Unlike the credit card offers we are buried with when we enter college, the process of building business credit can be a bit more elusive. However, working to build your business credit is super important to any business owner, especially those who may have less than perfect personal credit. Good business credit is not only important if you are looking to obtain loans, but it can also be important for attracting new clients and opening up a range of payment options with your vendors. This is because, unlike personal credit, business credit is available for viewing by both your customers, your suppliers and your partners. So how do you get started with building credit for your business? Here are 3 steps to get you on your way.
1. Register with Duns & Bradstreet and obtain a DUNS number. This number is the “social security number” for your business. It is free to apply for and necessary to apply for credit. You can obtain your business’ DUNS number at www.dnb.com/duns-number.html.
2. Apply for a Business Credit card with your local banker. The limit does not have to be huge as every little bit helps. Try starting with a small limit of $500 if possible. The key is to begin making purchases for your business using the card and pay back those purchases the SAME month.
3. Attempt to open credit lines with your suppliers and vendors. The more businesses you have reporting to the credit bureaus that you pay your bills on time, the higher your credit score will go. However, be mindful not to take on more than you can handle. One or two vendor lines should be enough to get you started.
For more information on building your business credit as well as other access to other tools that can help you start and grow your business, visit www.werkflow.co and sign up for our free business management tool.