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Corporate Credit Secrets

Published By Janet Gershen-Siegel at November 22nd, 2017

Shh, These are Corporate Credit Secrets!

The best corporate credit secrets are that corporate credit cards and lines can be yours.

Corporate Credit Secrets: Every Company Needs Corporate Credit

Corporate credit is credit in a company’s name. It doesn’t tie to an entrepreneur’s personal credit, not even when the owner is a sole proprietor and the only employee of the business.

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

Corporate Credit Secrets: The Benefits

Given that corporate credit is distinct from individual, it helps to secure a business owner’s personal assets, in the event of legal action or business insolvency.

Also, with two distinct credit scores, a small business owner can get two separate cards from the same merchant. This effectively doubles buying power.

Another advantage is that even start-ups can do this. Going to a bank for a business loan can be a formula for frustration. But building corporate credit, when done the right way, is a plan for success.

Individual credit scores rely on payments but also additional factors like credit use percentages.

But for corporate credit, the scores actually only depend on if a company pays its debts on a timely basis.

Corporate Credit Secrets: The Process

Establishing corporate credit is a process, and it does not happen without effort. A corporation has to proactively work to establish corporate credit.

Nevertheless, it can be done readily and quickly, and it is much speedier than developing individual credit scores.

Merchants are a big aspect of this process.

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

Corporate Credit Secrets: Fundability

A corporation must be fundable to lenders and vendors.

As a result, a corporation will need a professional-looking web site and email address. And it needs to have website hosting bought from a merchant like GoDaddy.

Additionally, corporate telephone and fax numbers need to have a listing on 411.  Go here to take care of that: http://www.listyourself.net

In addition, the business phone number should be toll-free (800 exchange or the like).

A corporation must have a bank account devoted strictly to it, and it must have every one of the licenses necessary for operating.

Licenses

These licenses all have to be in the accurate, correct name of the business. And they need to have the same corporate address and phone numbers.

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

Corporate Credit Secrets Credit Suite

Learn more here and get started toward growing corporate credit.

Corporate Credit Secrets: Dealing with the Internal Revenue Service

Visit the IRS website and obtain an EIN for the small business. They’re free of charge. Select a business entity like corporation, LLC, etc.

A company can begin as a sole proprietor. But they will most likely want to change to a variety of corporation or an LLC.

This is in order to lessen risk. And it will make best use of tax benefits.

A business entity will matter when it pertains to taxes and liability in the event of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and taxes. No one else is responsible.

Sole Proprietors Take Note

If you operate a company as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.

If you do not, then your personal name is the same as the company name. As a result, you can wind up being personally liable for all business debts.

Plus, according to the Internal Revenue Service, by having this arrangement there is a 1 in 7 possibility of an IRS audit. There is a 1 in 50 probability for corporations! Steer clear of confusion and significantly decrease the chances of an Internal Revenue Service audit simultaneously.

Corporate Credit Secrets: Starting the Corporate Credit Reporting Process

Begin at the D&B website and obtain a free D-U-N-S number. A D-U-N-S number is how D&B gets a small 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 small business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.

By doing so, Experian and Equifax will have something to report on.

Vendor Credit Tier

First you must build trade lines that report. This is also called the vendor credit tier. Then you have an established credit profile, and will get a corporate credit score.

And with an established corporate 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 work wear, ink and toner, and office furniture.

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

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

Details

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

To kick off your corporate credit profile the proper way, you should get approval for vendor accounts that report to the business credit reporting agencies. As soon as 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.

Little-Known Credit for Corporations Credit Suite

Vendor Credit Tier – It Makes Sense

Not every vendor can help in the same way true starter credit can. These are vendors that will grant an approval with minimal 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 need to apply more than one time to these vendors. So, this is to confirm you are responsible and will pay on time. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

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 which include 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 such 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 more.

Fleet Credit Tier

Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are companies such as BP and Conoco. Use this credit to buy fuel, and to repair, and maintain vehicles. Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make certain to apply using the corporate 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 corporate phone listing.

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

Corporate Credit Secrets Credit Suite

Learn more here and get started toward growing corporate credit.

Cash Credit Tier

Have you been responsibly handling the credit you’ve gotten up to this point? Then progress to the cash credit tier. These are service providers such as Visa and MasterCard. Only use your Social Security Number 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 more. 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 corporation.

These are service providers like Walmart and Dell, and also Home Depot, BP, and Racetrac. These are commonly MasterCard credit cards. If you have 14 trade accounts reporting, then these are attainable.

Corporate Credit Secrets Credit Suite

Learn more here and get started toward growing corporate credit.

Corporate Credit Secrets: Monitor Your Corporate Credit

Know what is happening with your credit. Make sure it is being reported and deal with any mistakes ASAP. Get in the practice of taking a look at credit reports and digging into the details, and not just the scores.

We can help you monitor corporate credit at Experian and D&B for 90% less than it would cost you at the CRAs. See: www.creditsuite.com/monitoring.

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

Update Your Records

Update the relevant information if there are inaccuracies or the relevant 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.

Corporate Credit Secrets: Fix Your Corporate Credit

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

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

Fixing credit report errors also means you precisely detail any charges you contest. Make your dispute letter as clear as possible. Be specific about the problems with your report. Use certified mail so that you will have proof that you sent in your dispute.

Dispute your or your corporation’s Equifax report by following the directions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.

You can dispute inaccuracies on your or your corporation’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.

And D&B’s PAYDEX Customer Service contact number is here: www.dandb.com/glossary/paydex.

Corporate Credit Secrets: A Word about Building Corporate Credit

Always use credit sensibly! Never borrow beyond what you can pay off. Keep track of balances and deadlines for repayments. Paying on time and fully will do more to increase corporate credit scores than almost anything else.

Establishing corporate credit pays. Good corporate credit scores help a business get loans. Your loan provider knows the corporation can pay its financial obligations. They know the business is authentic.

The corporate EIN connects to high scores and loan providers won’t feel the need to request a personal guarantee.

Corporate Credit Secrets: Takeaways

Corporate credit is an asset which can help your business for years to come. Learn more here and get started toward building corporate credit.

 

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