Here are a few steps you can take to set up your business properly for business credit:
- Establish a separate legal entity: Your business should be registered as a separate legal entity, such as a corporation or limited liability company (LLC). This will help to establish your business as a separate entity from yourself, and will make it easier to obtain credit in the business’s name.
- Get a separate business address and phone number: Your business should have its own address and phone number that is separate from your personal address and phone number. This will help to establish your business as a separate entity and will make it easier for lenders to contact you.
- Obtain a federal Employer Identification Number (EIN): This is a unique number assigned by the IRS to identify your business for tax purposes. It’s required to open a bank account and credit account in the name of the business, and it will also be used in credit reports.
- Obtain a DUNS Number from https://www.dnb.com.The Data Universal Numbering System, abbreviated as DUNS or D-U-N-S, is a proprietary system developed and managed by Dun & Bradstreet that assigns a unique numeric identifier, referred to as a “DUNS number” to a single business entity. It was introduced in 1963 to support D&B’s credit reporting practice.
- Build a strong business credit history: To establish a strong business credit history, you should apply for a credit account in the business’s name, and make sure to make all payments on time. You should also monitor your business credit reports to ensure that they are accurate.
- Maintain good financial records: It’s important to keep accurate financial records for your business, including income statements, balance sheets, and cash flow statements. This will help you to stay on top of your business’s financial situation and will make it easier for you to obtain credit when you need it.
- Be aware of personal credit: Your personal credit will also be considered when you apply for credit for your business, so it’s important to maintain a good personal credit score. If you have a poor personal credit score, it can be difficult to obtain credit for your business.
It’s important to understand that building business credit takes time and effort, so it’s important to be consistent and patient in following these steps. Consultation with a financial advisor or a credit expert may also be helpful.