The Fastest Way to Establishing Your Business Credit!
What We Do?
We show you step by step how to obtain your company`s Business/Corporate credit in 90 days, receiving a Duns & Brad credit score of 75-85 which is considered exellent credit.
What is Business Credit?
Business credit is a measure of an organization’s ability to obtain goods or services based on a promise to pay for them later. I’ll take this for $10,000 and pay you back later, deal? This term can refer to the ability of a business to be loaned money; be it an unsecured business loan or a secured business loan. The goods, services, or cash obtained using business credit are usually not personally guaranteed by the owner or representative of the organization. Essentially, business credit allows for borrowing against the assets of the organization, instead of the owner’s personal property.
What is the difference between business credit and personal credit?
The major difference is in the reporting and scoring. When an individual uses their social security number to apply for their first credit card, a credit profile will be create for them. Everyone has heard of a credit report and a credit score. Individual credit relies on a scoring system, FICO, which can place you in the range of 300–850 based on your history the latter score of 850 being flawless credit. The credit score is a numerical expression based on a statistical analysis of that person’s credit files to represent them to a business with no prior history with them. A personal credit score is primarily based on credit report information typically sourced from credit bureaus like Equifax, Trans-Union, or Experian.
Business Credit on the other hand does not miraculously start when you start a business. Your score will be on a scale of 0 – 100 (75 and higher is considered excellent). For those of you who have tried to establish a business credit profile, understand that it actually takes some work. It can be classified as trade credit, in the sense that an arrangement between businesses to buy goods or services without making immediate cash payment. The selling business will provide the purchasing business with an agreement to bill them later (accounts receivable), stipulating a fixed number of days or other date by which the customer should pay (accounts payable). If you manage your business credit properly it can be an essential element of capitalization in an operating business. You can reduce your upfront obligations, keep your working capital positive and forecast your over all finances. Information about your businesses payment history will be recorded by the other business. Those businesses do not have to report. That’s where it gets further from personal credit. Information about all your trade history will be collected from business credit bureaus (voluntarily) then compiled into a report and applied to your businesses name, address and EIN (employer identification number.
What business credit bureaus are there?
The business credit bureaus compile data to generate a report about your company’s business credit transactions. Most of the time a company’s chance of getting a loan will rely almost exclusively on the credit report of the major bureaus. There are a couple business credit bureaus, but the major players include:
How does a company establish business credit?
Make sure you are actually a business, or form one
The first step in establishing business credit, is to make sure you are actually a business. This can be done by forming a corporation or LLC to operate your business under an EIN or FIN.
Make sure all licenses and requirements are met
If you run a company that requires certain licenses or certifications, make sure you have them and they are current. You do not want to throw up any red flags to either the bureaus or the company you are trying to obtain credit from.
Mistakes to Avoid