Is it possible to build business credit with a small home-based business?

I have a small e-business, and I would like to know if it’s possible to build a significantly high level business credit score?
Also, can you build a business using business credit?

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8 Responses to “Is it possible to build business credit with a small home-based business?”

  1. Beancounter said:

    You can absolutely business business credit with a home-based business. http://www.thexbanker.com is a good source. I don’t understand your second question. Can you clarify?

  2. Don said:

    You don’t need business credit for a home based business. You need personal business. The only time business credit is an issue is if it is not a home based business and you have assets such as equipment, inventory etc. Otherwise good personal credit is all you need to start a small home based business. I know I have done both.

  3. home-business-mentor said:

    The answer to your first question as to whether it is possible to build business credit with a small home based business, is a resounding YES!

    Of course in order to do so, you need to establish your business as a legal entity. You will want to set up an LLC or S Corp, then apply for your EIN/TIN ( interchangeable for Employer Identification Number/Tax Identification Number)…This step is important, as it identifies your business as a separate entity…and you will use this number when you apply for credit.

    Question 2:
    There are a number of ways to build a business using business credit. One of the best, is to take the necessary
    steps to starting a business, then apply for a line of credit, under your new business name. There are a number of ways to accomplish this feat, however, the best is to apply for a credit card using your business EIN/TIN….The best rates are offered by ADVANTA PLATINUM…at 0% for 15 months, then a fixed rate of 7.99%..I haven’t found any bank that will make an offer that good!

    A little known secret to building business credit this way is that your personal credit report will not reflect the amount of this credit line. You really are building business credit for your home based business and leveraging your personal credit as well.

    Good Luck

  4. Initial Underwriting Group said:

    A true business credit card is a line of credit that is taken in the name of the business, under the business’ credit. Activity, whether good or bad, is reflected on your business’ credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business.

    However, some companies out there offer “business” credit cards which they require a person guarantee for. These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts – you are.

    When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee. By ensuring that your credit card is in the name of your business, you can help to build your business’ credit, while avoiding creating problems with your own.

    Many companies offer a list of credit cards that are issued under the business name only. Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo. Search for “strong business credit” (just like that in quotes) to find services that sell the information.

    Good luck,

    Ilya Bodner
    Small Business Owner
    Initial Underwriting Group

  5. greatdeals209 said:

    Yes it is very possible. I have written about how to get started in my business credit blog: http://www.explodebizcredit.com/creditblog/

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