How to Create a New Credit File at Companies
If you are planning to build credit for your business, it is important for you to understand that you need to have a business credit profile that is separate from your personal credit. Particularly, start-up companies have to work at building a credit file, which is a basic requirement for obtaining business loans, business vehicle loans and credit cards for business expenses. It takes patience to build up your business credit profile because of the time required.
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Things You'll Need
- Computer with Internet access
- Employer identification number (EIN)
- Business license and permits
- Official business contact number
- Articles of incorporation
- Company checking account
Instructions
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Contact the nearest IRS center and file a request for a nine-digit employer identification number (EIN). You can apply for an EIN before you officially open your business. The EIN will serve as the identification number for your business, similar to how a Social Security number functions for an individual.
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Prepare documents to apply for business credit. If you are applying for a credit card or other type of loan, request a copy of the application and list of documents required to be submitted with the application. Typical document requirements may include a copy of your articles of incorporation, copies of tax returns for the business and a recent profit and loss statement. You will also need to supply the EIN as part of the application.
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Start to build up your credit record by getting net-10 or net-30 accounts with reputable and established vendors such as Wearguard, Granger and ULine. These term accounts with vendors allow you to purchase various business and office supplies on credit. Be sure to pay the invoices for these accounts on time. Typical payments are due within 20 to 30 days of the receipt of your order. You can use these accounts as credit references when applying for other types of business loans, business vehicle loans and credit cards for the business.
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Pay all of your business bills on time. Whether you have to mail a check, use a money order or pay your business bills online, make sure that you always pay your bills on or before the due date. Paying bills on time is the number one way to build a credit file and a high credit score.
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Secure a business credit card. Make a cash deposit with financial institutions that issue credit cards for business. Many institutions will consider the amount you have deposited with them and issue a credit card that is secured by your cash account.
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Use your business credit card for your purchases and make sure to meet at least the minimum monthly payment requirement on or before the due date. You can use your business credit card for your transactions with gas stations, merchandise or office supply outlets and department stores. Using and managing your business credit card account also helps to create a credit history for your business and contributes to your credit score.
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