Establishing your credit history from the moment you start your business is definitely an advantage. The longer you have your credit history, the more secure banks and credit institutions will be of your ability to meet your payment obligations, so you may wonder why is this important?
Sooner or later, as your business grows and expands, you will need to apply for new loans and other financing options for your business. As we've said, the better your business's credit history, the better your chances of being offered the best possible loan terms.
Also, if you have a business with a line of credit separate from your personal credit, this will protect your credit history from risks. If you do not meet the payment term on your business cards, only your business credit will be affected and your personal credit history will not have to suffer.
We will discuss the requirements and information to prepare before you can start building credit for your business.
Legal Entity: First, you need to define the legal entity of your business. In order to draw down a line of credit for your company, your company must be a corporation or an LLC (Limited Liability Corporation).
Physical Address: Legitimate businesses must have a physical address and phone number. These two important contact details confirm that your company really exists and is not just a name.
The investors. Who is financing your company? Whether you have sought help or financial assistance from a lending company or private investor, you must provide this information when applying for credit for your business.
Licenses. You must be able to provide proof that your business is already registered and has all the business permits and licenses required by your city or state.
Personal credit. Since you don't have a business credit history yet, your personal credit was used when you applied for your first loan, line of credit, or credit card for your business or business. Obviously, an excellent rating or score on your personal credit increases your chances of getting approved and getting the best deals. However, it is a good idea to request your first credits with entities that will offer facilities for new business owners without requesting a guarantee or verification of your personal credit, although your line of credit will initially be for a low amount, this will help you build the credit history of your business and in this way it will not affect your personal credit score every time a financial institution requests your registration.
Credit bureau. Dun & Bradstreet, Experian Business, Equifax, Business Credit USA are the credit reporting agencies in the US. best known. You can apply or register your business with these credit bureaus by filling out a form and registering your business. The process can take up to 30 days to complete, but once it's done, you can rest assured that all of your transactions with your lenders and business associates will be reflected on your business credit report.
Register your business with Dun & Bradstreet (www.dnb.com) by applying for a Dun & Bradstreet DUNS Number®. A DUNS ® Number is to a business what a Social Security number is to an individual. The Duns ® Number, not a Federal EIN, is the number used by creditors to obtain a copy of your business credit report.
Paydex score. Your Paydex Score is equivalent to your FICO Score. The Paydex Result is used to calculate the credit history of your business or company. To build a high Paydex score you will need to prove yourself as a borrower. After registering your business with the credit bureaus, getting a loan or credit card, and making your payments on time, that's the best way to build good credit for your business. Business credit scores range from 0 to 100, with a score of 75 or higher considered a good score.
Visit us at https://amerishopbusinesscreditbuilders.com/ to learn more about building business credit, getting business loans, and making money offering business credit and financing for your customers.
Amerishop Business Credit Builders