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Hacks to Building Business Credit – Epic!

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

Hacks to Building Business Credit – Epic!

Check Out Our Hacks to Building Business Credit

How can you find hacks to building business credit? Check them out here.

Building business credit means that your company gets chances you never felt you would. You can get new equipment, bid on land, and take care of the company payroll. 

As a result of this, you should focus on building your business credit. Strengthen and maintain your scores and you will have these chances. Do not, and possibly you do not get these chances, or they will cost you a lot more. And no company owner wants that. You have to know what impacts your business credit before you can make it better.

Hacks to Building Business Credit: Your Payment History Is a Big Deal

Tardy payments will have a bearing on your small business credit score for a good seven years. If you pay your business (and personal) financial obligations off, as fast as possible and as completely as you can, then see what happens? You can make a very real difference when it pertains to your credit scores.

Hack it out and make sure to pay without delay and you will enjoy the benefits of promptness.

Hacks to Building Business Credit: Credit History Length Matters

This is basically for how long your company has been making use of business credit. Naturally newer businesses will have short credit histories. While there is not too much you can particularly do about that and there’s no real hack for that, per se, do not despair.

Credit reporting bureaus will also review your personal credit score and your own history of payments. If your personal credit is good, and especially if you have a fairly long credit history, then your personal credit can come to the rescue of your business. That is, you did not just get your first credit card recently.

Naturally the opposite is also true. So, if your personal credit history is bad, then it will impact your business credit scores until your business and personal credit can be separated.

Hacks to Building Business Credit: The Credit Reporting Agencies Aren’t Right All the Time

Needs Biz Credit - Hacks to Building Business Credit – Epic!Just the same as every organization out there, credit reporting bureaus such as Equifax and Experian are only as good as their records. If your company’s name resembles another’s, or your name is a lot like another business owner’s, there can possibly be some errors. So hack this and monitor those reports, and your business report at Dun & Bradstreet, PAYDEX.

Stay on top of these reports and dispute charges with paperwork and clear communications. Do not just allow them to stay wrong! You can resolve this! And while you’re at, it you should also be monitoring the credit reporting bureau which only deals with personal and not business credit. And that is TransUnion.

If you do not know how you can pull a credit report, do not stress. It is simple. You just use the above web links.

Hacks to Building Business Credit: Do not Let Your Credit Utilization Rate Drag Down Your Business

Credit utilization rate merely means the quantity of cash you have on credit. And it is then divided by your total available credit. Lenders normally do not want to see this go above 30%. So, for every $100 in credit, do not borrow on more than $30 of that.

If this percentage is climbing, you’ll need to spend down and satisfy your debts before borrowing more.

Hacks to Building Business Credit: The Method

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

Accordingly, an entrepreneur’s business and personal credit scores can be very different.

The Advantages

Given that business credit is distinct from individual, it helps to safeguard a business owner’s personal assets, in the event of a lawsuit or business bankruptcy.

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

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

Consumer credit scores are dependent on payments but also other factors like credit usage percentages.

But for company credit, the scores really just hinge on whether a company pays its debts timely.

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Get our business credit building checklist and build business credit the fast and easy way.

The Process

Building company credit is a process, and it does not happen without effort. A company has to proactively work to develop company credit.

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

Vendors are a big part of this process.

Performing the steps out of order will result in repetitive denials. 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.

Business Fundability™

A company must be bona fide to loan providers and merchants.

That’s why, a business will need a professional-looking website and e-mail address. And it needs to have website hosting from a merchant like GoDaddy.

Also, company telephone numbers must have a listing on ListYourself.net.

Likewise, the business phone number should be toll-free (800 exchange or similar).

A company will also need a bank account devoted purely to it, and it needs to have every one of the licenses essential for operation.

Licenses

These licenses all have to be in the exact, correct name of the company. And they need to have the same small business address and telephone numbers.

So keep in mind, that this means not just state licenses, but possibly also city licenses.

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Get our business credit building checklist and build business credit the fast and easy way.

Dealing with the Internal Revenue Service

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

A business can get started as a sole proprietor. But they will more than likely want to switch to a kind of corporation or partnership.

This is in order to lessen risk. And it will take full advantage of tax benefits.

A business entity will matter when it involves taxes and liability in the event of litigation. A sole proprietorship means the business owner is it when it comes to liability and tax obligations. No one else is responsible.

Starting the Business Credit Reporting Process

Begin at the D&B web site and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business into 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 company. You can do this at 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.

By doing this, Experian and Equifax will have activity to report on.

Vendor Credit

First you should build trade lines that report. This is also referred to as vendor credit. 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 start acquiring credit from the retail and cash credit tiers.

These varieties of accounts tend to be for the things bought all the time, like shipping boxes, ink and toner, and office furniture.

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

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

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Get our business credit building checklist and build business credit the fast and easy way.

You want 3 of these to move onto the next step.

Uline Shipping Supplies

Uline Shipping Supplies is a true starter vendor. You can find them online at www.uline.com. They offer shipping, packing, and industrial supplies, and they report to D&B and Experian.

You have to have a D-U-N-S number. They will request 2 references and a bank reference. The initial few orders may have to be paid in advance to first get approval for Net 30 terms.

Marathon

Check out starter vendor Marathon. Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the United States. Their comprehensive product line supports commercial, industrial, and retail operations. This card reports to Dun & Bradstreet, Experian, and Equifax. Before applying for multiple accounts with WEX Fleet cards, make sure to have enough time in between applying so they don’t red-flag your account for fraud.

Your SSN is required for informational purposes. If concerned they will pull your personal credit talk to their credit department before applying. You can give a $500 deposit instead of using a personal guarantee, if in business less than a year. Apply online. Terms are Net 15. Get it here: www.marathonbrand.com.

Grainger Industrial Supply

Grainger Industrial Supply is likewise a true starter vendor. www.grainger.com. They sell safety equipment, plumbing supplies, and more, and they report to D&B. You will need a business license, EIN, and a D-U-N-S number.

For under a $1000 credit limit they will approve nearly anyone with a business license.

Accounts That Don’t Report

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

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

Hacks to Building Business Credit: 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 habit of checking credit reports. Dig into the details, not just the scores.

We can help you monitor corporate credit at Experian, Equifax, and D&B for 90% less than it would cost you at the business CRAs.

Fix Your Business 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 normally want you to dispute in a particular way.

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.

Disputes

Disputing credit report errors usually means you specifically spell out any charges you contest. 

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.

A Word about Business Credit Building

Always use credit smartly! Don’t borrow beyond what you can pay off. Keep an eye on balances and deadlines for payments. Paying promptly and fully will do more to raise business credit scores than virtually anything else.

Growing business credit pays. Good business credit scores help a small business get loans. Your loan provider knows the business can pay its financial obligations. They understand the company is for real.

The business’s EIN connects to high scores and credit issuers won’t feel the need to ask for a personal guarantee.

Business credit is an asset which can help your business for many years to come.

Hacks to Building Business Credit: Takeaways

Once you know what bears upon your company credit score, you are that much nearer with our hacks to building business credit.

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