Is business credit linked to personal credit? There are many instances when people ask that question. They understand that there is a correlation between their personal credit and their ability to get loans for their business. Yet, they do not understand how this is possible. To begin with, the way people obtain credit has changed dramatically over the years.
In the past, a business owner could obtain either a business credit or a personal credit loan. Typically, they would receive the same type of loan, which was based upon their individual credit score at the time. For example, if someone had excellent credit then they would be able to get a low interest rate personal loan. Conversely, if they had bad credit they would not be able to get a loan that had a great interest rate.
Today, it is very difficult to find any type of unsecured loan that is business credit linked to personal credit. It is even more difficult to find good rates on these loans. This is because the companies that are making the loans are requiring much higher levels of credit score in order to obtain financing from them.
Most people can see the potential for building credit through their employer if they have a history of excellent credit. However, this is no longer the case. Today, an individual must have a fantastic credit score in order to qualify for a loan from a company that is seeking to issue a business loan. A person that has poor credit is usually regarded as a bad risk by these lending companies. As such, they are going to have higher interest rates for the individual.
Does business credit link to personal credit? Today, getting a personal loan is much more difficult than obtaining a business one. If you want to obtain a small business loan, then your credit score will be very important to the lender. The truth of the matter is that business credit is very different than personal credit.
The reason why business credit is much more difficult to obtain is because there is no one accountable for ensuring that the money is paid out to the individual. When an individual applies for a business loan, their company essentially acts as the money lender. Therefore, if the business does not make its payments on time, the lender will ultimately be responsible for those payments. This is not always the case with personal credit. The individual generally keeps track of their payment history and makes sure that payments are made on time in order to maintain a good credit rating.
Is business credit linked to personal credit? Unfortunately, it is. In order to apply for a small business loan, the lender is going to require a great level of credit score for approval. The only way to get a good score is to have a good business plan, reliable income and good references.
Are you afraid to apply for a small business loan because you have bad credit? Do not let this stop you! There are many lenders out there who offer loans to people with bad credit. You can find a lender who is willing to approve you for a business credit account but you are going to have to pay a higher interest rate. However, if you . . . . . . are a business owner who is serious about growing your company and expanding it, then business credit is something that you simply cannot afford to overlook.
Is business credit linked to personal credit? It very well could be, depending on the type of credit score that you have. For example, if you have excellent credit score but you have a bankruptcy on your record, then lenders will probably be more reluctant to lend money to you. On the other hand, if you have poor credit score and you start applying for a business credit card, then you more than likely will be approved.
Is business credit linked to lifestyle? Absolutely not. For example, if you are a business owner who travels a lot, then you can obtain a business credit card that offers frequent flyer miles. This can enable you to take cheap flights around the world, taking you business to many different destinations at a much lower expense.
Is business credit linked to personal credit in other ways as well? In one way, it might be. You can apply for an unsecured business credit card even if you have poor credit. This is because lenders are willing to give you a chance despite the fact that you do not have a great credit score. However, this opportunity will come at a high interest rate – because of your personal credit score. Therefore, you have to decide if the cost of obtaining an unsecured business credit card is worth it in order to take advantage of all the discounts that are available.