Published By Janet Gershen-Siegel at August 2nd, 2017
Can you follow the steps to building corporate credit? Do you know where to establish corporate credit, and how? Building and improving your corporate credit isn’t so hard. Get ten easy steps to building corporate credit right here.
And once you understand what is considered a good corporate credit score, then you can work toward making your company’s credit score the best it can be.
If your business does not have one, these are easy to get. You will need to file for a D-U-N-S number via Dun & Bradstreet’s website. The number is free. The D-U-N-S number is necessary to get you into D & B’s system – which leads me to #2.
They each have slightly different ways how a business score is calculated. But right now, all you want to do is request your corporate credit reports. You can do so by clicking on the above links. They all get started with the D-U-N-S number, so get that first.
In case you’re wondering what is considered a good corporate credit score, it is:
If you’ve ever wondered, how does a corporate credit score work, part of that has to do with how quickly and thoroughly your business pays its bills. So if any of your credit reports are incorrect, you will need to formally dispute that. You can do so by providing receipts with a formal dispute.
The various agencies have slightly different means of doing this. However, they all require a written dispute and they all want to see copies of your receipts. Always be sure to keep the originals!
You need to itemize and be specific about what is wrong.
That is, if you have a bill for three separate articles and the credit reporting agency thinks you only paid for two of them, you will need to spell out exactly which line items you are showing receipts for.
Get your business’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax corporate credit report at: www.equifax.com/business/credit-information.
Disputing credit report errors generally means you send in proofs of payment. These are documents like receipts and cancelled checks. Never send the original copies. Always send copies and retain the originals.
Fixing credit report mistakes also means you specifically detail any charges you challenge. Make your dispute letter as crystal clear as possible. Be specific about the concerns with your report. Use certified mail so that you will have proof that you sent in your dispute.
You can dispute your company’s Equifax report here. Dispute your Experian report by following the directions here. And you can find D & B’s PAYDEX Customer Service phone number here. Stay on top of these as a priority because they are easy to fix and the fix will ripple through your scores.
When your name stays on the bills, credit reporting agencies won’t see your business developing a good payment history. And when you keep using your personal credit cards, your business won’t get a chance to pay those debts.
Make everything crystal clear for the credit reporting agencies. And get all business-specific items from the bank where your company does business.
While it may seem easier said than done, building corporate credit means keeping on top of your business’s bills. If you have ten days to pay, make sure you’ve paid by day nine, or day ten at the latest, and not day eleven.
If that is not possible, then you are going to have to try to find ways to be more responsible with corporate credit.
This can sometimes mean scaling back ambitions and borrowing less. It can also mean paying closer attention to risk.
For example, if your business depends on pistachio nuts, it might be directly affected by the political situation in the Middle East, given that so much of the pistachio crop is grown there.
Use a service like AnnualCreditReport.com to get your credit report from TransUnion (they monitor personal credit only), Equifax, and Experian. Why? Because, particularly for very small or very new businesses (and it goes double for corporations which fit both criteria), the big credit reporting agencies will sometimes look at personal and corporate credit together.
So you will need to stay on top of mortgage payments, student loan payments, car loan payments, and the like.
Personal bankruptcy will also affect your personal credit score which, in turn, will affect your corporate credit scores.
Know what is happening with your credit. Make sure it is being reported and deal with any inaccuracies as soon as possible. Get in the habit of taking a look at credit reports. Dig into the particulars, not just the scores.
Update the relevant information if there are inaccuracies or the information is incomplete.
Always use credit responsibly! Don’t borrow beyond what you can pay off. Keep an eye on balances and deadlines for payments. Paying promptly and in full will do more to elevate corporate credit scores than pretty much anything else.
Growing corporate credit pays. Great corporate credit scores help a business get loans. Your credit issuer knows the business can pay its financial obligations. They know the business is bona fide.
The company’s EIN connects to high scores and lenders won’t feel the need to ask for a personal guarantee.
Corporate credit is an asset which can help your company in years to come.
And, be patient! Much like Rome, corporate credit can’t be built in a day.