1. P ERSONAL VS. B USINESS C REDIT Presented By: Joanna Washington AVP Banking Officer @ City Bank

2. W HAT IS CREDIT ? Borrowed money that you can use to purchase goods and services when you need them. Credit is received from a credit grantor Agree to pay back the amount your spent plus interest Build Credit: Credit Cards, Payment Agreements, and Banks or Other Lenders

3. S HOULD Y OU M IX B USINESS AND P ERSONAL C REDIT ? You can, but you really shouldn’t IRS has strict rules about mixing personal and business expenses. You put yourself and family at risk if your business fails or experience money trouble Creditors will come for YOU

4. S HOULD Y OU M IX B USINESS AND P ERSONAL C REDIT ? Business looks more professional Pay expense with business funds Co-mingling personal and business transactions makes it hard to track business activity

5. D IFFERENCE BETWEEN BUSINESS AND PERSONAL CREDIT Personal credit Connected to you by your Social Security Number (SSN) Business credit Linked to you by your Employer Identification Number (EIN) or Tax ID Number How the government recognizes your business for tax purposes Sole Proprietor: Need EIN to establish business credit.

6. M AJOR C REDIT B UREAUS Three big companies that compile credit: Experian (B), Equifax (B), and TransUnion Dun & Bradstreet Largest company that compiles information for business credit More Than One Business Must have its own EIN, to have separate credit report

7. W HY DO YOU NEED CREDIT ? Personal Car Home Education Boat Business Business Insurance Purchase Goods or Services Equipment Building Expand Business

8. F ACTORS T HAT G ENERATE Y OUR C REDIT S CORE – P ERSONAL C REDIT Payment History(35%) Single most important piece of the puzzle How Much You Owe (30%) Length of Credit History (15%) How Much New Credit You Have (10%) Types of Credit Used (10%)

9. F ACTORS T HAT G ENERATE Y OUR C REDIT S CORE – B USINESS C REDIT Fewer variables than personal credit: How you pay your bills How much debit you carry What type of industry you’re in It is easier to improve the score for a business than it is for an individual.

10. H OW TO ESTABLISH P ERSONAL CREDIT Keep Your Debit Low Less than 50%, 30% or 10% of credit limit Pay at least the minimum amount due each month Don’t overextend yourself Keep account open Don’t open too many new account Don’t use too many account

11. H OW TO E STABLISH BUSINESS CREDIT Open a separate business checking account Use account to pay business bills and employees, including yourself Apply for and use a business credit card Start with a secured card Apply for a very small loan SBA or Accion Register with the business credit bureaus Experian or Equifax Apply for DUNS number from Dun & Bradstreet Select your business structure carefully Form a Corporation or LLC, instead of sole proprietorship

12. W HEN P ERSONAL AND B USINESS C REDIT M IX Most likely when your business is a sole proprietor Best to protect both scores for small business owners Personal credit will impact business, more than the business impacting personal When a business transaction requires a social security number Business Credit Card Leasing Space Business Loan requiring personal guarantee

13. W HERE CAN P ERSONAL C REDIT BE E STABLISHED Credit Card Company Finance Company Mortgage Auto Loan Line of Credit Personal Loan Financial Institution Bank Credit Union

14. W HERE CAN B USINESS C REDIT BE E STABLISHED Financial Institutions Bank Credit Union Nonprofit Organizations Accion Opportunity Fund Online Lending Companies Government Loan U.S. Small Business Administration (SBA) General Small Business Loans Microloan Program Disaster Loans

15. Q UESTIONS Contact Information for Joanna Washigton Email: jwashington@mycitybank.comjwashington@mycitybank.com