What is the point of business credit?

[Account Closed]

Hi everyone,

I see a lot of posts about people wanting to build business credit and how to build business credit, but I'm not sure I understand why you need business credit.

I just started investing and am planning to structure my business as a sole proprietorship. I have no plans to incorporate until I've reached a certain scale. Right now, it makes more sense for me to purchase homes in my own personal name in order to take advantage of my personal credit.

This brings me back to my question. Why is it important to build business credit early on and what purpose does it serve later? Second, if I decide to build business credit now as a sole proprietorship, how can I transfer that established credit to an entity when I decide to incorporate later?