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First time business credit cards are, of course, the hardest ones to come by. Business credit lenders are usually very tough on start up businesses, and prefer to extend credit to established businesses. Luckily, with enough hunting there are always good deals to be found.
The first thing to be sure of is that you have separated your business credit from your personal credit. This process involves creating a business credit profile with Dun & Bradstreet so that you can get a Paydex score (a business credit score that works similarly to the Fair Isaac score, but on a 0-100 scale). In order to qualify you will need to form a legal entity for your business (LLC’s are most common, although C-corps give you the option of later going public by converting to an S-corp). You will also need to have established a telephone line and a bank account in your business’ name so that it can start becoming active. Once the file is created with the credit reporting agency, you can start building credit, and applying for first time business credit cards.
The kind of first time business credits you apply for depends on your options and how much you are willing to risk. It is much easier to apply for a business credit card that requires the signature of a guarantor, who personally assumes the risk of a business’ debt in the event that the business is having difficulty paying it off. This is very common with bank-issued cards. Bank cards may also require the owner to have a savings account with a minimum amount that must be kept in it in order to secure the business credit card. Unsecured cards are, of course, much more challenging and usually require a higher interest rate.
Once you have applied for your first time business credit cards though, you will have less difficulty applying for future credit cards with lower interest rates and higher benefits. These simple credit-building tools will help you on you way to business success.