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3 Easy Steps to Help You Build Good Business Credit
 

Keywords: business credit, steps, credit market, business structure, business credit assessment
 

Do you want to start your own business? Do you have a great business idea? If so, now all you need is business credit. That way you’ll be able to borrow money against your business without having to dip into your personal savings or use your personal credit. This means less risk for you, the owner. Some credit reporting agencies sell a business FICO score based on both the risk of the business and the personal credit of the owner. In some instances, the owner’s personal credit is linked to the business credit, but it’s best to keep them separate if you can. Building your business credit will be completely different from how you build your personal credit rate. You also won't have the same credit protection with business credit that you do with personal credit.


There are certain steps that you can follow to help make sure your business credit gets off to a great start.


First, you must set up the proper business structure and take the proper steps to ensure your business appears stable to the business credit bureaus. That means getting the right occupational licenses, establish a corporate structure and build a business credit profile. A business credit profile will help you to build business credit without using your personal credit. There are many benefits of having a business credit profile. For one, you will have more cash for the business, convenience in purchasing, protection of your personal assets, limiting of personal liability from the business, and the ability to prepare your business for future lending needs.


Secondly, you need to borrow or buy products and services from companies that will report your credit history to the major business credit reporting agencies such as Dunn and Bradstreet and Experian. Unlike personal credit ratings or FICO scores; your income or income potential, will play a huge roll in your business credit scores. The top FICO scores are reserved for the largest most stable businesses. But don’t be discouraged, with a little time, your business FICO score will skyrocket!


Next, in order to enter the business credit market, you’ll need to do a business credit assessment to determine if you comply with the lender and credit bureau’s requirements. A great place to start is to look for businesses that issue credit without the need for established business or personal credit checks or guarantees. Once you have transacted business with these vendors on credit, you'll be able to use those credit references to build your credit profile with the credit reporting agencies.


In many states, you can find non-profit organizations and/or government organizations that will help you with setting up business credit. There are often loans available for start-up businesses and sometimes even government grants. Check your state government web sites for such organizations. Many retired owners and businessmen will volunteer to help start-up businesses. By researching your options prior to a business start-up; you will not be struggling later with questions. With any luck building your business credit will be a smooth transaction with a huge net profit for you in the end!


Source: http://ezinearticles.com/?3-Easy-Steps-To-Help-You-Build-Good-Business-Credit&id=109640


 


 


 

 

 

 

 

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3 Easy Steps to Help You Build Good Business Credit

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