First time buyer?

Question

I had a business with a friend and we used each of our names to get credit cards in the name of the company.Since I have lots of balance on my card(for the company), can it in anyway affect my personal credit rating in determining my credit score for loan as a first time buyer

Answer 1

No, your corporate account is measured seperately. They do this to protect your personal finances. If the company turns belly up you won't be blocked from personal loans. Also, if your company is sued or whatever you can not loose your home and personal belongings, only those that the company owned.

Answer 2

Absolutely this will affect your credit rating, unless you applied for credit in the corporate name, without personally guaranteeing the credit cards. Sounds like you and your friend each got a card and started working your company. Nothing wrong with that, but any balance you carry will be reflected on your credit report/rating.

The thing you really need to worry about when applying for a loan as a self-employed person, is how long have you been in business, and can you provide financial statements proving what you're earning? If less than a year, it's going to be tough. You can get a stated income loan (the lender doesn't verify how much money you're actually making), but you have to make sure you can afford the property. No sense in getting approved just to get foreclosed upon in 6 months.

And Janet above is completely wrong, unless you have set up an LLC or S-Corporation to protect yourself. If you and your buddy have just decided to run a business, and haven't set up one of the above, you really should see a CPA or attorney, or both, and get set up for protecting yourselves, your assets, and your company. You'll save in taxes more than the fees for the set-up and consultation within one year.

Good luck to you!

Answer 3

9 times out of 10 it will effect your personal credit rating. When ever you use your social security number for any financial transaction for credit and that agency reports to the credit bureau then it will effect you. You may be doing a lot for your business as far as securing it's financial position but debt to income is a primary reason for credit denial. Hopefully once the business is fully established and stable then it may be in a position where credit cards can be issued just based on the business's portfolio. Your business accountant will be a better person to address that question. Good luck.

Answer 4

It will report on your credit report and you will need to show your loan officer proof that the credit account has been paid with funds from the business and not your personal accounts. Other than that it shouldn't be an issue.

If you have any further questions you can write me after the holiday at [e-mail]

Answer 5

It shouldn't matter, if you have established good credit by having the credit card. Pay your credit cards on time and try to keep your balance low or at a zero balance.

Answer 6

It only affects your personal credit if you made a personal garauntee. You should see if you can get it moved to your business report.

Answer 7

If you have credit, it is good, go on line and check you credit rating.

Answer 8

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