For a newly registered business, you'll be using your "personal" credit score to get the credit. You will need to sign for the credit card personally so that if your business goes under, they still get paid.
Your idea of opening a business card to increase your credit score is not a sound one.
Business plastic might not show up on
your personal credit history. While
some issuers report business accounts
on a consumer's personal credit
history, others don't.
This cuts both ways. Some
entrepreneurs want business cards on
their personal reports, believing
those nice high limits and good
payment histories will boost their
scores. Other small business owners,
especially those who keep high running
balances, know that including that
credit line could potentially lower
their personal credit scores even if
they pay off the cards in full every
month.
There is one instance in which the
card will show up on your personal
credit history: if you go into
default. You're not entitled to a
positive mark, "but if you get a
negative mark, it will go on your
personal report," Frank says.
And some further information related to evaluating a business for a credit card:
If an issuer is evaluating you for a
business card, the company should be
asking about your business, says
Frank. In addition, there "should be
something on the application that
indicates it's for business use," he
says. Bottom line: If it's a business
card, expect that the issuer will want
at least some information pertaining
to your business.
There is additional underwriting for
small business cards, says Alfonso. In
addition to personal salary and credit
scores, business owners "can share
financials with us, and we evaluate
the entire business financial
background in order to give them
larger lines," she says.
Anticipate that the issuer will check
your personal credit, too. "The vast
majority of business cards are based
on a personal credit score," says
Frank. In addition, many issuers ask
entrepreneurs to personally guarantee
the accounts. That means even if the
businesses go bust, the owners promise
to repay the debts.
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