Building Credit for Your Business
Acquiring and maintaining good personal and business credit is essential when starting a business. Poor credit can lead to loan application rejections, high insurance rates, and may make your business less attractive to potential partners, vendors, and suppliers.
Therefore, it’s crucial to cultivate and sustain a healthy credit score for both personal and business lines of credit.
Manage a Positive Personal and Business Credit History
Established businesses have the benefit of having a financial track record. However, to be eligible for a new business loan, the owner’s personal credit score is often considered.
While not all small business owners possess good credit, some may be in the early stages of establishing it. The Consumer Financial Protection Bureau (CFPB) provides helpful suggestions for individuals with limited credit histories who are starting.
Most people can benefit from the CFPB’s Credit Reports and Scores website to refine their credit history and boost their scores. If you require credit repair, the Federal Trade Commission provides advice.
Apply for Business Financing
Creating and managing your business credit is essential to receiving financing when you need it and securing better terms. It can also help you negotiate supplier deals and safeguard your business against identity theft.
One of the initial steps you should take is to register for a Dun & Bradstreet number, or DUNS number. A DUNS number is a unique identification number for each business location. Dun & Bradstreet also provides guidance on creating business credit.
Before seeking a loan or line of credit, learn about the legal protections against discrimination.
Check and Manage Your Credit
Monitoring your personal and business credit reports is critical, particularly if you believe you have been the victim of identity theft.
- To track your personal credit, go to the Annual Credit Report website, which is the only authorized source for free reports guaranteed by law.
- To monitor your business credit, you may obtain a copy of your business report from Experian, Equifax, Dun & Bradstreet, or other smaller credit reporting companies