subject: Building Business Credit - Three Steps Every New Business Owner Should Know [print this page] Building Business Credit - Three Steps Every New Business Owner Should Know
Entrepreneurs must separate their personal and business lives when it comes to building business credit. Unless you understand the differences between personal credit and business credit, it could take you a long time to get started.
By following these initial three steps, new business owners will be able to protect their personal credit.
1. Apply for a business license in the county and state where your business is located.
2. Unless you will be renting commercial office space and using that address for your business, be sure to rent a P.O. Box number in the town where your business is located. That box number will become your business mailing address.
3. Call a telephone company to establish a new business phone number, either a wireless number, or a landline.
The main goal for new business owners is to establish themselves and their business credit rating which is a total and separate entity than any credit previously established through personal loans or credit reporting agencies.
Setting up a new business and building business credit allows you to apply for business credit cards, loans, and other related business purchases through your business's history, as compared to a personal line of credit.
Business Credit Reports vs. Personal Credit Reports
Did you know that there are two separate credit reporting entities? It's true. Personal credit history is monitored by three credit bureaus - Equifax, Experian, and Trans Union. Business credit, on the other hand, is reported without the use of your personal information. For example, you wouldn't want your business credit to be dependent upon the history of your personal auto loans, mortgages, or store credit cards.
By establishing new business credentials, you are also creating a history for your business credit reports. Remember, to get your business on the map, and to begin establishing business credit, the first things you need are a business license, a business telephone number, and a mailing address or P.O. Box that is separate from your primary residence.
By building business credit , your personal assets and credit history are no longer a requirement when you want to apply for a business loan. In addition, business profiles look completely different from personal profiles and you should want to protect your business credit. So many factors come into play and are at risk for new business ventures. By learning from the experts who have gone before you, you'll shorten the learning curve and protect your well-earned income.
Are you ready to take a positive step forward and learn more about building your business credit history, getting a positive Dun & Bradstreet (DNB) report, and being able to qualify for $150K in unsecured credit? It's easy when you know how to do it.
