How to Quickly Build Strong Business Credit
In most cases a business needs credit to be able to pay their daily expenses and meet payroll. Having a line of credit for a small or large business is not unusual, but many businesses are always looking for a way to strengthen their credit rating to have even more credit resources available. There is a step-by-step plan you can follow to strengthen your business credit rating.
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Instructions
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Build Strong Business Credit Fast
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Gather all of your business's financial information together and create a comprehensive view of your company's financial status. Include all information on your current bank accounts, including the date the accounts were established. Do not change bank accounts because many lenders and creditors use the date you established your current bank account as the day you started your business. The longer your relationship is with your current bank the better your business credit standing will be.
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Reach out to your current suppliers and ask to establish credit terms with them. According to BusinessFinance.com, you should try to establish accounts with at least five of your suppliers, and then request that each supplier report your account to the three major credit reporting agencies.
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Apply for business credit cards that are only in your business name and have no attachment to you personally. If you can establish three cards that will report the accounts to the credit reporting agencies, you will help strengthen your business credit.
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Contact your bank and request a line of credit at a time when you do not need it. This will help to give you a backup source of funding if you should ever need it, and it will add another positive line of credit to your account. The fact that the line of credit is with your existing bank helps lend credibility to your company because a positive and long-standing relationship with a financial institution is vital to strong credit.
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Pay your bills on time. Do not establish these new lines of credit and then use them to the point where you cannot make your payments. The point is to establish accounts and then only use them as you are financially able.
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Tips & Warnings
Limit the use of the company credit cards you will be getting. Use the vendor credit accounts whenever possible instead of credit cards. The stronger your relationship with your vendors, the better your credit will become.
