How can business credit help personal credit scores? That's a question many consumers keep asking as the credit landscape has become increasingly competitive. The number of lenders competing for the business of borrowers has increased as the economy has faltered. Lenders are fighting to win over more business, and some are going well out of their way to put up barriers to entering into commercial and residential accounts.
To improve your personal credit score, you need to have an excellent credit history, and that means having paid off any debts you may owe. You also need to keep your balance low, as that helps to show lenders that you're responsible. If you have a lot of credit card debt or other high interest debts, that is going to hurt your credit.
One reason that business credit can help personal credit scores is that business accounts tend to be less likely to be accessed than individual ones. This is because business owners pay out more in expenses and therefore get a better return on investment than do self-employed people, who tend to divert most of their income to overhead costs. A business account can thus help increase a person's credit score.
Business credit cards offer a number of perks that can boost your score. They offer higher credit limits for larger purchases, usually at a discount for business accounts. They are also reported to the credit bureaus as accounts open and closed. Both positive and negative activity on accounts will have a bearing on a person's credit score, so keeping them in good standing helps one's financial picture.
How can business credit help personal credit scores? The answer depends largely on how much you use your business card. If you don't use it at all, it won't have much of an effect, because it's not an active account. But if you use it a lot and outstanding debt build up on it, lenders may look more favorably at your personal credit score. One of the ways they can do that is by reporting your business debt to the credit bureaus as opposed to just reporting your credit card debt.
There are other perks to getting business credit cards, too. For example, they can help you build your business reputation, which can have a positive effect on personal credit. Having positive information reported to the credit bureaus can boost a person's score, which is important if building a bank account and retirement fund. It's also important for the business credit line to go towards something you'll be using, such as supplies or equipment that you'll need on a regular basis.
To find the best business credit cards, it's helpful to search for them . . . . . . online. Here, you can find what each card offers and compare it to other perks that each has to offer. Don't forget to look at the fees and interest rates, too. After all, they can either be to your advantage or against it.
If personal credit isn't doing too badly, you may want to consider applying for a business credit card instead. They can be useful in boosting your personal credit, too. There are plenty of options to choose from, so you should feel fairly confident about it. Just be sure to check out all of the perks and look closely at the annual fee, too. The fees and interest rates are what make business credit cards different than ones for individuals. They can help you get ahead, but you have to pay attention to exactly what it is you're getting with the credit card you get.