Are you wondering how to get credit for business? Well wonder no more.

You Can Get Credit for Business

We show you how to get credit for business, even if your company is a startup. Business credit will help your company grow – it’s time to get started!

Small business credit is credit in a small business’s name. It doesn’t tie to a business owner’s consumer credit, not even when the owner is a sole proprietor and the solitary employee of the business.

As a result, an entrepreneur’s business and personal credit scores can be very different.

Get Credit for Business: The Advantages

Considering that small business credit is independent from consumer, it helps to safeguard a business owner’s personal assets, in the event of a lawsuit or business bankruptcy.

Also, with two separate credit scores, a business owner can get two separate cards from the same vendor. This effectively doubles purchasing power.

Another benefit is that even new ventures can do this. Heading to a bank for a business loan can be a formula for frustration. But building company credit, when done right, is a plan for success.

Personal credit scores are dependent on payments but also other considerations like credit use percentages.

But to get credit for business, the scores really only depend on whether a business pays its debts timely.

The Process

Growing small business credit is a process. It does not occur without effort. A company needs to actively work to establish small business credit.

However, it can be done easily and quickly, and it is much swifter than developing personal credit scores.

Merchants are a big component of this process.

Undertaking the steps out of sequence causes repetitive rejections. Nobody can start at the top with company credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Get Credit for Business Fundability

A small business must be fundable to loan providers and merchants.

Consequently, a small business needs a professional-looking website and e-mail address. And it needs to have website hosting from a vendor like GoDaddy.

In addition, company telephone and fax numbers should have a listing on 411. You can do that here: http://www.listyourself.net.

In addition, the company telephone number should be toll-free (800 exchange or the equivalent).

A small business also needs a bank account devoted purely to it, and it must have all of the licenses essential for running.

Licenses

These licenses all must be in the perfect, appropriate name of the company. And they must have the same company address and phone numbers.

So bear in mind, that this means not just state licenses, but potentially also city licenses.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Working with the Internal Revenue Service

Visit the IRS web site and get an EIN for the company. They’re free of charge. Choose a business entity like corporation, LLC, etc.

A small business may get started as a sole proprietor. But they absolutely need to switch to a sort of corporation or an LLC.

This is to reduce risk. And it will make best use of tax benefits.

A business entity matters when it comes to taxes and liability in the event of litigation. A sole proprietorship means the owner is it when it comes to liability and taxes. Nobody else is responsible.

The best thing to do is to incorporate. You should only look at a DBA as an interim step on the way to incorporation.

Starting to Get Credit for Business

Begin at the D&B website and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business in their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s websites for the business. You can do this at fastcs.wpengine.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

In this manner, Experian and Equifax have something to report on.

Vendor Credit Tier

To get credit for business, you need to build trade lines that report. This is also called the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to get credit in the retail and cash credit tiers.

These sorts of accounts have the tendency to be for the things bought all the time, like marketing materials, shipping boxes, outdoor workwear, ink and toner, and office furniture.

But to start with, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are generally Net 30, instead of revolving.

Therefore, if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account.

Details

Net 30 accounts need to be paid in full within 30 days. 60 accounts need to be paid in full within 60 days. In comparison with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you made use of.

To launch your business credit profile the proper way, you ought to get approval for vendor accounts that report to the business credit reporting bureaus. Once that’s done, you can then use the credit.

Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

Vendor Credit Tier – It Makes Sense

Not every vendor can help like true starter credit can. These are vendors that grant an approval with marginal effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.

You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may have to apply more than once to these vendors. So, this is to verify you are dependable and pay punctually. Here are some stellar choices from us: https://oldcs.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

Accounts That Do Not Report

Non-reporting trade accounts can also be helpful. While you do want trade accounts to report to at the very least one of the CRAs, a trade account which does not report can yet be of some value.

You can always ask non-reporting accounts for trade references. And credit accounts of any sort can help you to better even out business expenses, consequently making financial planning easier. These are providers like PayPal Credit, T-Mobile, and Best Buy.

Retail Credit Tier

Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then progress to the retail credit tier. These are service providers like Office Depot and Staples.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications.

One example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a D-U-N-S and a PAYDEX score of 78 or higher.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move to the fleet credit tier. These are businesses such as BP and Conoco. Use this credit to purchase fuel, and to repair, and maintain vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN.

One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411 small business phone listing.

Shell may claim they want a particular amount of time in business or revenue. But if you already have sufficient vendor accounts, that won’t be necessary. And you can still get approval.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Cash Credit Tier

Have you been responsibly managing the credit you’ve up to this point? Then move onto the cash credit tier. These are companies such as Visa and MasterCard. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.

One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or higher. And they also want you to have 10 trade lines reporting on your D&B report.

Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).

Additionally, they want you to have an established small business.

These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are often MasterCard credit cards. If you have 14 trade accounts reporting, then these are in reach.

Monitor Your Business Credit

Know what is happening with your credit. Make sure it is being reported and deal with any errors as soon as possible. Get in the practice of checking credit reports and digging into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: fastcs.wpengine.com/monitoring.

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business.

Update Your Data

Update the information if there are errors or the information is incomplete. At D&B, you can do this at: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp. So for Equifax, go here: www.equifax.com/business/small-business.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to contest any errors in your records. Errors in your credit report(s) can be corrected. But the CRAs generally want you to dispute in a particular way.

Disputes

Disputing credit report mistakes usually means you send a paper letter with duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always mail copies and keep the originals.

Fixing credit report mistakes also means you specifically spell out any charges you contest. Make your dispute letter as clear as possible. Be specific about the issues with your report. Use certified mail to have proof that you mailed in your dispute.

A Word about How to Get Credit for Business

Always use credit responsibly! Never borrow more than what you can pay off. Keep track of balances and deadlines for payments. Paying off on schedule and fully does more to increase business credit scores than pretty much anything else.

When you get credit for business, it pays. Great business credit scores help a company get loans. Your lending institution knows the business can pay its debts. They know the small business is for real.

The small business’s EIN attaches to high scores and loan providers won’t feel the need to demand a personal guarantee.

Takeaways on How to Get Credit for Business

Business credit is an asset which can help your business in years to come. You can get credit for business.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.