As your entrepreneurial spirit shines through and you embark on your new venture, it is important to separate your business and personal credit. A mistake many new business owners make is using their personal credit to open lines of credit for their startup. Using your personal credit history can be problematic for several reasons. Not only will it increase the number of inquiries made to your personal credit profile, but it will also prevent your business from building its own credit.
Establish an Identity for Your Business
You need to register your business with state and local governments in order to begin building credit for the entity. A sole proprietorship can register in the form of a DBA (Doing Business As). However it may be more prudent to register as a Corporation or LLC (Limited Liability Company), which decreases the liability of the owner and adds more separation between business and personal finances.
Regardless of how you register your business, it is important toRead More »from Building Business Credit