Archive for the ‘Corporate Credit’ Category
An Important Principle in Corporate Credit Concepts
When you learn about credit, the two terminologies are very important to understand: personal credit and corporate credit. It will continue with the rating for each type of the credits: personal credit rating and business or corporate credit ratings. How are these two different?
How it links?
Personal credit rating will be linked to your social security number. No matter from which bank or lender you obtain credit, they will report your credit history to the same number: your social security number. In corporate credit concepts, it is linked to your business tax ID. Your corporation or LLC is registered to have tax identification number, all your corporate credit will be recorded in that ID.
What is the score?
The score for personal credit rating is 300 – 850, and business credit rating is 1 – 100.
What are the scores for excellence rating?
The excellence rating for personal is 720 and higher, and the business credit score for excellence borrowers are 80 and higher.
The implication for rating for personal and corporate is the same. Credit is given in different rate and different conditions. Lower risk borrowers will benefit a lower rate than the higher risk ones. A riskier borrower will take the credit with a tighter condition such as securities, control on income, and tight schedule of repayment.
The rating will open the possibility for you to enjoy business credit line. It is credit facility that attached to your checking account to withdraw more than the balance you have. The ratings will be calculated with different data, but they both help for approval of credit lines needed by lenders or credit providers.
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