7 Secrets to Improving Your Business Credit
Building business credit should begin immediately. Developing an excellent credit rating is only going to benefit you, so it is worth undertaking. There are various ways to go about doing this, so your company gets started on the right foot.
- Get a Company Credit Card
There is a personal credit score and a business score. You may have excellent credit personally, but you need to start developing your company’s score. You can start this by taking out a credit card in your company’s name and only make purchases with that card.
- Establish Corporate Structure
To show lenders you are in this for the long haul, you want to establish what your company’s structure is going to be. You can set it up as an LLC or as a sole proprietorship. Look through the pros and cons of each one to see which one would work best for your company.
- Develop Stability
Before you start taking out loans to build up your business credit, you want to show your company is stable. This means acquiring all the proper licenses. You also want to show you have a permanent address, so a bank looking at your application knows you are legitimate.
- Have a Paper Trail
Your business will need supplies and equipment from other organizations. Make sure to do business with corporations that report back to the main credit bureaus. Establishing this paper trail will show you can be trusted with repaying invoices.
- Understand Loans
Once you take out a loan, you need to be certain you fully understand the terms. Know what the interest rates are and when you will be expected to pay it back in full. Do not be taken off-guard by anything, and always read the fine print.
- Pay Attention to Your Own Credit
Although building up your company’s credit score is important, you do not want to neglect your personal rating. Lenders usually look at both the company and personal score. Do not neglect payments on your personal credit card just because you are too busy handling business operations.
- Utilize Company Credit Cards Appropriately
You might have a credit card for your company now, but you do not want to go crazy with it. Only use it for business expenditures. You also do not want to take it to its maximum credit line.
As long as you are fiscally responsible, your business credit rating will benefit. Get started properly so that you do not have to play catch up later down the line.