Credit Small Business - Ten steps to build credit for your business

A lot of small business owners do not take the time to establish business credit for their organization. When we started to take our business, our personal credit and assets are important resources that allow us access to credit and capital to our company.

Before you develop business credit, the better!

Good business credit is the lifeblood of the organization. In these economic times, we begin to understand the crucial need to establish business credit. It makes a world of difference in the interest rate you receive, how much capital you have access, and setting the terms of rents, insurance premiums, and commercial loans.

At some point in the life cycle of your organization, you should begin to build business credit as an entity separate and distinct from your personal credit. The two companies have corporate credit Dun and Bradstreet and Experian. Although, I'm not partial either, I used Dun and Bradstreet to build business credit for my company at the end of my first year of being in business.

Recently, I applied for another credit card company. They even used my personal credit as a reference. Your company must be in force for at least three years before the financial institutions, trade creditors and suppliers begin to use the credit to businesses as a primary resource.

Here are ten steps to build business credit:

1. Establish your business as a separate entity (eg, C Corp., S Corp., LLC.)

2. Learn the requirements for banks and credit agencies.

3. Establish credit with suppliers based on personal credit. Ask them to report your transactions to the credit bureaus.

4. Applying for a loan through the SBA (Small Business Administration) or association of undertakings

5. Obtain a Dun and Bradstreet D-U-N-S number.

6. Doing business with suppliers of small size. Did you use a caterer for your party last holiday? You have a company that provides water bottle water bottles to your office on a weekly basis? You have a small print shop that used for the copies and binders? Find out if your payment history with the larger vendors have been sent out and reflected in your credit history. Sometimes, and sometimes are not. If not, then use them as a supplier to be contacted by Dun and Bradstreet or Experian.

7. Once a payment history with these small companies, submit their information to Dun and Bradstreet. These providers must be members of Dun and Bradstreet, and in order for you to use as a reference. Dun and Bradstreet will ask you to verify your payment history with them. Dun and Bradstreet will ask for six suppliers. Give them more. Some of your suppliers may refuse to submit payment history.

8. Scored Paydex. Make sure you have at least four providers reporting your payment history so you can get a Dun and Bradstreet rating. The score is different from the Dun and Bradstreet rating Paydex. It is extremely important because this is what the institutions use to determine the financial capacity.

9. Check your credit to businesses twice a year to ensure that data are accurate.

10. If necessary, identify ways to improve your business credit.

If you are careful and follow these ten steps, you will definitely be on your way to control your financial destiny! Much success! ......