Building a new business

[Josh2942]

So I want to start up a business and will be a sole prop. I was going to get an EIN number from the IRS website but even the site closes at a cetain time. If I get an EIN number will any credit INQs be for business credit? Since I only have personal credit will they pull that? I have a very ambitious business plan and want to use business credit to invest in my plan. My personal credit is very good but I want it separate from any business credit. 

[myjourney]

Applying for a EIN number no credit is pulled 

When your ready for business credit that's when you'll be asked for EIN # along with any PG's when applying 

Good luck on the new business

[Josh2942]

What exactly is a PG?

[myjourney]

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@Josh2942 wrote:

What exactly is a PG?

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PG= personal guarantor

Which means your personally responsible for the payment even if business folds

So your personal credit will be pulled but you'll be building business credit as well 

[user5387]

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@Josh2942 wrote:

So I want to start up a business and will be a sole prop. I was going to get an EIN number from the IRS website but even the site closes at a cetain time. If I get an EIN number will any credit INQs be for business credit? Since I only have personal credit will they pull that? I have a very ambitious business plan and want to use business credit to invest in my plan. My personal credit is very good but I want it separate from any business credit. 

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"Business credit" is a vague term.

For example, I have an LLC and EINs and a couple of business CCs, and if I use those CCs, it's business credit.

However, that credit has a PG on it, and while it's separate for bookkeeping and tax purposes, it's really tied to me as an individual.

To make business credit really be separate requires time and a well-established company.

Another point here is that business credit for small businesses often comes through CCs.  If you really need the credit in some other form, such as cash, then a business LOC or loan might be a better vehicle.

[scenery_guy]

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@Josh2942 wrote:

So I want to start up a business and will be a sole prop.Good decision, you can always form a corporation or LLC later. It's not easy yo go from LLC to Sole Proprietor.

I was going to get an EIN number from the IRS website but even the site closes at a cetain time. Get your EIN. Fill out the form online and it gives you the number instantly. PRINT IT OUT OR KEEP AS A PDF. 

If I get an EIN number will any credit INQs be for business credit? An EIN is just a number to identify your business with the IRS. Think of it as a SSN for your business. You use it when filing paperwork with the IRS about your business activities. More on the INQ next answer. 

Since I only have personal credit will they pull that? Yes, as others have mentioned they will pull you personally and it will show as a INQ on your personal credit. But that's good as that's the only ding to your personal report you will ever see with business credit unless you default. You will be personally guaranteeing the line of credit (PG) but that's normal now days and we all do it. Another good point it UTL (utilization) on business credit does not report to your personal report. 

I have a very ambitious business plan and want to use business credit to invest in my plan. Now hold on a second - being ambitious is great but be aware that a misstep with business credit can really mess you up personally. Make sure your business plan is solid and does not put you in too much risk. Seek a consultation from SBA or SCORE if you can, it's free and they really do want to help make your startup a success. 

My personal credit is very good but I want it separate from any business credit. And that's good, you will need good personal credit to start down the path of business credit. Besides the initial INQ your business credit will be isolated from your personal credit - unless you default and fail to pay. It's been reported that business credit lenders are a little more lenient as far as late payments but don't test those waters. Just be aware the rules that govern personal credit do not completely apply to business credit and you have little is any consumer level protections. 

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Sole proprietor here. See my answers above in red. 

Good luck and feel free to ask more quyestions as needed. 

[Creditaddict]

keep in mind capital one and discover business credit cards report to personal credit ALL the time not just if you default.

cards like Business American Express and Chase Ink cards do not report to personal credit as other poster mentioned unless you default but they will use your personal credit to approve them.

[Josh2942]

Great information. Can you give me your email so I can contact you? My problem is I have been using my personal credit to buy supplies, stock, etc. I have paid it back mostly but have a balance of 2500 between my apple card and bestbuy because of their finnacning. I applied for alot of credit in a short time. I have about 20 INQs on Experian 15 on Trans and 8 on EQ. I am at about 13% utilization oldest account 10 months. No baddies. I shot myself in the foot with all these INQs. Unless I can get a business line that pulls EQ I will have to use my Amex Gold to buy anything I need. I hoping that next year I can PC my freedom to a CSP. For now this is all I have.