Does business credit/debt affect personal credit score/DTI?

[Account Closed]

I have an LLC for my real estate startup, but I have neither the capital to get it off the ground nor the credit score to secure funding. I have a potential partner who I am willing to sign on as a 50% partner in the LLC, in exchange for using their 700+ credit score to secure startup funding. Before he agrees, the potential partner just wants to be sure that:

1. The LLC's debt:income ratio won't affect his personal debt to income ratio.

2. Late payments on behalf of the LLC won't affect his personal credit score.

Just want some experienced real estate investors to confirm the above statements as true. Thanks alot!

[Cara Lonsdale]

Business credit is different from personal credit, and does not intertwine EXCEPT when the personal credit is used to secure the business debt.  So, if your business partner is using his SS# to be a co-signor, or guarantor, then be sure that it will report on his personal credit.  Otherwise, the business debtor would not take his personal info like SS#.  They should only be using the business tax ID.
Suggestion for you to get started...Open a credit card in the business' name and use the tax ID#.  Capital One does this fairly easily.  Establish a few months of business charges and payments to at least put your business credit on the map.  Then you should be able to go from there.  Also, you should have a checking account that also is attached to the business and tax ID#.  Somewhere like Kabbage will be an easy start for raising small capital easily.  Then you can build up to larger resources as you go, establishing stronger business street cred along the way.

On a separate note, what are you funding?  Is it a new real estate business for becoming a Realtor or other position within the Industry, or are you referring to funding as your source of funding for flip projects?  If it is the later, you don't need credit to request funds for a project.  The hard money lender will look at your project, and not you.  It is still a good idea to set up your business and tax ID# to use for the HML, but the lender will only be concerned with what the project can bring them in the event of your default, and your experience and/or abilities to do what it takes to flip it successfully.