Page 146 - Winning The Credit Game Bundle (CK Patrick)

3. Just be sure not to mix in any personal transactions.
Using business credit cards for personal expenses is a
huge red flag for the IRS and credit bureaus and may
cause your business to be seen as too risky to lend to
or invest in.

Just like with your personal credit, there are more ways to
build business credit. Any loans your business eventually takes
out will determine how reliable your business is as a lender.
Businesses with prior histories of successfully paying back
loans are more likely to be granted bigger financing with better
interest rates in the future. However, I recommend that business
owners who are new to business credit use business credit cards
to build up their business credit scores and optimize their busi-
ness spending habits before applying for loans or other types of
financing.
Net 30 accounts are a low-risk way of borrowing money and
showing you can pay it back because you are in control of
exactly how much you charge on your business credit card each
month. You can charge just a small amount each month on
multiple net 30 accounts, showing that you can handle multiple
payments responsibly and so can be trusted with future larger
credit lines and financing.
On the other hand, loans and cash credit often involve
agreeing to pay a significant amount back to the lender monthly
on a long-term basis. This can be a struggle for new businesses
that are just establishing their customer base or aren’t used to
handling bills from lenders. So not only will a new business with
less credit history likely be asked to pay higher interest rates on a
business loan—newer businesses may struggle to pay off their
loans or high-limit credit lines on time which can harm their
business credit history.
Try working your way up to a business credit score of 160 or
higher through the maintenance of excellent personal credit and
the strategic use of business credit cards before you apply for a
loan or another type of high-risk financing. The more practice

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