/* Use this with templates/template-twocol.html */ The Path to Wealth: How to Build Business Credit

Monday, October 6, 2008

How to Build Business Credit

If you are at the point of wanting to build business credit, I’m going to assume that you have already set up your business and filed all the appropriate paperwork for licensing and so forth. Having that out of the way, you are now ready to start building credit for your business. Here are the steps

Open a Business Checking Account

This is important in showing that your business is established. It will all be monitored by Dun & Bradstreet. Soon enough, you will be rated based on the amount of money you hold in your account at all times. For now, just worry about getting it set up.

List Your Business

You should take the time to have your business listed on 411 search, yellow pages, and google business. Also, if you have a website, make sure it is listed with all the major search engines. It is recommended that you have your phone and a fax numbered registered in your business name.

Dun & Bradstreet

DNB is the largest tracker of business credit. They keep track of business credit; and for a fee, they sell different business profile options and business credit reports. You will need to get on their website and apply for a DUNS number. This number acts as an identification number for your business. It typically takes 30 days for them to set this number up, and you don’t need to pay for it. They will make the file and add to it as soon as you start applying for credit under your business name.

Start Applying

At this point you can start applying for credit. The easiest place to set up credit is with vendors with whom you already have a relationship. Also, you can try office supplies stores such as staples, Kinkos, etc. These office supply/print stores typically grant credit easily to businesses. Some business credit cards are given very easily; others require a longer history. You can always work your way up. Try to get at least 5 vendors or creditors that will report your credit.

Pay Early

You will be given a Paydex rating for your business. Besides the amount of money in your account, they will also look at how long it takes you to pay your “net 30” bills. I recommend that you pay them as soon as possible, because each day counts in the world of business credit. Paying them in fifteen days is better than paying them in 20. You want the best Paydex score you can get. The better your score is, the better your opportunities for loans.

If you like our articles, subscribe for free to The Path to Wealth.

No comments: