Establishing a line of credit for your company
Learn how to qualify for business credit and how to keep your personal and company credit histories in good standing by watching this video.
While you're figuring out your beginning fees and expenditures, you'll want to make sure your credit is in excellent standing as well as possible. Loan applications for small companies are often rejected due to a lack of credit history, which is one of the primary reasons for this. Bad credit history may also have an influence on your insurance premiums as well as the desirability of your company to prospective partners, suppliers, and vendors, among other things.
To do so, it's critical to cultivate and maintain strong credit ratings - for both your personal and corporate lines of credit.
Keep your personal and corporate credit histories in excellent standing.
Existing firms have the benefit of having a proven track record of financial success. However, loan eligibility for a new firm is often determined by the personal credit score of the business's founder.
While not every small company owner has excellent credit, some may be in the process of acquiring credit at this time. The Consumer Financial Protection Bureau (CFPB) provides information to assist individuals who have short credit histories in getting their financial lives on track.
The Consumer Financial Protection Bureau's Credit Reports and Scores website is a useful starting point for most individuals who want to enhance their credit history and score. When it comes to credit, the Federal Trade Commission provides some suggestions on how to improve your credit history.
Make an application for business credit.
Establishing and maintaining business credit may assist your firm in obtaining finance when you need it and at a better rate than you might otherwise get. It may also assist you in negotiating supplier agreements and safeguarding your company's name against identity theft.
One of the first tasks you'll want to do is to apply for a Dun & Bradstreet number, also known as a DUNS number, to identify your company. Your company's DUNS number is a nine-digit identification number that is unique to each of your company's physical locations. Dun & Bradstreet also provides advice on how to establish and maintain good company credit.
Before you look for a loan or line of credit, educate yourself on how the law protects you from being discriminated against.
Your credit score should be checked on a regular basis.
It's critical to keep an eye on both your personal and corporate credit reports, particularly if you suspect that you've been the victim of identity fraud.
Visit the Annual Credit Report website, which is the only approved source for the free credit reports that are required by law, to keep track of your personal credit.
You may get a copy of your company's credit report from Experian, Equifax, Dun & Bradstreet, or any number of other smaller credit reporting organizations to keep track of your business credit.
Find other resources to assist you in checking and monitoring your credit.