greatfargo

Shift Car Loan from my SSN to my Company EIN

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Hi,

I has a Sole Proprietary company with its own EIN. The company owns two cars with loans taken under his SSN. I want to shift such liability to his business to build business credit. Someone told me that I need to change business structure to LLC to do such shift. Which order of action would be better and how to shift the car loans from my personal credit report to company's credit report
 
Change the company to LLC then do correction in credit report to put the loan under the company
 
or
 
Do correction in credit report to put the loan under the company then change it to LLC.
 
I appreciate your response and help.

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You're talking about two completely different things and there's no "correction" that will do what you want to do.  You can probably put the car title into the name of the LLC by just going to your DMV, but this isn't what gets reported to the credit bureaus.  What shows up on your credit report is the entity that is responsible for paying the loan on the car.  In order for your business credit report to show the auto loan, the auto loan must be in the name of the business.

One difference between an LLC and Sole Proprietor is the fact that "you" are not the LLC as you are with a Sole Proprietorship.   In other words, you wanting the loan to show up on the LLC's credit report would be exactly the same "I want my car loan to show up on my neighbor's credit report."  You are two separate entities and your neighbor would have to qualify for the loan in order for it to be moved into his name and appear on his credit report.  Same logic applies to an LLC.

You can possibly use your personal credit history to make a personal guarantee for the LLC loan (basically negating the LLC as it relates to isolating your personal property from the creditor), but the lender will tell you everything you need to do, so start by contacting them before doing anything because it may turn out you go on creating an LLC that can't qualify for the loan and you will have wasted your time.

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