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Let’s talk about 3 of the most common business credit myths.
Myth #1: Business Credit Is Just Like Personal Credit
This sounds like it should be true, but it is not.
Yes, the credit systems are similar. But there are some major differences that can seriously affect your business.
For starters, the consumer credit system is prone to errors and tends to resist the correction of any errors.
The business credit system is different. It is less prone to errors and when there are legitimate errors, it tends to be easier to correct them.
Business credit is faster to build then personal credit.
Myth #2: It Does Not Hurt To Use Personal Credit In Place Of Business Credit
This is a problematic way of thinking that can lead to big problems down the road.
Using personal credit for business purposes puts your personal credit and personal lifestyle at risk
By doing so, you also limit the resources available to your personal lifestyle and to your business.
For example, you need to purchase a house or a buy a car but you cannot because your credit score is too low because the debt your personal credit is caring for the business or you debt to ratio is too high to purchase the car or the house due to the personal debt you have compared to your income.
No matter how you spin it, in the end using your personal credit for business is a bad idea especially if it is long term.
Myth #3: Business Credit and Personal Credit Are Not Related
Using your personal credit for business use is a bad idea.
But in the beginning, we may not be able to 100% separate business credit and personal credit.
Often, especially when starting out with business credit, a company owner must provide a personal guarantee for the business credit/ loan, the goal is to do this for a short period of time if it is done.
For more FREE tips on how to build business credit go grab your FREE “4-Step Guide On Building Business Credit” at www.exclusiveprocessingandconsulting.com.
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About the Author
Kimberly Lewis is currently the CEO of EPC Solutions LLC. She specializes in helping business owners establish excellent business credit scores and then leveraging those scores to access credit and cash for their businesses. For more information on business credit scores, business credit and business loans visit https://epc-solutions.net.