How to Obtain Business Credit

Owners needs to establish separate business credit from personal credit.

Obtaining business credit is vital to the growth of your business. Good business credit allows you to grow your business by being able to apply and get approved for business loans and credit cards without affecting your personal credit. Building your business on a limited budget or with credit obtained through your personal credit can be harmful to your potential business growth as well as your personal credit score.

Instructions

1. Don't apply for business credit using your Social Security number. It is harmful to you on a personal level as well as on a business level. If you are using personal credit cards or getting a lot of declines, not only are you damaging your personal credit, you are also keeping yourself from building your business credit. Acquire a tax ID number.

2. Make sure you have your business plan and structure written out. According to the Small Business Administration, one of the top reasons businesses fail is due to lack of capital. .

3. Register for a Duns & Bradstreet number. You will be asked of this when you apply for business credit. A DUNS number can be acquired by calling 866-705-5711. You can also apply online.

4. Open a separate business checking account. You should already be keeping your personal finances separate from your business finances. You want to shop around for a bank before settling. Ask about business solutions, rates and credit options that would benefit you before you choose.

5. Apply for business credit with credit-friendly vendors. It can take years to build a strong and positive business credit file. Once you have applied for business loans and credit cards, pay on time and in full each month if possible. You also want to make sure to apply for credit with vendors that report to Duns & Bradstreet or Experian to start building your business credit. Keep excellent records as well.

Tips & Warnings

• It can take years to build a strong business score.

• I am not a business guru, please consult with a professional business credit service for assistance.

References

• Mashable: How to: Establish Business Credit; Nellie Akalp; July 2011;
• SBA: Why small businesses should manage their business credit