"An investment in knowledge pays the best interest." - Benjamin Franklin

Introduction:

Many people need help understanding the consumer credit system, and I need help understanding the business credit system. Today, I'll cover some common business credit myths and explain what can be learned from them.

By understanding these methods, you can make informed financial decisions that align with your business goals, feeling confident and in control of your business's financial future.

Three Business Credit Myths Debunked

Myth #1: Business Credit is Just Like Personal Credit This sounds like it should be accurate, but it isn't. Sure, the credit systems are similar. However, some significant differences can seriously affect your business. For starters, the consumer credit system has, both in court and in congressional testimony, been shown to be fairly anti-consumer. The system works against consumers often. It is prone to errors and tends to resist the correction of any errors by consumers or their advocates. In one example, even after a credit bureau lost in court, they continued to refuse for months to remove incorrect information from the person's credit reports. The business credit system is different. It is not anti-business (or anti-consumer) and is less prone to errors. And when there are legitimate errors, correcting them tends to be more accessible.

Myth #2: It Doesn't Hurt to Use Personal Credit in Place of Business Credit This is a problematic way of thinking that can lead to big problems.

Using personal credit for business puts your credit at 4 © ️2023 Credit Suite, all rights reserved. No reproduction or use of any portion of the content or work or the entire work is permitted without the publisher's express written permission and authorization. However, the publisher of these materials routinely approves the reproduction or use of this work, in whole or in part. If you would like to use any portion of this material in a book, article, e-zine, newsletter, radio, television broadcast, podcast, or in any other seminar teleconference or other events or publications, please email or call the distributor of this guide—articles for Posting risk for the sake of your business. By doing so, you limit the resources available to you personally and to your business. The result could be disastrous.

Imagine when your business credit needs exceed your credit capacity. Then, it would help if you used your credit, and you can't because your business ties it up. No matter how you spin it, in the end, using your credit for business is a bad idea. Myth #3: Business Credit and Personal Credit Are Not Related. Using your credit for business use is a bad idea. But we can't 100% separate business credit and personal credit. Often, especially when starting with business credit, a company owner must provide a personal guarantee for the business credit loan or line of credit. When providing a personal guarantee, the company extending credit will not only check your business credit. They will check your personal credit history. While the business account won't appear on your credit report, the personal guarantee could eventually affect your credit if it fails to meet its obligations. Aim to avoid that scenario (and you can) with careful planning and intelligent use of business credit.

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