A credit file is the raw data that credit reporting agencies collect and use to generate a credit report.Your credit report contains a list of your debts, as well as your name and contact information.You can't create a new personal credit file for yourself if you have poor credit.If you want to start your own business, you can create a separate business credit file from your personal one.It requires that you start a business, choose a corporate structure, and establish a credit line.Your business will be able to borrow money and establish lines of credit if you maintain a healthy business credit line.
Step 1: Start a business.
There are ways to structure your business so that you don't have to worry about your personal credit history if you start a business.An individual can legally create an alternate credit file if they create a businesscredit file.The effect that your personal credit file has on your ability to conduct business can be mitigated by having a separate businesscredit file.A healthy credit report will allow your business to take out loans, buy goods and services on credit, and establish a separate bank account and credit card.
Step 2: A business structure can be chosen.
A structure that creates a separate business entity is what you need to choose a corporate structure for your small business.You need to either form a corporation or a limited liability company.Both of these business structures are legal and separate the business from the individual that runs it.
Step 3: Obtain a Federal Employer Identification Number.
An EIN is required for every corporation.This number is similar to a social security number for your business and is used to file your federal business taxes, open a bank account in your name, and may even be required by vendors in order for you to pay them for their services.The IRS has a website where you can apply for your EIN.
Step 4: Get a DUNS number.
Your business must also have a DUNS Number.A nine-digit business identifying number is called a DUNS number.Your business will be listed in Dun & Bradstreet's business information directory if you register for a DUNS number.You can register online.When you register for your number, you need to give your legal name, business headquarters, mailing address, and telephone number.It is possible that you need to give the number of employees at your organization.
Step 5: Establish a dedicated business telephone number.
It is important to set up a business telephone number that is separate from your personal phone number.It is possible to link the phone number to a cell phone.Setting up a separate number will help you establish business credit since you will pay for the phone bill with your business checking account.
Step 6: You can open a business bank account.
You should open a checking account in the legal name of the business once you have created it.Once the account is open and you have deposited funds for the start-up costs of your business, you should use it for any financial transactions related to the business.Paying the balance of your business credit card is part of this.Establishing a business credit account will allow you to create transactions that can be tracked by a credit-reporting agency.
Step 7: You should get a business credit card.
You should apply for a business credit card once you have established a separate legal entity, set up a checking account and a phone line.Another entry on your business credit file is created by establishing a line of credit.Paying your bills in a timely manner will create a positive credit report.When selecting a business credit card, make sure to ask the company if they report to the credit reporting agencies.If they don't, choose a credit card company that does.
Step 8: A line of credit can be established with vendors.
You want to establish a line of credit with your suppliers once your business is up and running.Many suppliers extend lines of credit to give businesses the chance to finance purchases in order to preserve the company's cash flow.You can get office supplies, computers, and even marketing materials that are financed over a period of 30 to 60 days.At least five vendors are needed to establish lines of credit.You should ask the supplier to report your payment history to the credit-reporting agencies when you ask for a line of credit.
Step 9: Pay your bills on time.
Maintaining a healthy credit file requires you to pay your bills on time.As with personal credit, late payments are recorded in your file.Your credit rating can be affected by late payments.
Step 10: Take the time to review your business credit report.
Your business credit report shows how many businesses are interested in you.It is important that you review your business credit report regularly to make sure that there are no mistakes that could affect your rating.You should contact the credit reporting agency if you find a mistake.
Step 11: There is a guard against fraud.
Billions of dollars are lost annually to fraud in American businesses.It is possible to reduce your company's risk of becoming a victim of fraud by regularly checking your business credit report and being careful with your financial information.
Step 12: You should grow your business.
By paying your bills on time, showing your company's ability to successfully work with a number of vendors, and manage its credit lines, your business is building a healthy credit file.Your credit report is one of the most important ways to grow your business as it tells other companies and customers that you are financially stable and fiscally responsible.By continuing to expand your business, where feasible, and successfully managing your credit, your newly created credit file will allow you to access new lenders, better insurance rates and additional customers.