As a business owner, one of the best steps you can take to promote the success of your business is to establish a great credit rating. A business credit rating may be needed to do everything from obtaining a small business loan to pay for your inventory and more. However, a business credit rating is not the same as a personal credit rating, and there are specific steps that you must follow to create and improve your business rating.
There are various reporting agencies that you can check with now to review your rating, such as Dunn & Bradstreet, Experian Business, Equifax Business and others. All reporting to these agencies is voluntary, so keep in mind that some businesses may be open for many years and still do not have a credit rating. A closer look at how the process works will help you to establish a better business credit rating.
What You Need to Establish a Business Credit Rating
Before you worry about boosting your credit rating, it is important to understand what it takes to have an established rating. First, you should have a business bank account with a DBA, or doing business as, registration. This will include a business tax identification number and a registration of your business in your city and state. Once you have opened your business bank account, you can then contact Dunn & Bradstreet for a DUNS number. There is a formal application process for a number that will take approximately one month to complete. You can request an expedited processing of your application for a fee.
Choose Your Vendors Carefully
Not all vendors that you work with will report to the business credit reporting agencies. If you are serious about building a great credit rating, it is important that you research businesses and vendors that do report to the agencies and work with them. This may be for your office supplies, shipping, your inventory, different types of equipment that you purchase and more. You can learn more about which vendors report to which of the bureaus by simply asking them directly who they report to. Then, you can make a concerted effort to use those vendors and to pay your bills to them in a timely manner. Over time, this will help you to build a new credit rating or to improve your existing business credit rating.
Monitor Your Score
Just as you would monitor your FICO score for your personal credit report, it is also important to monitor your business credit rating. This is through a PAYDEX score, which has a rating of zero to 100. A score of 80 or better is considered to be great credit, and most lenders will consider extending credit to you with a good rating of 60 to 79 or better. If you have a score of zero to 25, you either have very poor credit or do not have established business credit yet.
As you can see, there are major differences between your personal credit rating and your business credit rating. The steps you would take to boost a business rating are somewhat different than what you would do to improve a personal credit score. Ultimately, this information can help you to establish and improve your business credit rating so that you can more effectively and easily accomplish your business goals. If you’d like to know more about how we can help you get money for your business, call us for a FREE Business Funding Consultation at (800)416-7713.
Rick Anderson @FundingExpert1
Rick Anderson is the CEO and Senior Small Business Funding Specialist with Small Business Money Solutions. A company that helps small business owners and self employed professionals get the financial solutions they need to GROW and thrive. Rick has been in business for over 22 years, and his company has helped 22,485+ small business owners and counting. Rick has also written a book on small business finance entitled 10 Easiest New Money Sources For Business Owners.
Connect with him https://www.linkedin.com/in/RickAndersonSmallBusinessLoans or if you would like to ask him a question, send it to [email protected] If you’d like a FREE ‘Business Funding’ Consultation, call him at (800)416-7713.