Building Good Business Credit After Bad Credit

Can you establish good business credit if you have bad personal credit? The answer is yes...but with a few caveats.

Business credit reports and personal credit reports are generally completely separate databases for legal reasons. However, there are some exceptions in terms of how independent that information may be:

-- If you are operating as a sole proprietor or Limited Liability Company, it is difficult to separate your personal and business credit. A corporation is a much better structure to build a completely independent business credit report.

-- Experian sells a credit score that is a combination of the business owner's personal credit history and the businesses' credit history.

In the early years of a business, the owner will almost certainly be required to personally guarantee loans. However, as you establish a strong business credit rating for your enterprise, you'll have more leverage to negotiate for a loan without your personal guarantee.

A warning: some people try to use business credit file to repeat bad credit habits.

"I've seen people who ruined their own credit go out and start a business, enlist the help of people with good personal credit to be executives in the company, and get major credit cards. They didn't have a real product or service, and the objective was to just get credit. They would inevitably default on the corporate credit lines," says Erik Salmon, Director of Business Credit Services for Innovative Business Services (IBS) and an experienced business credit coach. If that's your intention in establishing a business credit rating, you're better off taking some personal finance courses to learn how to manage your money.

If, however, you legitimately want to make a go of a business, have a solid plan, and are willing to do what has to be done to get it off the ground, then you should let a bad personal credit rating stop you. Building or rebuilding good credit - whether it's personal credit or business credit - is a process. Be patient as you work on both your personal and business credit. The results will be worth it. For more information, visit www.businesscreditsuccess.com.

Gerri Detweiler is considered one of the country's top credit experts. She has been interviewed for thousands of radio, television and print newstories including USA Today, The Wall Street Journal, The New York Times, Dateline NBC and many others. She has testified before Congress several times and worked on reform of the national credit reporting laws.

---

Is Your Credit Score Costing You Money?

Most of us want a good credit report to obtain... Read More

Discover the Parts of a Credit Report and What They Mean

So you ordered a copy of your credit report to... Read More

Two Things You Need To Know About Prepaid Debit Cards

According to the September 2004 issue of the Nilson Report,... Read More

What Does Your Credit Say About You?

A credit report is more than just a snapshot of... Read More

Will Inquiries Lower Your Credit Score?

What are inquiries?When you apply for credit the creditor or... Read More

Building Good Business Credit After Bad Credit

Can you establish good business credit if you have bad... Read More

Credit Help For Renters And Others On The Horizon

Sue is a homeowner and pays her mortgage and other... Read More

When You Are Eligible For A Free Credit Report

By Federal law, you are entitled to one free credit... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

Your Guide On Choosing a Credit Card To Suit You

Reach into your wallet or purse, pull out a card,... Read More

Credit Card Security Advice

Which of the following is the biggest threat to your... Read More

How Your Credit Rating Affects You, and How to Check It

You might not know it, but every time you take... Read More

Its Your Credit - Take Care of It!

Thanks to the Fair and Accurate Credit Act, American consumers... Read More

Which Credit Bureau Should I Use To Check My Credit Report?

There are three main credit bureaus in the United States;... Read More

Identity Theft Exploding: Here?s How You Can Avoid Becoming A Victim

Americans are more concerned about identity theft than unemployment or... Read More

Credit Card Entrapment - The Secrets are Out

Have you ever wondered why your credit card bill is... Read More

The Credit Card Surprise That You Need to Look Out For

Companies that issue credit cards want to make a profit.... Read More

Finding Reputable Credit Card Companies

You're interested in getting the best credit cards for your... Read More

Taking Control of Your Credit History

Your credit history is important; in fact, in this day... Read More

Applying for Credit Cards Online

In the olden days, about 10 years ago, before the... Read More

Avoiding ID Theft and Credit Fraud

Article excerpted from the new book, "How to Do Space... Read More

The Best Strategy To Erase Credit Card Debt

Credit card debt is a growing sickness in the United... Read More

Understanding Your Rights Under The Equal Credit Opportunity Act

It wasn't all that long ago that lenders blatantly discriminated... Read More

What Happens When Your Credit Is Damaged? Do You Have Recourse?

The good thing about bad credit is that you can... Read More

Useful Tips When Choosing Credit Cards

Chances are you have received your share of "pre-approved" credit... Read More

How a Credit Card Can Be Your Friend

We have all heard countless stories of people over their... Read More

Fair Isaac Corporation Credit or FICO Score

As I am not from the US, I had no... Read More

What Is A Credit Report?

Even if you have heard of a credit report, you... Read More

Establishing Credit ? What You Need To Know Part 2

In my previous article "Establishing Credit ? What You Need... Read More

Home Loans ? Repair Your Credit Before You Buy

Before you take out a home loan or make any... Read More

FREE Credit Report Offer - Careful, It Might Carry Hidden Charges

FREE credit checks or free credit reports. What are they... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time... Read More

Finding What is on Your Credit Report

A credit report is basically a file about you kept... Read More