If you are a business owner, then you should be especially concerned about building business credit. Let’s talk about the basic facts that you should know about building business credit history.
What details are contained in your business credit report?
Just as consumers have personal credit reports, big and small businesses are also required to build a separate credit history for the company.
When applying for a business loan or business credit card, lenders and business credit card issuers will be evaluating your application based on your business credit report.
A business credit report contains information about your company such as the type of business you have, when it was established, payment history, the types of credit under your company’s name, and other important details.
Who looks into a business credit report?
Lending companies, insurance providers and even prospective investors will take a look in your report before making agreeing to make a transaction with your company.
What if you don’t have a business credit report?
Perhaps you may feel that building business credit is not necessary. However, if you consider your long term goals for your business, sooner or later, you will seek out financial support from a bank or a business loan lender.
Having a solid business credit history ensures your approval and gives you the privileges to enjoy good rates and flexible repayment terms. Without a business credit, getting approved for loans will be more difficult.
How can you establish a business credit report?
To start building your business credit, register your company with a business credit reporting agency. The leading business credit tracker in the US is Dun & Bradstreet and Experian for business.
As soon as you have registered, you can apply for a small business credit card to start building credit history. Make sure that your chosen credit card for business provides credit reporting.
Business credit card issuers will approve the application based on the entrepreneur’s personal credit. But what if you have poor credit? In that case, you can apply for a secured business credit card. A secured credit card will require a cash deposit into your account which acts as your credit limit.
When was the last time you checked on your business credit report?
Checking credit reports must be done at least twice a year. If you have a plan to apply for a business loan, order a copy of your report at least six months prior to your application.
This way, you can have sufficient time raising your score to ensure your loan’s approval and you will be in a much better position to negotiate with prospective lenders.
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Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2007 |
