Building Business Credit with Poor Personal Credit

in #credit6 years ago

Building Business Credit with Poor Personal Credit

In most cases, starting a business requires money. Whether for purchasing products,
marketing, distribution or working capital, the fact is still the same. It costs money.
Yes there are endless options for loans, credit cards and business lines of credit for businesses.
That’s why building good business credit is crucial for any business owner.

The Essentials

Establish a legal business entity. Working as a freelancer or sole-proprietor won’t cut it.You need to register as an LLC, or Corporation and obtain an (free at irs.gov) EIN (Employer Identification Number).
This is basically your businesses social security number.

Just because you’re open (or about to open) for business, doesn’t necessarily mean you’ve put yourself on the map. You can’t effectively establish business credit until you’ve established your business! Get a business phone number and have it listed in the directory. Every credible business should have one. You’ll also want to open a bank account in your official (legal) business name, and regularly use it to pay your bills.

Trade Line Secret



While a lot of information can wind up on your business credit reports, trade lines can be particularly important.

Business trade lines are lines of credit established between a business and a vendor, such as an account with an office supply company where the company allows the business to pay the account balance several days or weeks after receiving the inventory. (Credit Karma, 2018)

Three easy approval trade line options are Quill, Grainger and Uline.
These three companies almost always approve new business accounts, and they offer the option of NET 30 billing.

Here’s where you need to watch out: Not every vendor will report your payment activity. So even if you always pay your vendors early or on time, you may not be building your business credit.

Your payment history with vendors, lenders and credit card issuers is an important factor in your business credit score. In fact, making on-time payments may be just as important with your business accounts as it is with your personal accounts.

Register with Dun & Bradstreet to get a D-U-N-S Number®. This is a nine-digit number used to identify each physical location of your business. It’s free for all businesses required to register with the federal government for contracts or grants.

And lastly, make sure you monitor and stay on top of your credit reports. Both business and personal.<-

source - http://bit.ly/2vGdtDI

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