me it was worth the investment. The promise of $50,000 in 6-12 months was pretty appealing as well. :)
Specialist · Pasadena, CA · Member since 2017 · 133 posts · 86 votes
7y
@Rashad Jones Jennings I have a business line of credit through Chase. They looked at two years of tax returns for the business as well as assets of the business. My business is not real estate related, but I use the LOC to purchase real estate since I don't need the LOC for my actual business. The best way to increase your business credit is to increase your gross revenue. It's not like personal credit where if you spend more and pay it off they give you more credit.
Memphis, TN · Member since 2015 · 35 posts · 30 votes
7y
If you have good personal credit, leverage it to get business credit with a personal guarantee. Most cards like Amex and Chase that have 0% interest introductory offers from 6-15 months which allow you to purchase rehab and refinance within that timeframe. You can also consider business credit without a personal guarantee. I have a cash line of credit that did not require my social.