Personal credit should be used sparingly when operating a business.
By limiting the use of the business owner's personal credit in the business setting, you may be able to maintain or even improve your personal scores.
While it is not always necessary to provide your social security number when obtaining business credit in your businesses name, you are often asked to provide your social security number to obtain credit, leases and even moving into your office.
We have seen small business owners who after just 2 years of starting and running their business saw their credit score drop from 750 to 650 with no changes in how they pay their bills and no new personal credit accounts were established.
Credit scores are calculated based on a typical consumers credit habits.
Business owners however are not typical consumers.
They have more than the average number of inquiries in a year and carry more debt than the average consumer.
This automatically works against the business owner and lowers their personal credit scores.
It is very important to start building your business credit file with D&B and Corporate Experian when operating your own business.
This will enable you to expand your existing business and protect and enhance your personal credit rating.
The first thing you need to do is establish your business entity, whether it is a corporation or LLC.
You can start by going to your own state's Sec.
of State's website and incorporating yourself online.
Next obtain your employer identification number and obtain your business phone number and 411 business directory.