How to Build Business Credit Checklist

Quick start checklist to building business credit, without using your personal credit.

Instructions

Difficulty: Moderate

1. Incorporate or Form a LLC:
   
   Formalize the Business and Choose a Business Structure. You must have a "formal" structure no matter how you choose to operate your business.
   
   There are five different types of business structures in forming a company.
   
   Sole Proprietor (last option)
   C-Corporation
   LLC Limited Liability Company (Recommended for small and home based businesses)
   LLP Limited Liability Partnership
   S-Corporation (Recommended for small and home based businesses)
   
   For companies which offer incorporation online check out these sites. Read carefully your state laws, costs, and fees. Many small business owners incorporate in Nevada and Delaware as they offer advantages other states do not offer.
   
   http://www.bizfilings.com/
   
   Also make sure you file for a business license in your state. The above recommended company will assist you in obtaining a license.
2. Establish a Permanent Business Address and Telephone.
   
   *Have your business telephone number listed with directory assistance
   *Have an office address in a commercial location. This will let credit grantors know that your business is a viable one and they will be able to verify your business status by checking with the telephone company.
   
   Recommended Virtual Offices -
   * HQ Global Workplaces http://www.hq.com
   * Office Suites Plus http://officesuitesplus.com
   
   Recommended Virtual Number companies-
   * http://www.ringcentral.com
   * http://www.vonage.com
   * http://www.onebox.com
   * http://www.ureach.com
   
   If you decide to obtain a virtual number you can go to http://www.listyourself.net or http://www.yellowpages.com to list your phone number in the 411 database.
3. Obtain Federal Employer Identification Number (FEIN) (EIN)
   
   http://www.irs.gov
   
   You can apply online and receive your EIN immediately online and they will mail the letter to you within a matter of weeks.
4. Obtain a D-U-N-S Number
   
   Dun & Bradstreet is the company that tracks your business. You can apply for your D&B online and there are several options. The fee based option builds credit but the non fee based option does not build credit but it does establish a presence with the company
   
   http://www.dnb.com
   Click on Establish Your Credit link under the Customer Resources section. From there you can determine which option is right for you.
5. Open a Business Bank Account.
   
   Most banks will require the articles of incorporation, EIN, and/or proof business license in order to open a business account.
6. Business Email Address
   
   Credit grantors need to see you are a viable business even if you are a small based or home based business. Invest in your personal domain and email address.
   
   Recommended company - Go Daddy hrrp://www.godaddy.com
7. Apply for the Creditors below after you have completed all the above steps.
   
   These creditors have been known to give new businesses credit.
   
   www.reliable.com
   www.nebs.com
   www.rapidforms.com
   www.uline.com
   www.staples.com

Tips & Warnings

• Your goal is to build your Paydex score and your D&B Score. These are the 2 main credit reporting agencies for businesses. If you follow the steps I outlined above you should have no problem getting your business credit establish without using your personal credit.
• When applying for credit stay under $100.00 initially and the account will normally be opened without prepayment.