subject: Build Business Credit - The Brass Tacks [print this page] What are the basics one needs to know in order to build business credit? The first and most important thing is that business credit building is highly profitable for your organization and so you need to understand its workings. Building business credit is the way to go if you want to ensure that your business is a resounding success.
Everybody dreams of starting an enterprise that they believe in and in essence, being one's own boss. While the idea might sound great, it is important to ask oneself, is it really that feasible? It is, only as long as you keep a few concepts in mind. Startup cash is needed to start any business. The last thing you need to do is put your personal credit on stake to get this initial cost expense. If you work hard and establish business credit, you will not need to dip into your personal stash which is best kept reserved for familial needs and retirement purposes.
Difference between Business and Personal Credit
Personal credit and related scores are a known devil to most of us. We have all applied for personal credit cards and endured personal credit checks when we need loans. Things change a bit when we move toward business credit. It is essential that business and personal credit be separated from each other from the very beginning. This way when you dip into your business credit for business related purchases, there is no bearing on your personal credit. You can use facilities like business credit cards and small business loans without needing a check on your personal credit balance and condition. Do remember credit protection laws differ for business credit on many criteria. It is important to build business credit to avail all the benefits associated with it.
Credit Building Programs
Business credit, basically, judges how well a company or business will be able to pay back any debt incurred. Business credit building takes a long time and might be difficult to so without any help. The best thing to do is enroll in credit builder programs that enable you to create and sustain a good business profile as soon as possible.
How to Proceed
In order to create good business credit, you need to ensure all your payments to vendors who are giving you credit are made on time without any delay. Ensure that the creditors report your timely payments to the bureaus like Equifax Business, Experian Business, Business Credit USA and of course, Dunn & Bradstreet. Only when you apply and submit all relevant information to these bureaus will you receive your scores from them.
As far as choosing vendors goes, make certain that they do not require any kind of personal guarantee or checks to be conducted before they lend you the credit. This belies the entire purpose of your trying to build business credit. This will also ensure that you have no liens thrust upon your personal property in the event that something goes wrong and you are unable to pay of a business credit payment.
