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How to Open a Business Credit File

Published By Janet Gershen-Siegel at June 11th, 2018

Open a Business Credit File – It’s Easy

We can show you how to open a business credit file. You can do it!

Written by Janet Gershen-Siegel

Opening a business credit file and building business credit means that your firm attains opportunities you never assumed you would. You can get all new equipment, bid on real estate, and cover the company payroll, even when times are a bit lean. This is specifically helpful in holiday companies, where you can go for several months with few sales.

As a result of this, you should really focus on developing your company credit. Enhance and maintain your scores and you will have these opportunities. Do not, and either you do not get these opportunities, or they will set you back you a lot more. And no company owner wants that. You have to understand what affects your small business credit before you can make it better.

Your Payment History is Important

Late payments will impact your business credit score for a good seven years. If you pay your company (and personal) debts off, as speedily as possible and as fully as possible, then you can make a very real difference when it relates to your credit scores. See to it to pay without delay and you will reap the rewards of punctuality.

Credit History Length Matters

This is generally how long your firm has been using company credit. Newer small businesses will have brief credit histories. While there is not too much you can specifically do about that, do not stress. Credit reporting bureaus will also look at your personal credit score and your background of payments. If your consumer credit is good, and in particular if you have a relatively long credit history, then personal credit can come to the rescue of your company.

The reverse is also right– if your individual credit history is poor, then it will impact your company credit scores until your small business and personal credit are split.

Personal Credit Can Influence Business Credit

Are you having a bad business year? Then it could land on your consumer credit score. And just in case your small business has not been around for too long, it will directly impact your corporate credit. However, you can unlink them both by taking steps to split up them. As an example, if you get credit cards just for your company, or you open business checking accounts and various other bank accounts (or perhaps get a business loan), then the credit reporting agencies will start to treat your private and company credit on an individual basis. Also, be sure to incorporate, or at least file a DBA. You can also take care of your company’s bills with your firm credit card or checking account, and insure it is the small business’s name on the bill and not yours.

Do Not Let Your Credit Utilization Rate Hurt Your Small business

Credit utilization rate just shows the amount of money you have on credit which is then divided by your total available credit. Lenders in general do not like to see this go above 30%. If this is increasing, spend down and repay your debts before borrowing more.

The Credit Reporting Bureaus Can Get it Wrong

Just Like as every single entity out there, credit reporting agencies just like Equifax and Experian are only as good as their data. If your company’s name is similar to another’s, or your name is a lot like another business owner’s, there can possibly be some errors. So check those reports, and your business report at Dun & Bradstreet, PAYDEX.

Stay on top of these reports and question charges with paperwork and clear-cut communications. Do not just allow them to stay wrong! You can correct this! And while you’re at, it you should also be overseeing the credit reporting bureau which just handles individual and not corporate credit, TransUnion. If you do not know exactly how to pull a credit report, do not stress. It is easy– just use the above links.

Once you open a business credit file, find out what impacts your business credit scores. And you’ll be that much nearer to developing better businesse credit. What frustrates you the most about business credit reporting?

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