During dry spells businesses need credit to fund expansions.It takes a credit history to get credit.How do you begin building your credit history?Establish your business and look for loans of any size.Make sure your suppliers report your payment history to the national credit bureaus by opening accounts with them.You should get a DUNS number from Dun & Bradstreet if you are a lender.
Step 1: You should organize your business.
Before you can apply for credit, you need to establish your business.Form your corporation or your limited liability company as soon as possible.The IRS will give you an Employer Identification Number.You can open bank accounts in your business name.You can get a dedicated phone line in your business name.
Step 2: Obtain a loan from a bank.
Look for a loan from a bank.You need to start somewhere if you have no business credit history.If the loan is in your business name, it will be reported to the credit bureaus.It is possible that you will need to personally guarantee a loan.If your business can't pay back the loan, you agree to be personally responsible.A personal guarantee is required by some lenders because you are a new business.
Step 3: Look for a loan from an online lender.
A bank might turn you down for a loan if you have bad credit.You can still get a business loan from an online lender.Before signing up for a loan, it's a good idea to research online lenders.Check online reviews and see if complaints have been filed against the lender.Not every lender reports to the national credit bureaus.Credit bureau reports include OnDeck, Funding Circle, Lending Club, and BlueVine.FundBox, SmartBiz, and Lighter Capital do not.
Step 4: You can get a business credit card.
You can find a lot of offers online, or you can check your bank account.Ask if they report to the credit bureaus and then use a card that does.You can check to see if the card offers rewards or points.Only use the business credit card for business purchases.It looks like your business is a sham if you use a business card for personal purchases.If you mix business and personal finances, you can lose some of the legal protections of a corporation.
Step 5: You can use your credit.
You need to use it to build credit.Don't use a credit card if you get one.Use it as soon as possible.Ask for an increase in your credit limit after you have established a history of responsible use.Don't go too far.Don't max out your credit lines.Focus on using a small amount of credit.
Step 6: The accounts should be set up by the supplier.
You could use credit to purchase supplies.If you order a bunch of widgets, your supplier will give you 60 days to pay for them.To get a Dun & Bradstreet Paydex score, you need at least three supplier accounts.Credit information should be reported to the national credit bureaus by the supplier.You can have accounts with big retailers such as Home Depot.
Step 7: The required information should be gathered.
Dun & Bradstreet's Paydex score is used in most trade applications.Before you register with them, you should gather required information.You should collect your name, home address, title, email and phone number, company name and address company's legal structure.Your business started with your CEO's name number of employees.
Step 8: Register.
You don't have to pay for your number.If you want to register, you need to visit this website and provide the requested information.It takes 30 days to get your number.You can call if you have problems.You can get an expedited number if you pay a fee.The fee was $229 as of April.You can find links to each country on the Dun & Bradstreet website, if you are located outside the U.S.
Step 9: If necessary, add trade references.
Your payment history will not be reported to the national credit bureaus by some suppliers.You can list them as trade references on your Dun & Bradstreet profile.The data will be collected by the company.
Step 10: Improve your credit score.
Each significant owner's credit history will be looked at by many banks.If you improve your credit score, you will be able to get credit.You should review your credit report for errors.When you are current, an account might be listed as in default, while the wrong credit limit is listed.Make sure to dispute any errors with the credit bureaus.Pay your bills on time.Penalties and late fees will be accruing if you are late.Your credit score will suffer.You can lower the credit that you use.Your balance should not be more than 30% of the credit limit.
Step 11: Take care of your public records.
Business credit reports contain a lot of information.Court judgments, liens, and bankruptcies are also listed.You should keep this type of information off of your credit history.When you lose a lawsuit, a court judgment is entered against you.Unless you have a solid defense, you can avoid this situation by paying lawsuits.When someone has a legal right to payment, a liens can be added to property.All suppliers should be paid on time.
Step 12: Pay early.
Personal credit reports have less information on payment history than a business credit report.If possible, pay at least 30 days early.Dun & Bradstreet has perfect credit scores for those who pay early.
Step 13: Your business credit history can be monitored.
A quarter of small businesses have a major error on their credit report.You should raise any errors with the credit bureau and monitor your business credit history.There are documents that support your claim.If an account is late, you will want proof that you have made timely payments.Look for email confirmations.