How to get business credit cards that don’t impact your personal credit

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How to get business credit cards that don’t impact your personal credit

Published By Janet Gershen-Siegel at August 30, 2017


When you consider the difference of your business credit score vs personal credit score, keep in mind that any inquiries into your personal credit score are going to negatively affect that score. And a lot of merchants and lenders will perform inquiries when they are doing business with you for the first time. You do not want their inquiries to be affecting your personal credit.

Get a DUNS number

You can’t get into Dun & Bradstreet’s system without one, and they are free, anyway. A DUNS number differentiates your business from all others, including similarly-named businesses. Dun & Bradstreet has a requirement that you register your small business on their site before they will hand out a DUNS number. Please note: there are a few slightly different methods of getting a DUNS if your business belongs to a special class  These include if your small business is a US government contractor or grantee, or your company is Canadian, or you are working as an Apple developer.

File a DBA

If you operate your business as a sole proprietor at least file for DBA (‘doing business as’) status. If you do not, then your personal name will ends up being the same as your company name. As a result,  you can still end up being personally liable for all your business debts. Plus, according to the Internal Revenue Service, with this structure you have a 1 in 7 chance of an IRS audit. This is in contrast to a 1 in 50 chance for incorporated businesses! Avoid confusion with this step, and you can significantly lower your chances of an IRS audit. And who doesn’t want that?

Go one better than a DBA and make your business as a separate legal entity by way of incorporation

Have a meeting with your tax advisor or financial planner in order to determine which legal entity (sole proprietor, LLC or S-Corp) will best fit your small business and particular financial situation. Incorporation can also help to protect your personal assets in the event of a lawsuit. Once your corporation or LLC is registered on your state’s Secretary of State’s website, you can then get a Business Federal Tax ID Number, so you can open your business’s bank account

Get an EIN (Employment Identification Number, also known as a TIN, or Tax ID Number)

The IRS makes it easy to do this. You can apply online as soon as you determine your eligibility.

  • Is your main business located in the United States or in U.S. Territories?
  • Is the person who is applying online in possession of a valid Taxpayer Identification Number (SSN [Social Security Number], EIN, or ITIN [Individual Taxpayer Identification Number])?

If so, then you’re good to go.

Start business checking and savings accounts

Have a conversation with your local bank about getting business checking and other accounts. If you have been a loyal customer on the personal side of things, and you can show your small business is paying its bills on time, then your bank is going to be a lot happier lending to your business.

Apply for appropriate bills through your small business

These are really any bills which are the direct responsibility of your company (or, at least, they should be). These include everything from Wi-Fi in your business’s name to rent or a mortgage for your office space. Your business could pay a cell phone provider or even the oil or gas bill, if that is appropriate. Your company will see credit scores rise as you pay the bills on time.

Enhance the professionalism of your small business and keep your personal and business credit separated.

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