Page 84 - Winning The Credit Game Bundle (CK Patrick)

72 THE CREDIT GAME

business school—you can see how you can rapidly build hundreds or
millions of dollars for your family and community.
This process begins with building great personal credit. Just like
with personal credit, business creditors and lenders will look at your
payment history to determine how much they can safely lend you, at
what interest rate, and what kinds of collateral in terms of assets they
may require you to put on the line in order to approve your loan.
When you are first starting out securing business credit, your personal
credit score can be used to determine these factors. This can also be
done separate from your personal credit by obtaining credit using your
business Employer Identification Number also known as an EIN.
Once you have established the basic forms of business credit, you
will want to focus on developing positive payment history for your
business. Your business has a separate credit score from your personal
credit, and that is how you build it.
This is an incredibly powerful tool. It means that, for example, if
your business fails due to unforeseen circumstances, its unpaid bills
may not affect your personal credit and your personal ability to get
home loans, low interest rates, etc. at all. This powerful separation can
also work in reverse: if a personal disaster means that you have to
declare personal bankruptcy, your business may still be able to obtain
big loans and low interest rates as long as your business has been
paying its bills.
Separating your business from your personal credit and finances
will require incorporating your business as a separate legal entity from
you as an individual. Your business will then receive an Employer
Identification Number—the business equivalent of a Social Security
Number—and will file separate taxes for you as an individual.
This may sound like a hassle, but it is not as intimidating as it
sounds. Anyone can incorporate an LLC and begin applying for busi-
ness credit cards to begin building business credit.
It’s important to incorporate your business for other reasons
beyond your business credit score. Corporations may sometimes be
eligible for special tax breaks, grants, and other programs that individ-
uals cannot qualify for.