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The Eye-Opening Benefits of Following a Business Credit Building Program

May 31, 2018
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A Business Credit Building Program May Be Right For You

Do you know the benefits of following a business credit building program? Following a business credit program means that your company acquires chances you never felt that you would. You can get new equipment, bid on real property, and cover the company payroll, even when times are a bit lean. This is specifically helpful in seasonal business enterprises, where you can go for calendar months with merely low sales.

Given this, you should focus on developing your business credit. Enhance and maintain your scores and you will have these chances. Do not, and either you do not get these business opportunities, or they will cost you a lot more. And no business owner wants that. You have to know what affects your company credit before you can make it better. A business credit building program can truly help.

The Benefits of a Business Credit Building Program: Credit History Length MattersBusiness Credit Building Program Credit Suite

This is generally the length of time your company has been using business credit. Naturally newer companies will have very short credit histories. While there is not so much you can particularly do about that, do not fret. Credit reporting agencies will also consider your personal credit score and your own background of payments. If your consumer credit is good, and especially if you have a fairly extensive credit history (that is, you did not just get your very first credit card a short while ago), then your personal credit can come to the rescue of your corporate.

Normally the reverse is also true. Hence if your private credit history is poor, then it will impact your corporate credit scores. This will happen until your company and consumer credit are separate.

The Benefits of a Business Credit Building Program: Your Payment History is Important

Late repayments will affect your company credit score for years. If you pay your small business (and personal) financial obligations off, as fast and completely as possible, then you can make a very real difference in your credit scores. Make sure to pay promptly and you will reap the benefits of punctuality.

Info on 7 Vendors Webinar Check out our best webinar with its trustworthy list of seven high quality vendors to help you build business credit.

The Benefits of a Business Credit Building Program: Your Personal Credit can Affect Your Corporate Credit

Having a dissatisfactory business year? Then it could wind up on your consumer credit score. And in case your firm has not been in existence for too long, it will directly have an effect on your company credit. Having said that, you can unlink the two by taking steps to uncouple them.

Such as, if you get credit cards only for your company, or you open up business checking accounts and various other bank accounts (and even get a business loan), then the credit reporting agencies will begin to treat your individual and small business credit independently. Also, make certain to incorporate. You can also take care of your company’s expenses with your business credit card or checking account, and ensure it is the business’s name on the bill and not yours.

The Benefits of a Business Credit Building Program: The Credit Reporting Bureaus Can Just Plain Get it Wrong

Just the same as every entity out there, credit reporting bureaus just like Equifax and Experian are only as good as their data. If a business’s name is similar to another’s, or your name is a lot like another small business owner’s, there could be some errors. So keep track of those reports, and your company report at Dun & Bradstreet, PAYDEX.

So stay on top of these reports and challenge charges with paperwork and transparent communications. Do not just allow them to stay incorrect! You can repair this! And while you’re at, it you should also be monitoring the credit reporting bureau which only handles consumer credit, TransUnion. If you do not know exactly how to pull a credit report, do not fret. It’s easy.

The Business Credit Building Program

Let’s talk about the process now.

Establishing corporate credit is a process, and it does not occur without effort. A business has to actively work to build small business credit. Having said that, it can be accomplished readily and quickly, and it is much more rapid than establishing consumer credit scores. Vendors are a big part of this process.

Undertaking the steps out of order will lead to repetitive denials. Nobody can start at the top with company credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll get a denial 100% of the time.

Business Fundability™

A business needs to be genuine to creditors and merchants. Due to this fact, a corporation will need a professional-looking website and email address, with website hosting from a supplier such as GoDaddy. And business phone and fax numbers should have a listing on ListYourself.net.

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

A company will also need a bank account devoted only to it, and it needs to have every one of the licenses essential for operation. These licenses all have to be in the identical, correct name of the corporation, with the same corporate address and phone numbers. Bear in mind that this means not just state licenses, but possibly also city licenses.

Dealing with the Internal Revenue Service

Visit the IRS website and obtain an EIN for the company. They’re totally free. Choose a business entity like corporation, LLC, etc. A small business can begin as a sole proprietor but should change to a type of corporation to reduce risk and make the most of tax benefits.

A business entity will matter when it concerns taxes and liability in case of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and tax obligations. Nobody else is responsible.

Setting off the Business Credit Reporting Process

Begin at the D&B web site and get a free DUNS number. A DUNS number is how D&B gets a corporation in their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s sites for the corporation. You can do this at https://www.creditsuite.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 way, Experian and Equifax will have something to report on.

Trade Lines

First you need to build trade lines that report. This is also called vendor accounts. 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 acquiring more credit.

These sorts of accounts often tend to be for the things bought all the time, like outdoor work wear, ink and toner, and office furniture.

But first off, what is trade credit? These trade lines are creditors who will give you starter credit when you have none now. Terms are ordinarily Net 30, versus revolving.

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

Info on 7 Vendors Webinar Check out our best webinar with its trustworthy list of seven high quality vendors to help you build business credit.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and attend to any mistakes as soon as possible. Get in the habit of taking a look at credit reports. Dig into the specifics, not just the scores.

We can help you monitor business credit at Experian, Equifax, and D&B for a lot less than it would cost you at the CRAs.

Contesting Inaccuracies, With or Without Credit Repair Software for Small Business

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

Disputing credit report mistakes typically means you specifically detail any charges you challenge.

A Word about Building Business Credit

Always use credit responsibly! Don’t borrow more than what you can pay off. Keep an eye on balances and deadlines for repayments. Paying on time and completely will do more to raise business credit scores than almost anything else.

Growing corporate credit pays off. Good business credit scores help a company get loans. Your lending institution knows the business can pay its debts. They know the business is for real. The business’s EIN attaches to high scores, and lending institutions won’t feel the need to ask for a personal guarantee.

Following a business credit building program creates an asset which can help your small business for many years to come.

Info on 7 Vendors Webinar Check out our best webinar with its trustworthy list of seven high quality vendors to help you build business credit.

Takeaways for the Benefits of Following a Business Credit Building Program

Once you learn what has an effect on your corporate credit score, you are that much closer to building better corporate credit. Using business credit building programs can help. Learn more here and get started with a business credit building program.

About the author 

Janet Gershen-Siegel

Janet Gershen-Siegel is the Head Finance Writer and Content Manager at Credit Suite. She has been admitted to practice law for over 30 years, with a focus on litigation and product liability, and is a published author, with writing credits at Entrepreneur, FedSmith.com and BusinessingMag.com.

She has a BA in Philosophy from Boston University, a JD from the Delaware Law School of Widener University, and a MS in Interactive Media (Social Media) from Quinnipiac University.

She regularly writes for Credit Suite, which helps businesses improve Fundability™, build credit, and get approved for loans and credit lines.

Her specialties: business credit, business credit cards, business funding, crowdfunding, and law

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