Business credit is not tired to personal credit; done correctly, it’s based on your EIN. That said, you still need good personal credit in order to be deemed credit-worthy for good business credit cards.
The process of building business credit is not difficult but does take a little time and some understanding of the process.
Forbes.com has a good article titled “How To Build Business Credit In 6 Simple Steps” to get you started. However, it’s important that you follow some pretty basic rules, the first of which is to not get excited about your ability to get new credit cards, and end up in debt by accepting and using too many.
Be smart and do the groundwork first: learn which cards are considered Tier I, Tier II, etc., which cards report to which credit bureau(s), what score each bureau is looking for, and the payment date of your card. Getting the cards in order by Tier and paying on or before time is paramount!
Businesscreditbuilder.US has lots of videos on YouTube that may clear up some of your questions as well. I didn’t use this guy so I can’t speak to whether or not it would be worth paying for his training, but I subscribed to his site, read his email newsletters, and listened to enough of his YouTube videos to know that he covers the same areas I just outlined. Not sure how much he charges for his entire course.
Unfortunately, the young lady who built my business credit has moved on to her true passion project (owning farm land and growing her own produce), and says she’s unsure if she’ll go back to credit building.
The one thing I’m not really fond of with the busines credit builder guy is the continued emphasis on the ability to get 250k in business credit without using your personal credit. Whent he pandemic happened a lot of people who had small businesses applied for pandemic funds, went buck wild shopping with those funds ( a guy in my area bought a lambo (??) using his business credit) and pandemic relief money. I read about his arrest (and several others) in our local “Nextdoor” community newsletter!
While it’s true that you can build your credit to gain access to that kind of money, a newbie could easily get focused on the wrong thing, go crazy with applying for credit, and end up in a boatload of debt unnecessarily.
Keep your personal credit straight, take your time and learn the business credit buidling process, and be smart about using your personal AND business cards according to recommendations.
You’ll be happy you did!
You’re welcome.
I hear you on the sea of voices churning out information on the subject matter; it’s pretty much like that about everything nowadays.
This should have been among my top answers but somehow, it slipped my mind: The SBA!!
You might want to call your local Small Business Administration and see if one of the SCORE mentors will point you to a reliable source! While it will be reasonable (if there is a cost at all - because their counseling is usually either free, or at nominal cost), you’ll know you’re getting bonafide and reliable information.
I’m sure you’ll be given good direction from this source!!