Would a small business credit card work for my business?

Woman Uses Small Business Credit Card To Run Her BusinessWhen you own a small business, it is important to separate as much of your personal credit as you can from your business credit. The reason for this, according to the US Small Business Administration, is that if things go wrong for your business, then your personal credit will be affected as well. As such, a small business credit card is an excellent choice.

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Small business is the backbone of America. However, many small business owners do not take the necessary steps to separate their business from their personal assets. When this happens, a lender or a creditor can go after your personal assets to pay off your business debt. Separating your business and personal debt can offer you protection in worse case scenarios!

What kinds of credit cards are available for small business?

Just like with personal credit, you have the option of Visa, MasterCard, Discover, or American Express for your business. In addition to these major names, you will also find that there is a variety of cards within those cards.

For example, each of these companies offer rewards credit cards for businesses, low interest credit cards, instant approval credit cards and more. You will also find that most offer credit cards for businesses that have little credit or bumpy credit, however, they don’t offer bad credit credit cards for business.

Do credit card companies want my social security number when I apply for a credit card?

This is a good question for new business owners who have never applied for business credit before. The answer depends upon how you have set up your business. If you have it tied into your personal finances, then you will have to provide your social security number.

If, however, you have an EIN number, then you will not have to provide your social security number. The creditor will ask you some questions about your business to help determine your eligibility. They will also want to know whom you are banking with and they will check the status of your account and your standing with the bank as part of the eligibility process.

Where does a credit card company look for my credit score?

The thing is; there isn’t a single standard for creditors when it comes to actually checking your business credit score, which can range from zero to one hundred. With personal credit, creditors use three major institutions. When it comes to business, there are several that they might or might not use, which is why they also require so much other information about your business.

Some of the reporting agencies a company might use to check your business credit score are:

Dun and Bradstreet is certainly a go to company for creditors, but often it is only used when very high limits are being set for credit. What’s more, D&B is often only used by large companies when considering extending a line of credit to a customer.

How do I establish credit for my business so that I can get a business credit card?

Establishing credit and a good credit score for your business can be tough according to the US Small Business Administration. Credit isn’t established strictly through credit card use. Instead, your credit is established by doing business with companies who report your accounts in good standing with various business credit reporting agencies, such as D&B.

Of course, you can establish some credit via business credit card use, but sometimes it is difficult to find a credit card company that will provide an unsecured business credit card to a new business or to a business, that doesn’t have established credit in place.

When you work with a vendor, especially a vendor that extends you a line of credit, ask where they report your good standing to. If they tell you that they don’t report this information, consider using a different vendor. Of course, you can also ask your vendor to start reporting your business practices so that you can get some business credit established.

Getting a loan from a bank and paying it back in a timely fashion is an excellent way to establish credit for your small business. Many banks are willing to invest in a small business based on your personal information and, of course, a great business plan.

Once you get the ball rolling and you continue to maintain good credit practices, you should have no problem expanding your credit appeal to creditors.

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