subject: Improving Your Business Credit File [print this page] Establishing a business credit file is essential in accessing all the funding that is potentially available to a company. Without a separate organizational credit identity, business owners end up shouldering personal liability for their company's credit.
Just like a personal credit history, a business credit file is built up by maintaining a good credit record. The credit reporting agencies that provide business credit histories are Experian, Equifax and Dun & Bradstreet. Initially, when a business credit application is filed, credit providers check the company's current business credit history from these agencies. However, there are a number of other items that are also investigated before assigning a credit score.
Hiring a Business Credit Building Service Helps Establish Credit File
Hiring a business credit building service is a tested method of establishing a business credit file that is available online. Credit providers will check up to 20 different items when approving a business credit application, and often business owners have difficulty managing or completing all 20 items on the list on their own.
For example, one of the 20 items is having a business that was incorporated or formed as a limited liability company (LLC) to receive funding reserved for companies with an Employee Identification Number (EIN). Credit providers will also check to see if your company has a business phone number listed in local and national 411 assistance directories. Having a business credit building service will not only tell you the 20 items that are required to achieve good credit and funding, but will also walk you through the steps until the 20 items are completed.
Another item on the list is that a business must open a credit file with all three major business credit reporting agencies. Each of these national agencies is a major source of information for different groups of credit providers. By establishing a file with each agency, businesses open up the maximum number of potential credit sources for which they can qualify for loans.
When businesses hire a business credit building service, they should try to find one that provides guidance on meeting the requirements of all 20 items on the business credit file checklist along with all necessary information for opening a file with each of the three national business credit agencies.
Additionally, make sure to ask the financial advisor you hire to give you access to a database of hundreds of credit vendors throughout the United States that provide loans without requiring a personal guarantee from borrowers.
A business credit report also requires that businesses have at least three credit cards. Make sure that the service you choose provides where your business can find three business credit cards that do not rely on personal Social Security numbers and credit.
Without an independent business credit record, companies may have a hard time competing with other firms that have access to the capital available with business credit files. Wells Fargo has warned that businesses that fail to establish business credit will not be able to take advantage of a whole category of business-specific loans.
