How to Build Credit for Your Business
The first and the most important step for establishing your business credit would be to separate your business credit from your personal one. It will minimize the risk of a personal credit history having a negative effect on the business credit. If you are not running your business as a sole proprietorship or as a general partnership, you have to establish a clear separation of the business affairs from personal activities.
- 1. Incorporate your business
- 2. Obtain EIN
- 3. Open a business bank account
- 4. Get listed with the business credit agencies
- 5. Create a line of credit with vendors/suppliers
- 6. Be consistent with your payments
- New vendors and suppliers are more willing to work with businesses that have a good credit history;
- Banks and lenders will generally offer you better interest rates and lower fees;
- It will give you more flexibility in negotiating payment terms with your vendors.