How to Build a Business Credit Profile

Video Transcript

"I'm Roger Groh. We're here today to talk about how to build credit for your business. It's not a whole lot different from doing it on your own. Where if a company has borrowed money, the fact that you've made payments on time or have not made payments on time will be sent on to databases that track that over periods and if you've paid regularly on time you got a good credit score, if you haven't, you get a bad credit score. The difference really becomes whether you can borrow money in the future and the rate you're going to pay for that money that you borrow. There are a couple of other areas now that also show up in your business where even if you don't borrow money you can build your credit history. Number one, if you pay your taxes on time, that will show up positively in your credit history. Number two, if you've had parking tickets, that will show up as long as you've paid them, that will show up positively on your credit history, your business credit history. So do the basics, pay your bills, make sure you pay on time. Within business credit history, it used to be that Dun & Bradstreet was really the leader in that business, that you could invite them into your company, they would look through all of your financial statements and they would give you a rating. And that rating might A B C or D and depending upon what is was, it would then translate into the rate that you are paying for anybody that you borrow, whether to expand or whatever it might be. It worked great but now, the credit agencies, the same credit agencies that track your personal credit history also track business credit history. And by far, and there's a difference, within Dun & Bradstreet their forecasting forward what you're going to be able to do and if you have a complex business where you're trying to show where you're going, Dun & Bradstreet is the way to go. But if you're just trying to show what you've done, have you made payments on time, then the individual credit companies really will pick that up. I'm Roger Groh and that's how you help build your corporate credit history."