Business Credit Card Explanation

First of all, every time you apply for a credit card, it does damage your FICO score due to the hard inquiries incurred. Typically, each inquiry will count 2-5 points against your score. However, if you apply for numerous cards at the same time, (all the inquiries will show), but your credit score will only get "hit" once for 5 points. When it comes to the use of personal credit cards, you need to keep one thing in mind. Every time your usage exceeds 30% of the available balance your FICO score will suffer. When and if you exceed 50% of the available balance, it will go down significantly. Unfortunately, many start-ups have trouble raising cash for their ideas and end up using their personal credit cards or take equity out of their homes. Their credit suffers and when its time to use their credit for other activities, they find they pay higher interest rates due to the risk, and many times get denied even though they pay their bills on time. Business credit cards, on the other hand, do not report to the credit bureaus. You can max out the available balance on a business card and your FICO score will suffer "no" ill effects. It's that simple. This anomaly in the credit card system is not widely known, yet it is just as easy to apply for a business credit card or cards. There are two ways to get business credit cards. Using your social security number and also using an EIN.

Using your social security number is the quickest way to get cards. Approval can be instantaneous and interest rates go from 0% to 13%. However, as stated above your bureau report will reflect the inquiries. Yet in these times, the need for cash is at desperation level and it isn't such a bad thing. Further, we have at our disposal credit restoration companies that can delete these inquiries rather quickly for a nominal fee. Get the card (s), have the inquiries removed, and no one is the wiser. Note that most, if not all, business credit card companies look for a FICO score of 650+ and an EIN number, nothing more.

Obviously, the higher your FICO score, the better the odds of approval and for higher limits. Using your EIN involves building business credit. This is done by obtaining small trade line accounts (using an EIN) that report to the business credit bureaus, and building credit over a 90-120 day period. Once you have built a Paydex score of 80+ and an Intelliscore of 75-90, obtaining business credit cards using an EIN in place of a social security number is easily accomplished. This, obviously, is a much better scenario than using your social security number but it does take time and does not satisfy your immediate need for financing.

Source by Todd Hornbacher

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