How To Establish Business Credit.
Establish Business Credit
When you first start a business, being able to get financing and business credit can be an added hassle that you weren’t anticipating. Many people rely on their own personal credit in the beginning, but it is a good practice to try to separate the two entities as soon as possible and start establishing business credit so your business can function on it’s own. This has the benefit of reducing personal liability and a possible negative impact on your credit report, as well as offer you increased lending opportunities.
Establishing business credit can be difficult, but it is an essential part of starting a business and with the proper steps you can be on your way to success.
- Apply for an EIN number through the IRS. An EIN is much like your social security number, only for your business. It gives your business a unique number that is used for tax purposes and business credit reporting.
- Register your business with the major credit bureaus.
- Get you finances in order and create financial statements that you can present to suppliers and banks when you apply for accounts.
- Start to make business transactions with companies who agree to report your payments. This can be as simple as establishing utilities in your company’s name, opening accounts with suppliers or applying for a business loan.
- Be sure to always make your payments on time and to check your business credit report to ensure that the companies you deal with are reporting your information to the major credit bureaus.
- If a business is not reporting your payments to the credit bureaus, ask them to do so.