How to Get Good Business Credit Fast

Business owners should establish good credit.

Business credit is separate from your personal credit. You can build good credit as a business owner and use that credit to help grow your business. As your business continues to grow and becomes more successful, your business credit will become stronger and may even surpass your personal credit. Establish your business credit and ensure that you build up a good credit history for yourself as a business owner.

Instructions

1. Understand the difference between a good business credit score and a good personal credit score. As you build your business credit, you'll want to have an understanding of this rating system. With personal credit scores, a score of 680 or higher is exceptional, and the range can go from 300 to 850. With business credit scores, on the other hand, a score of 75 or higher is exceptional, and the range goes from 0 to 100. Note that business credit scores start at 0 because not all people have established business credit.

2. Operate your business under an LLC or corporation, rather than as sole proprietorship, partnership or independent contractor. This will separate your personal credit from your business credit and helps to protect your personal assets.

3. Apply for business credit, leases and loans through your business. This means getting another company to grant you credit through your business without using your personal information and then reporting to the credit agencies.

4. Make sure your business is set up properly. To gain credibility and start building good business credit, you need to ensure your company is operating as a reputable business. This means getting any required licenses and permits, having a valid business address and phone number and adhering to any other state or federal laws that pertain to your business or industry.

5. Pay back your business debts on time and make monthly payments. Be careful not to borrow more than you can realistically pay back. Just like building your personal credit, to build your business credit you need to be a responsible borrower. Also, making monthly payments, rather than quarterly for example, will keep your credit profile active.

6. Register your business with the various business credit bureaus. The three major credit bureaus are Experian Business, Equifax Business and D&B. There are also many smaller bureaus, such as Business Credit USA, Kroll and Client Checker. Industry-specific credit bureaus exist as well.

7. Ask companies or financial institutions that give you a loan or line of credit to report this to the business credit bureaus you're registered with. Be sure to make all your payments in full and on time to continue to grow your business credit.

References

• Entrepreneur: The ABCs of Business Credit
• Business Credit Services: Business Credit Bureaus