Establishing your Business Credit

In addition to personal credit, creditors and suppliers are increasingly using business credit reports to make lending and credit decisions.  That’s why it’s important to establish a separate credit report for your business.

If your business is new, or if you haven’t yet established business credit, obtaining trade lines is a great way to begin building your business credit report.  To do this, creditors and suppliers need to be able to validate your business information.  To start this process, you should:

•         Incorporate your company so that it is seen as a separate business entity
•         Obtain a federal Employer Identification Number
•        Open business bank accounts in your legal name
•         Set-up a dedicated business phone line for your business and make sure it is listed.

Once you’ve completed the above steps, you can request business credit in your company name.  Your business trades then are reported to the major credit reporting bureaus, which will begin to create a robust business credit report that gives lenders and suppliers quality information about your company and boosts your ability to obtain loans, increase credit lines and earn more favorable credit terms.