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Old 8th May 2012, 11:32 AM   #1
TCCDepot's Avatar

Join Date: Apr 2012
Location: Southern California
Posts: 22

Default What Is The Difference Between Corporate Credit And Personal Credit?

There is a significant difference. With personal credit, you’ll be limited in the amount of credit you can receive, you’ll pay a higher interest rate, and your LTV (Loan to Value) will affect your ability to obtain further financing. The more you use your personal credit to finance your business, the worse off your personal credit will be. Personal credit is driven by FICO, and each time a lender requests a credit inquiry, your FICO score will drop by 2 points – this, in turn, brands you as an even greater credit risk.

With corporate credit, you are not limited to the amount you can receive, interest rates are usually lower than what you’ll pay personally, there is no LTV (Loan to Value), and inquiries have no impact on the corporation’s credit score. Your corporation also has the ability to obtain 10 to 100 times the credit you can obtain personally. Another important consideration is that Corporate Credit does not report to or have anything to do with your personal credit file.

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