How can I build my personal credit?
When starting to build your personal credit, the rule of thumb is to keep it simple. Don’t apply for multiple credit cards; instead, carry just one active card and manage it properly by making payments on time, every time, and try to avoid simply paying the minimum amounts each billing cycle. And remember that over half your credit score is based on timely payments and keeping your debt level low, typically under 35 percent of your credit limit.
How do I build my business credit?
First, to help separate your business credit from your personal credit in the eyes of reporting agencies, instead of using your Social Security number, apply for a separate tax identification number and establish a separate business address, separate bank accounts and a separate business name and phone listing.
Like your personal score, making payments on time factors heavily toward increasing your score. Business credit cards, installment loans and even loans between relatives or investors can be reported to the credit monitoring agencies. Additionally, suppliers and vendors can also report payments to data companies that collect financial information on your business.
If you manage your credit matters properly today, you will have a much better chance of being successful in the future, in terms of purchasing a home or a car, or receiving the capital needed to start the business of your dreams or fund your current business’s expansion.
IRVIN ASHFORD JR. is a senior vice president and Texas Market Community Development & External Affairs Director for Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/Fort Worth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
