Building Business Credit

One of the biggest challenges for startups and small businesses is that many have blank credit files.  While it may be true that there's nothing negative in there, there very well may be nothing positive, either.  It's just blank and that's a problem because an empty credit file is just as bad as having a bad credit file.

With so many different entities, from lenders to vendors, using business credit information to make decisions, empty credit files can make or break a startup or even an established company.  Just like your personal credit, a good credit rating can open the door for a business to borrow money, secure credit, get better payment terms or even obtain a contract.

So how do you go about establishing business credit?  Simply pay your bills on time and start documenting examples of good payment history.  That way, you'll help your company boost its businesss credit scores.  Five Stpes to Building Business Credit:

1. Open a credit card in the business name.
2. Only use the card for purchases you know the business can pay.
3. Pay all your suppliers on time.
4. Make sure your suppliers report your good payment history to D&B (Dun and Bradstreet) is essentially a credit reporting company for businesses.
5. Ask your bank for a credit card without a personal guarantee.