Establishing your small business credit profile is easier than you might think. Don’t use your personal credit for your business. Even if you have bad personal credit, you will be able to get credit for your business.
It’s important to know that ANY business can build business credit. It doesn’t matter if you are a startup if you do or don’t have collateral, your cash flow doesn’t matter either, and when you build credit the right way your personal credit makes no difference.
So business credit is a great solution if you can’t get a loan another way because you don’t have cash flow, good credit, or collateral. And it’s great for you even if you can get a loan because it’s the key to you getting the highest approvals at the best terms.
The first step to building business credit is to make sure your business is setup credibly. This means you should have a business address or a virtual address, a business phone number, a website and professional email address, a fax number and toll-free number, your number should be listed with 411 also.
You should have the proper licensing needed in your county, state and industry. And you should make sure that your business is listed online, and the listings are all congruent with the same information.
Next, check with Experian and Equifax commercial as well as Dun & Bradstreet to see if they have a record of your business or not. And get your D-U-N-S number through D&B for free.
Then start applying and getting approved for vendor accounts that report to the business credit reporting agencies and who will approve you for credit even when you have none already established. Some accounts that do are Uline, Quill, and Laughlin and Associates.
You’ll need to apply with them for credit, buy $50 or more worth of stuff from them using that credit, and pay your bill timely. Once you do this those accounts will report within 60 days.
Once you have 5 accounts reporting, you can then start getting approved for store credit. Some sources to try early on are Office Depot, Dell, and Amazon. Most major retailers offer business credit. Apply without putting your SSN on the application so the make the approval decision based on your business credit.
With 10 accounts reporting you can start to get fleet and cash credit.