HOW TO BUILD BUSINESS CREDIT
BASICS ON HOW TO BUILD BUSINESS CREDIT:
Business Credit Benefits:
The business credit score is based solely on whether the bill is paid on time or not, and other factors. In many instances, paying the bills on time builds business credit faster than they could with personal accounts. Business credit can and should be built without any linking to your personal accounts, thus removing the chances of creditors being able to steal personal assets if something goes wrong. A business owner will be denied financing if they have no business credit, and most never know why they were denied. Why? Because there is no obligation to disclose that information.
Business Credit Building
Build Business Credibility
Be sure to use your exact business name on every business loan application. This needs to include any Fictitious Name Registration/DBA filing. Be sure to check the business name is the same on your corporation papers, licenses, and bank statements. Consistency is key.
You can build business credit with almost any corporate entity type. Separate your business credit from your personal credit unless a personal guarantee is absolutely necessary. Make your business a separate legal entity or else it is not a true business. You will need a corporation or an LLC to separate personal from business.
Your business must have a Federal tax identification number, or EIN number. An EIN is used to open your business bank account and build your business’s credit profile. You should verify all agencies, banks, and trade credit vendors all have your business listed with the same EIN.