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Building Individual credit or establishing a business to build credit through business credit cards?

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RED_Knives
Valued Member

Building Individual credit or establishing a business to build credit through business credit cards?

In general I feel I have a fair understanding of what I should be doing. but still I can't help but think I must be missing something.

Is there an advanced section to building credit? would a business go about doing it any differently than an individual?

 

I think at this point my goal should be to actually make more money as 18,000 a year doesn't really cut it. why would they increase my credit if I don't even make any money. Currenlty writing a business plan and would like to know a few things about buisness credit. Since I want to be able to get a decent buisness loan around 25,000-35,000 to open a bodybuilding gym.

 

before I apply for this $35,000 loan should I register a buisness now and try to build buisness credit or should I continue to build my individual credit? I want to apply for a business loan in the next year but am not sure if I should be building my credit through a business establishment or simply on my own?

 

As of now my credit score is 669 and should be increasing to somewhere around 700 as I will be paying off a 30 percent utilization that I had for a couple months(stupid me). with a measly 2750 creditline with three cards what would be a realistic time frame, stepping stones and actions I can take to try to reach my loan goal of 25,000-35,000 goal?

 

I am very greatful for the responses thanks guys,

Best Regards, 

 

RED


Starting Score: 651
Current Score: 730
Goal Score: 800

Credit Cards and Credit Limits: Barclay 7250, AMEX 2000, Discover 6250, Cap OnePlat 3000, BestBuy 3000, Chase 3500, Paypal 4300, Walmart 1000, BOA 2000, Kohls 800, Target RED 500, Les Schwab 500, TOTAL 34900 OldestAc1.8 years
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acleynes
New Contributor

Re: Building Individual credit or establishing a business to build credit through business credit ca

Since your business (gym), would require you to own or lease commercial property; you would need to have substantial income.  Apart from overhead for gym equipment, you would most likely also be paying a lease agreement as well.  That is a lot of $$$...

 

Honestly, I think a business of that magnitude is 5 to 10 years down the road if your current income is $18,000/year and don't have a lot of starting capital.

 

Your best bet to get a bank to finance you a loan is to work at a franchise gym, work your way up to manager, and then ask the bank for a loan to open up another franchise.  

 

A lot of people who own franchises like McDonald's were previous store managers.  They have already proven that they can manage a business successfully and banks like to see that.

 

To start your own gym is going to take a lot of money; because of the size of the facility, the cost of equipment, and insurance.  Good luck to you.


Starting Score: TU 749 02/02/2014
Current Score: TU 749 02/02/2014
Goal Score: 850


Message 2 of 4
user5387
Valued Contributor

Re: Building Individual credit or establishing a business to build credit through business credit ca

Small business credit cards typically require a PG (personal guarantee), which is a way of saying that your personal credit report is pulled.

 

I'd suggest working on your personal credit, along with doing the paperwork on a business, such as licenses, permits, accounting, and so on.  I wouldn't worry about business financing right now.

 

Message 3 of 4
RED_Knives
Valued Member

Re: Building Individual credit or establishing a business to build credit through business credit ca

Yeah I'm aware its pretty expensive. The equipment makes me want to puke on how expensive it really is. I have been searching for much cheaper equipment and possibly looking into building my own instead. I mean there just slabs of metals with pullys and weight attached. The total costs I've calculated so far are around 35,000. Yeah this year I should be making somewhere around 29,000 as I should be starting a new electricion apprenticership. 

 

I've worked for gyms in the past and for some of the big box gyms it's seriously a disaster. The things they make you do and the lies they tell you to spit is outrageous. I really don't like working for big box gyms, but maybe for a smaller type buisness where its more important for them to have a real emphasis on customer service could be a good idea. 

 

I figured a small loan of 35,000 would be in my grasp within 3 years not 5. mostly due to my increasing leverage. at the end of this year I should be able to get a house, as I will be purchasing one that I believe should help me with leverage since my understanding is that a lot of times banks need to know you have adequate collateral if you can't pay them back. I figured a house would be acceptable and would help me get future loans? what is your take on this idea/plan?

 

I should be able to get this house for significantly cheaper than its actual value as my parents are moving away and im prepairing to purchase it in the next year. Would this be a good idea in terms of getting leverage from financial institutions for my future business plans?


Starting Score: 651
Current Score: 730
Goal Score: 800

Credit Cards and Credit Limits: Barclay 7250, AMEX 2000, Discover 6250, Cap OnePlat 3000, BestBuy 3000, Chase 3500, Paypal 4300, Walmart 1000, BOA 2000, Kohls 800, Target RED 500, Les Schwab 500, TOTAL 34900 OldestAc1.8 years
Take the myFICO Fitness Challenge

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