7 Steps To Business Credit
Register your business with the state.
Whether you operate as a LLC, LLP, or Corporation your business has the ability to establish a credit file separate from you as an individual. All personal assets are protected if you set up your business as either or. If you operate as a sole proprietorship, it’s important to understand there is no legal or financial separation between you and your business. If that’s the case, when you obtain credit or apply for funding, all activity will be solely tied to you as an individual and reflected on your personal credit reports.
Obtain a federal tax identification number (EIN).
FEIN is basically a social security number for a business. It is required on federal tax filings, and is also required to open a business bank account in the name of the corporation or LLC. In order to comply with IRS requirements, many larger businesses also require an EIN from their vendors in order to pay them for services provided.
Open a business bank account.
Open a business checking account in the legal business name. Once open, be sure to pay any of the financial transactions of the business from this account.
Establish a business phone number.
Whether you use a landline, cell phone or VoIP, have a separate number for your business and in your business’ legal name. List that number in the directory so it can be found. I would highly suggest using a vertial address or P.O. Box that comes with a physical address to keep your business address seperated from your personal address.
Register with Duns and Bradstreet.
This number is used to create your business credit file similar to how your Social Security number can be used to identify your personal credit reports.
Create a Net 30 account
These are accounts that extend you 30 days to pay the bill in full after you have purchased products. Net 30 accounts allow you to buy now and pay later. Commonly known as vendor credit, supplier credit, and trade credit. This will be your first account to report to your credit so PAY IT ON TIME!
Create a NAV account
Nav is a credit monitoring service for your business credit.
If you're here its almost for certain that we don't have to explain the benefits of business credit. Good luck on your journey. We will continue to share learned information to help those affiliated, after all the goal is for us to GET RICH TOGETHER!