Yes, you’ve read it correctly. There is a way to resuscitate your ailing personal credit rating through a perfectly accepted and legal means – by getting a business credit card!
For small business owners or work-at-home entrepreneurs, getting a separate business credit card for business-related transactions and expenditures may not seem necessary. At first glance, it would appear that their time-honored personal credit cards can still serve the purpose…but when payment for invoices get delayed or you’re required to purchase more and more products for your business – that would be probably be the only time you’ll realize that you do need a business credit card after all.
One of the advantages of owning a business credit card and keeping company expenses separate from your personal ones is that business credit card reports are submitted to a different credit rating checking entity - thereby building a separate credit score for the company or small business under your name.
Be forewarned however, as a business credit card can work either way.
What do I mean by this? Americans, for example, are able to access their personal credit history from at least three major credit bureaus: Equifax, TransUnion, and Experian. These lead agencies compile your credit history for the past year and are mandated by law to provide you with a copy, should you want to get your credit report.
A credit report check adds to a person’s financial protection. It keeps them organized and focused on how their current credit (good or bad) ultimately affects how banks and other financial institutions would be treating them a few years down the road.
For small business owner or home-based entrepreneur, securing a business credit card will give you a separate and new credit history via your small business. This is especially beneficial if you’re trying to get back on track or redeem yourself from a previously negative credit rating.
Before your new credit history can work in your favor, you must first register with a licensed and legitimate business credit bureau the likes of D&B or Experian – the process will initialize the beginning of your company’s business credit history.
Earlier I mentioned about a business credit card working affecting your credit rating either positively or negatively. You must be careful when using your business credit card for big or expensive purchases. Another tip to boost your credit rating via a business credit card would be to take note of your business credit card’s due date and promptly settle all your balances at the soonest time possible.
You never really know when your business would need extra capital or a fresh infusion of funds to fuel expansion The new credit history generated by your business credit card could eventually help you secure a loan approval pretty easily.
A background check on your business credit card usage and payments would reveal all kinds of activities – and the merits of those would have a bearing on the rates and terms of the loan being extended to you.
To sum up, business credits card have more to offer than simply separating personal and corporate expenses and charges. You also have a chance to redeem your personal credit score with the new credit history built around the activities of your business credit card.
Tags: Boost Your Personal Credit Score, How Business Credit Cards Can Help