Business Credit Resources

I've seen this touched on in other threads, but thought it would be nice to compile our collective knowledge on the subject. I have a new small business and would be very interested in developing and maintaining good credit in the business name just as I am trying to do personally.

Here's what I've read about establishing credit for a new business.

* Establish a true business entity like an S-Corp or LLC. A sole proprietorship cannot be its own entity.

* Make sure all IRS, State, Vendor information on the company (name, address, etc) matches.

* Get an EIN

* Get a D&B number (takes 30 days to get a free one) and get set up with Experian and Equifax business credit reporting

* Pick a bank you can stick with for a long time and set up an account. Business credit seems to put more stock in when the bank account was opened than when organization papers were filed.

* Get 1 Bank Loan, 3 Credit cards, and 5 vendor trade lines established. The key is getting creditors that will report to the business CRAs.
- Theoretically, the easiest way to get a bank loan for a new business is to get a CD and then take out a loan using the CD as collateral. Make sure they report.
- Office supply venders are generally easier to get credit cards with. Staples seems to be the easiest. Others will require you to have D&B info, etc. before you can get approved. It would be nice if someone could add a list of easy sources for business credit cards (no personal guarantee)
- I'm not too sure about vendor trade lines. Maybe some office supply places (like Reliable Office Supplies) would fit in here. It would be nice to have a list if anyone can add something here.

After you have got the above in place, you should have established a paydex with D&B and assuming you've paid everything on time, should be on your way to having a great business credit profile. Just like in personal credit, it's up to you to practice good credit habits to make it happen.

I would like anyone to add anything that might be helpful or insightful for the credit establishing process and especially if you know of sources for credit that are sympathetic to new businesses and will report to business CRAs.

 

They'll give you a free one, but they'll put the hard sell on you first. You go online and apply, then one of their reps will contact you to put the hard sell on you to buy one of their packages that will give you a number the next day. I just told them that I was working with some gov't agencies and they told me I needed a dnb number and that I could get one free. I said that I really wouldn't need a dnb except for the gov't work I was looking to do so I didn't really have a reason to spend the money. They said it would take 30 business days (6 weeks) to get my number in the system. I guess that's their way of pushing some people to pay. If you're applying for a number, then there's a pressing reason you need one generally.

Another free way to obtain a dnb number is to start opening tradelines that report to dnb. They'll set it up when they start reporting. Problem is, some tradelines ask for a dnb number when applying. The other thing is, you want to make sure that the info that dnb, experian, irs, etc. have on your company is identical. That's key to making sure your reports are accurate from the get-go.