How to Build Business Credit in 10 Days
How to Obtain Corporate Credit
Building corporate credit is a vital step to the economic growth of a business. Companies with a strong business credit profile will have more opportunities to obtain loans or leases, improving company expansion possibilities. Here are some guidelines on how to obtain corporate credit.
Open a business checking account.
- Starting a business checking account separate from your personal checking account will allow you to build business credit based on a positive account history and to track business transactions more accurately.
- Financial institutions could require your company's Federal Employment Identification Number (FEIN) to list the account as a business account. Bring documentation of your FEIN registration when you apply.
Obtain a small loan.
- Apply for a small loan at the same bank that holds your business checking account. This will help build corporate credit and benefit your business by helping you to buy equipment or tools. Your bank may offer discounted interest rates for account holders in good standing.
Pay bills in the company's name.
- Register utility bills in the company's name instead of your own and be sure to pay business utility bills on time. This will contribute to your positive company credit history.
Lease a company vehicle.
- Lease a vehicle to be used for company purposes using the business checking account. The lease and regular payments made on time will positively impact your company's credit score.
Use business funds to pay for expenses.
- Avoid using personal checking accounts to pay for business expenses. This puts you or other employees at greater liability for business costs and does nothing to improve your business credit score. Use only designated credit cards and checking accounts registered to the business.
Apply for a line of credit.
- Find a business credit card that offers cash back or other incentives for business accounts. Pay the balance down regularly to build a positive credit history. Expand these lines of credit as your company grows.
Monitor company spending.
- Designate a limited number of employees as authorized to use business credit cards or checking accounts. Monitor spending histories and account balances regularly to maintain necessary balances and avoid missing payments.
Build credit slowly.
- Start with small loans and lines of credit when your business is starting out so you will have a solid credit history by the time your business is well established. Starting small ensures that you will be able to make regular payments and maintain balances as your company grows, keeping your business credit profile positive as revenue and spending increases.
Video: How to Get 0,000 in Business Credit for Your EIN that’s Not Linked to Your SSN
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