For a refresher, read how business credit works and why it's helpful.
Building Basics
You build business credit just like you build personal credit: use credit responsibly. Borrow money and repay as agreed. As each year passes, you build business credit that makes others more and more comfortable to work with you.
Credit Reporting
When you build business credit, you need to make sure your activity is reported to business credit reporting companies. Again, the concept is similar to consumer credit reporting companies, but there names may be different. You may want to register with and verify information at the following companies as you build business credit:
You’ll only build business credit if the people you work with report payment activity to credit reporting companies.
Act Like a Business
To build business credit, you need to act like a legitimate business. Make sure you meet state, federal, and industry requirements for conducting business. You’ll want to build business credit under a Tax Identification Number - not your personal SSN.
Incorporating can help limit personal risk, and it helps you build business credit. If you are not familiar with these concepts, work with an attorney and tax advisor to understand which business entities may be appropriate for you.
Your Personal Credit
When starting out, you’ll probably have to use your personal credit to get a loan. As you build business credit you can use your personal credit less and less. Try to open new accounts without personally guaranteeing loans or by pledging collateral.
