Step 18. Optimize Your Personal Credit

Up to this point, all the step you have taken involve your business entity. But your personal credit still matters in business loans. Your personal credit can play a crucial role in your ability to get various lines of credit, especially during the initial stages of your business.

Using Personal Credit to Enhance Your Business

The top reason for working to build business credit is so you don’t have to use your personal credit and everything is separated from your personal finances. You are on your way to this phase, but you may have to use personal credit to get started.

Building a quality business credit profile allows you to secure vendor lines of credit, as well as credit cards, fleet cards, leases, and many other business opportunities. However, there is a formula that you need to understand.

When seeking loans for your business, the owner’s personal credit can make a difference. In most cases, 720 or higher is considered a strong personal credit rating. If an owner of over 15% of the business, or a corporate officer, such as a COO or president, has personal credit over 720, many financing opportunities are made available, with potential for lower interest rates and better approval chances.

Banks and business lenders are currently looking at both personal and business credit. If the business has a strong credit foundation with a long history, the lenders will likely look at business credit only. In fact, you can have 10 to 100-time more credit capacity if you use business credit as opposed to personal credit. However, personal credit can still make a difference.



  • To Do 1 – Verify Your Personal Credit Scores

    You should separate your personal and business credit, which will protect owner assets and credit ratings. Ensure your personal credit reports and scores are used properly by first checking all three of your personal scores with the three major agencies. You can check this information by using Annual Credit Report or ProCredit 3 In 1 Credit Report and Score.

    By fully utilizing your personal credit, you will have more available capital and resources, increasing your chances of higher credit limits, better ratings, and affordable terms.



  • To Do 2 – Build Up Your Personal Credit

    If you plan to apply for business financing in the near future, you will need to have at least a 680 personal credit score. If your personal credit is low and you need to add some positive credit, use this link and you’ll get information on adding your name as an Authorized User (AU) on one high limit cards to your personal credit. Adding 2 or 3 credit lines should be enough.

    To add tradelines to your personal credit  CLICK HERE



  • To Do 3 – Build Up Your Personal Credit With Rent

    Rental Kharma can help you build credit fast by reporting your past and ongoing rental payment history on your credit report. It’s an easy signup process and you can add your last 24 month rent payments to your Experian, Equifax, and Transition credit report and build positive credit history.

    To get started building your personal credit score with the rent payments you pay  CLICK HERE



  • To Do 4 – Correct Errors On Your Credit if Needed

    if you see inaccuracies on your credit report you can utilize legal service experts at Lexington Law that will with you work to help you repair your bad credit report and scores. This service has a low and affordable monthly fee. For as low as $79.95 a month you can optimize your personal credit.

    Improving your personal credit score will take effort and time. There are 3 main areas that you should focus on immediately to make the most positive impact on your credit score. They are:

    Decrease your debt usage until it is below 30%
    Pay on time every time, especially for the next 5 months
    Correct errors on you credit profile related to negative accounts, late payments, inquiries, outdated information, judgments, charge offs.

    To find out more on how to optimize your personal credit  CLICK HERE

     

To Do List To Complete In This Step

1. Pull your credit scores from the major agencies. e Same

2. Optimize your personal credit by adding tradelines.

3. Correct errors and inaccuracies on your personal credit if needed.

Personal Credit
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