3 Ways to Properly Build Business Credit


Many small businesses could benefit from having additional capital available to free up their cash flow, but unfortunately most will never know that they can establish and build business credit for their business without using their personal credit.

There are 3 critical things any small business can do to ensure they are building business credit.

Be careful with “business” credit cards

Do not apply for credit cards that say they are “business credit” cards, if the application asks for your personal information, such as your social security number. This is a clear indication that it is a personal credit card disguised as a business credit card.

Prepare your company documents

Make sure your small business is set up right from the start. That means having your articles of corporation properly filed with the secretary of state in the state in which you do business, as well as filing a tax identification number (sometimes called an EIN) with the IRS. These data are critical to completing a true business credit application.

List your company correctly

Make sure your business is listed by commercial credit reporting agencies like Dun and Bradstreet. You can visit them at dnb.com and see if your company is already listed in their system.

Establishing and building business credit is the single most important thing you can do to help grow your business. Following these critical steps will help ensure that you are able to build adequate business credit.

Having these things in place for your small business before you apply for a business loan or line of credit can mean the difference between being approved or denied.

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