HomeVestors Knows The Importance Of A Business Credit Score


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It is essential for a real estate business to have a high business credit score in able to leverage money properly.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows how important it is to obtain and maintain a solid personal credit history. In the real estate world in particular, it is almost impossible to do business without good credit backing. However, instead of relying on personal credit, real estate investors should create and maintain business credit. This would require setting up and cloaking their business in a business entity like an LLC, then establishing a business bank account through which all their transactions are handled. This to a degree, dispenses the need for good personal credit, and protects an investor from guaranteeing loans with their personal assets, while placing the burden on their business instead.

To get started, an investor needs to find out if they already have a business credit file or not. They can do so by calling a credit reporting agency and in case they don’t already have one, it is easy to have one set up simply by applying for their own unique business identification number issued by the federal government. They also need to set up a business bank account and a phone line in their business’ name. In order to build credit, an investor would have to ensure that all their vendors, banks, and suppliers report to business credit reporting agencies. Unfortunately, most don’t, and therefore, an investor has the responsibility of ensuring that all the businesses they deal with, report their activities to credit reporting agencies. Smaller businesses usually don’t have the resources to report credit activity. This is important for those investors who do business with other small businesses. They must request to have their activities reported.

Maintaining good business credit requires paying bills on time, being mindful of those factors that affect credit, and careful monitoring. Some of those factors which can affect business credit include the number of transactions as a whole, payment habits, outstanding credit balances, trends of credit usage, company revenue or business size as a ratio of debt, and length of credit activity. Very complex algorithms are employed in putting these variables together and computing a business credit score. An investor’s job would be to maximize each of these factors in their favor to get the best possible score.

Constantly watching their credit is also an extremely important step for an investor concerned about the health of their business credit. Credit scores can decline very rapidly with the slightest change in borrowing or purchasing behavior and it is necessary for investors to stay on top of things by following the trends closely, taking steps to correct whatever needs to be corrected in order to restore declining credit.

A good business credit score is an indispensable asset for a real estate business. Establishing and maintaining solid business credit, is therefore essential.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

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