How to Get Business Credit With Bad Personal Credit

Bad Personal Credit

Are you starting a business but are unsure how to get business credit with bad personal credit? This can be a huge disadvantage if you can’t even get a business loan for bad credit. What happens if you want to buy expensive items such as equipment or office furniture?

Managing a business successfully is all about qualifying for as much credit as possible. It allows you to expand rapidly, grow as a company, and more. However, if you don’t have impressive credit, you’ll have to put in extra work to get a solid reputation among some lenders.

Many people will turn down opportunities to help a business grow; it’s a shame but true. Here’s what you need to know about how to get business credit with bad personal credit.

Secure a Small Business Credit Card

If you have bad personal credit and are looking to establish business credit, one way to do this is to apply for a small business credit card. When applying, you will be asked to provide documents such as:

  • Business License
  • Certificate of Incorporation
  • Bank Statements
  • Tax Returns

To be successful, you should have a good business plan and solid financials. For a security company, providing a service portfolio and billing customers on time could help establish a good business credit rating. Additionally, it is important to make sure you can carry the debt and pay off bills promptly.

Ensure that your bills are paid on time and your limits do not exceed your ability to pay off the debt. Once approved, small business loans and other lines of credit may become available if you can maintain a healthy ratio of credit utilization.

Use an Authorized User Strategy

If you have bad personal credit but need to obtain business credit, one strategy to consider is the use of an authorized user strategy. This involves having a family member or someone close to you whose credit is in good standing to add you as an authorized user to one of their existing lines of credit.

By becoming an authorized user, you can establish business credit without a personal guarantee, since technically the line belongs to the authorized user. You will want to ensure that the authorized user reports the account to the credit bureaus so that it is listed on your credit report.

You may need to have an authorized user sign a document that allows you to use the credit line in the name of your business. The most important thing to remember is to make the payments on time. This will help establish your business credit, separate from your credit, over time.

Ways How to Get Business Credit With Bad Personal Credit

For businesses that may have bad personal credit, building business credit can help startups acquire the needed capital. With consistent and responsible business credit-building practices, companies can create successful business relations with lending institutions. Take action now and start how to get business credit with bad personal credit today by researching financial institutions and consumer reporting agencies.

Now that you’ve learned all about getting business credit with bad personal credit, what’s next? Keep browsing Business Phobia for more great tips and recommendations!

Last Updated on July 21, 2023

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