I talk a lot about the benefits of using business credit and why it’s one of the most crucial things to have when you start building up your credit.
And, while having business credit can open a lot of doors and a lot of opportunities, there are a few requirements that you have to meet before you start applying.
Let’s do a quick rundown on what your business credit requirements are and how you can meet.
What are the Requirements for Business Credit?
First and foremost, the number one requirement for business credit is ensuring that you have good personal credit.
Guys, I can’t stress and emphasize enough that your personal credit is the foundation for acquiring business credit.
It’s literally the backbone to everything that I’ve talked about when it comes to business credit.
Starting on the personal side, there’s a couple of requirements you have to meet:
0 derogatory marks
No debt collections or charge offs
No more than 1 late payment (99% and above with payments)
The above is the first step on your personal side, but there are a few things that can help to build up your personal credit so you’re able to access business credit.
One thing that helps is having between 4-5 primary accounts on your personal credit.
These can be a combination of the following:
Credit cards
Charge cards
Personal loans
Student loans
You actually get a higher approval rating if each of these accounts is at least 3 months of age.
This is also why you should avoid closing accounts.
Lastly, if you are able to become an authorized user on someone else’s account, especially one that is between 5-20 years of age, you should do so.
As I stated with the primary accounts, the longer you have an account open and the higher that limit, the better chances you’ll have at an approval rating when you start getting into business credit.
When to Apply for Business Credit
It is very important that you fulfill the above criteria before you start applying for business credit cards, as it gives you a far better chance of approval.
If you have any type of issue on the personal side of your credit or you’re just starting out building credit, this will take some time.
But, it’s better to take the time and get your personal credit in order, so be patient when it comes to fixing any negative aspects.
The better your credit file is, the better your position will be and the more borrowing power you’ll have once you start applying for business credit.
There are a number of personal credit cards you can get if you’re building credit and you can also look into getting a secured credit card, which also helps to build up your personal credit.
And, that’s it – four of the important requirements for gaining access to business credit. If you’d like to learn more or if you want to take that business credit further, make sure you join our growing community.