The real difference is that business credit will not be showing up on your personal credit report.
If you have business credit and it is showing up on your personal credit report then it really is not business credit after all. Many people think they’re getting a business credit card. Then it shows up on their personal credit report. It’s really just a personal card with a business name on it.
But it’s possible to get real business credit by using your tax ID number. There are a series of steps that need doing in order to reach this point.
There are only two credit applications that won’t reflect on your personal credit that don’t ask for a Tax I.D. number: Capital and GM. If the credit card applications do not ask for the tax ID number, you’re not filling out a business credit application.
You’re better off getting such “invisible credit,” because it won’t show up on your personal credit although you personally guarantee it to get business credit. In the future it will be unsecured, and guaranteed in other ways.
For example, if you get a line of credit on your home, the house is guaranteeing the loan, not you. By developing your business credit file you’re doing the same thing. Your business will guarantee the loan, not you!
Do you need to have good personal credit to get business credit?
This is one of the most frequently asked questions that we get and the answer is, yes!
But don’t be too quick to rule this out of your repertoire of opportunities to grow your business. You can learn how to get business credit whether you have good credit or not.
Getting business credit is like the old saying about making your first million. Making your first million is always the hardest. The second one is much easier. Once you do it once, you just repeat the process over and over again to make more money. The same is true for achieving success with business credit.
