subject: Hiring A Corporate Credit Builder Is The Most Efficient Way To Better Credit Scores For Business [print this page] Establishing high corporate credit scores can bring businesses a wealth of benefits and opportunities, but accomplishing this on one's own can be difficult and time-consuming. A better way to approach this problem is to utilize the services of a professional corporate credit builder.
Benefits of High Corporate Credit Scores
One of the first advantages of corporate credit is that business owners do not have to stake their personal finances to their company's credit. A corporation acts as a separate legal entity and thus owners are not liable for the company's debts.
Among the other benefits afforded by establishing corporate credit are:
The opening up of new lines of credit and financing that are not available when you use personal credit to finance your business.
More opportunities for your business to purchase real property.
Access to corporate credit cards that do not require personal credit checks.
The opportunity to build up one's corporate credit scores opening up many more financial opportunities than are not available when simply using one's personal credit profile.
No personal guarantee is required to obtain business loans or corporate credit cards.
The higher the company's corporate credit score, the more opportunities that will be available for that company. However, building up credit scores is not an easy task especially for brand new businesses.
The Benefits of a Corporate Credit Builder
Businesses often find that it makes more sense to hire outside firms to handle certain tasks rather than trying to master these on their own. When a company tries to take on too many secondary chores, they lose their focus on the main function of the business. Corporate credit builders are professionals with experience and skill in handling the specific task of improving their client's credit scores. A corporate credit builder will work with the main credit reporting agencies to establish a credit file for your business. The most important credit agencies are Experian, Equifax and Dun & Bradstreet. If you are just starting a business, the first thing you must do is open files with these three national reporting agencies. Each agency provides new lines of credit for your business.
In order to qualify for many types of business credit, a company must first pass a review involving a 20 item checklist designed to evaluate the credit trustworthiness of a company. Examples of the items on this checklist are:
Business Legal Name: In order to qualify for many types of business loans, a company must be formed as a corporation or limited liability company (LLC). The business must also have a good standing in the filing state and in the state where the company is located and doing business.
Business Phone: The company's business phone number must be listed in local, national and 411 operator assistance directories. The number must be a valid business phone number listed using your exact legal business name or DBA.
Experian SBR: The company must be listed in the Experian Smart Business Reports database.
Equifax SBFE: The company must be listed with Equifax's Small Business Financial Exchange. Banks, in particular, look for the Equifax corporate credit report.
Dun & Bradstreet: The company must be listed in Dun & Bradstreet's business credit reporting service using your exact legal business name or DBA.
In addition to the items above, there are 15 other Employee Identification Number (EIN) only financial compliance items that businesses must meet in order to qualify for important lines of credit. A corporate credit builder will be familiar with these requirements along with every other detail that must be addressed to improve one's credit opportunities. For example, to build good scores in the Experian Smart Business Reports listing, companies must have at least five vendor reporting trade lines and three business credit cards not backed with a personal guarantee. Finding vendor lines and corporate credit cards can be quite difficult for businesses looking to find these on their own.
Hiring a Corporate Credit Builder
Before signing any contracts, check to make sure that the credit building firm has a solid reputation and an established record in helping clients obtain strong credit scores. Look for industry standard credentials and memberships in professional business organizations. Also ask for references and testimonials from previous clients. Any company worthy of your business should be able to provide a list of clients who have benefited from their services. Obviously, a company that guarantees results is confident in its ability to provide its clients with exactly what they are seeking.
Studies have shown that companies that fail to take advantage of corporate credit early on tend to lose out on financing opportunities that may be available to their competitors. In order to stay at the head of the pack, corporations must start early in establishing and building up their credit scores.
