Truck financing - do high limit credit cards help?

ERm./.. you might be buried in spam mail soon enough.

I had a friend who went into business selling hotdogs with a trailer etc. (I kid you not, he turned over 6000 a month cash in the summer time... at the industrial park ...) they buried him in spam. First it was the PO Box that got stuffed. Then a postman showed up with a crate this big filled with spam for him a year into his business operations.

A credit card is really tough for personal use at anywhere from 7% interest all the way to 35% and beyond. (I hold a couple 30% cards... which are fixing to be disposed of...) and for business use you want to be very careful who provides your line of credit.

Another friend of mine operates his own shop, has been for decades. Every time one of the customers uses a credit card for a purchase he loses about 3% of the total purchasing in fees to process that sale with the customers CC. I don't use any CC with him, cash only.

If you are a business, eventually you will hold lines of credit in different forms. Not just a credit card.

 

How do you start you business credit?

 

You start business credit by incorporating your company, (you must be a legal entity in order to have business credit) making your company completely separate from yourself. You will want to have an EIN number, open a business checking/saving account, have a commercial address and business phone number, you should also consider building a website and establishing online listings this is something that lenders DO look for. Then you want to try and find credit cards that require a personal guarantee but only report to the business credit bureaus. Lastly, you will also want to find vendors who report to one or all of the business credit bureaus so you can build credit scores for your company.

It's important to know that business credit is reported 100% separately than personal credit, there are fewer regulations on business credit as well. For instance, anyone can pull your business credit without your consent or knowledge. So it is in your favor to build and maintain the best scores/profiles possible.

 

Why wouldn't you want them to report on your personal credit report as well as you business credit report?

 

It's not "bad" for it to report on personal credit, but many business owners want to completely separate the two to limit liability. If your business CC / line of credit / loan is linked to your SSN and you happen to go out of business or become unable to pay debts, you'll be both liable for the debt and the negative information will destroy your personal credit, as well as, your business credit.