One of the most important things in a business is getting credit. But how do we build a business credit?
Not because you have a business, you automatically have credit.
Make sure that you separate all your business and from all personal credit. The bank will always want to make your loans personal, so they can have a grasp on your personal credit. Make sure you make the loan in the name of your corporation, LLC etc. Your personal credit will get affected if you start using it to build your corporation credit.
Identity is everything. To have business identity is the most important thing to do. You need to go to the IRS and get a Federal EIN number, that is like the social security of your company. Get Permits on your business name as well as phone. The more things you have under your company’s name the better when the bank is looking into your business potential.
Maintain a balance on the bank for at least 3 month. The bank looks into your business statements. This is one of the most important things. To keep working capital on your bank account.
Business credit bureaus are an important step. Make sure you contact them, and open a file with them, the information provided is voluntarily. They are not the same as the personal credit agencies. The name of this companies are Dun & Bradstreet, Experian Business, Equifax Business, and Business Credit USA, report your business credit history to them. This will give more chances for getting loans from banks when they look at your credit history.
Get business credit cards that are not part of your personal credit. Apply for business credit cards from places like Staples, Home Depot, Apple, Sam’s Club, Costco etc. This report to the credit agencies. Contact vendors and ask for small credit. The more vendors you have the better for your company. Make sure you pay everything on time. If you have the money to pay the loan right away, don’t do it, pay it little by little. This will give you more credit on the long run. Keep your credit profile active all the time.
It is not a complicated process it only takes time to be build. Be consistent and you will build your credit in no time.