Build a Business Credit File
As an entrepreneur, you know that building business credit can bring great rewards for your company. A strong credit profile can help your business secure affordable financing like business credit cards and loans while improving financial health by helping negotiate better prices with vendors and suppliers. You CAN build a business credit file by following the right steps.
While it’s often recommended to form your business as an LLC, corporation, or partnership to protect the credit profile of your enterprise and ensure success, this step may not always be necessary to establish one.
To build your business credit, make on-time payments to creditors and vendors who report payment data to major credit bureaus – this could include bank accounts, credit cards and vendor account providers – so your timely payments appear on your business credit report and build its history.
One way to potentially build business credit is by using a business credit card that reports to the major business credit bureaus. Compared with personal credit cards, business credit cards offer greater reporting flexibility to credit bureaus as well as help track spending and expenses more easily. When selecting business cards with low credit utilization ratios (total balance divided by total credit limits), which will play an integral part in scoring business credit ratings. You can compare business credit services here.
