You are here:
- Home
- Business
- Small Business Information
- Business Debt
- LLC and personal credit
Business Debt/LLC and personal credit
Advertisement
Question
I'm thinking of starting an LLC Investment group with some friends, I was told that we can us our credit scores to get approved for the credit line our LLC will use, but it will not effect my personal score. (The score will just be used to start the LLC, but I wont be personally responsible) Is this true?
Dear H. Peters:
Thank you for your question. First allow me to suggest that if you have not already done so, you may want to consult with an attorney to minimize risks during the formation of your business entity. As it relates to borrowing working capital;It is my understanding that if an application is filled out for the benefit of the business to borrow money and a personal guarantee or Social Security number is added, than yes you are partially liable. The basis for most institutions to collect this information is to minimize their risk of incurring late payments or default based on someone in the company's prior credit history. Should you be granted a line of credit and the company is able to pay back the debt in a timely and efficient manner, great. However, if an unanticipated hardship should occur, that would prohibit repayment at any point it is possible that in the attempt to collect on the debt, creditors can look to those who originally guaranteed the repayment of the debt. This is usually, when it can begin reporting to your FICO, if not prior. Bottom line, read what you sign and keep copies of all loan documents. If you found this answer helpful, please take a moment to rate it so others may benefit from your experience.
Respectfully,
Christine Janklow
Related Articles
- Credit Monitoring and Identity Theft - Will Credit Monitoring Prevent Identity Theft?
- Your Credit Report - What's On It and How Does It Get There
- Business Debt - How Business Debt Affects Personal Credit Score
- Your Credit Report and How It Works - Personal Finance in Your 20s and 30s
- US Federal Debt and Deficit - How the National Debt and Deficit are Different and How the Debt and Deficit Affect Each Other
Answers by Expert:
Christine Janklow
Expertise
As President of SettleSource,Inc. a business debt settlement firm, I invite you to inquire about all aspects of business debt solutions to best determine which may be most appropriate. If you have questions such as: What is debt settlement and how process provide debt relief to my business? What options are available to deal with my business debts? Is it possible for a business owner to negotiate their own settlements? Why is debt settlement preferable to filing a bankruptcy or debt consolidation? Why are creditors willing to provide settlements to a business? How will settling debts affect credit scores? or How to rebuild a business after debt is eliminated. Please ask it now! For more information regarding how debt settlement can help your business, please visit www.SettleSource.com and place your inquiry. Mention All Experts to have a confidential no cost consultation with Christine. If this is your business situation time may play a very important factor in getting matters resolved proactively before they have negative affects on the business.
Experience
My expertise is specific to providing business solutions that will have profound positive impacts on the financial health of businesses. I have 25 years experience as an entrepreneur and have developed national sales programs; strategic alliances; product development; marketing programs; business and turnaround plans and debt settlement programs all providing methods to improve the financial outlook for large and small businesses. In the area of commercial debt settlement I have over 10 years experience working with large and medium corporations and closely held businesses to enable successful debt reduction and turnaround. I am a professional debt arbitrator and have negotiated with major banking institutions as well as vendors, suppliers and other trade creditors.
Organizations
Provisors;Turnaround Management Association; Los Angeles area
Publications
Accounting Today; Web CPA; National Restauarant Association;Los Angeles Daily News; Today Magazine Monthly series of business articles entitled "Brand News."
Education/Credentials
Bachelor of Business Administration; Associate of Arts Merchandising
Past/Present Clients
American Airlines, American Express, Safeway Inc., New York Life, consumer products manufacturers; retailers, food service industry and other small businesses and service providers.
©2012 About.com, a part of The New York Times Company. All rights reserved.