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 Do you want to start your own business? Do you have a great
business idea? If so, now all you need is business credit.
That way you'll be able to borrow money against your
business without having to dip into your personal savings or
use your personal credit. This means less risk for you, the
owner. Some credit reporting agencies sell a business FICO
score based on both the risk of the business and the
personal credit of the owner. In some instances, the owner's
personal credit is linked to the business credit, but it's
best to keep them separate if you can. Building your
business credit will be completely different from how you
buildt your personal credit rate. You also won't have the
same credit protection with business credit, that you do
with personal credit.
There are certain steps that you can follow to help make
sure your business credit gets off to a great start.
First, you must set up the proper business structure and
take the proper steps to ensure your business appears stable
to the business credit bureaus. That means getting the right
occupational licenses, establish a corporate structure and
build a business credit profile. A business credit profile
will help you to build business credit without using your
personal credit. There are many benefits of having a
business credit profile. For one, you will have more cash
for the business, convenience in purchasing, protection of
your personal assets, limiting of personal liability from
the business, and the ability to prepare your business for
future lending needs.
Secondly, you need to borrow or buy products and services
from companies that will report your credit history to the
major business credit reporting agencies such as Dunn and
Bradstreet and Experian. Unlike personal credit ratings or
FICO scores; your income or income potential, will play a
huge roll in your business credit scores. The top FICO
scores are reserved for the largest most stable businesses.
But don't be discouraged, with a little time, your business
FICO score will skyrocket!
Next, in order to enter the business credit market, you'll
need to do a business credit assessment to determine if you
comply with the lender and credit bureau's requirements. A
great place to start is to look for businesses that issue
credit without the need for established business or personal
credit checks or guarantees. Once you have transacted
business with these vendors on credit, you'll be able to use
those credit references to build your credit profile with
the credit reporting agencies.
In many states, you can find non-profit organizations and/or
government organizations that will help you with setting up
business credit. There are often loans available for
start-up businesses and sometimes even government grants.
Check your state government web sites for such
organizations. Many retired owners and businessmen will
volunteer to help start-up businesses. By researching your
options prior to a business start-up; you will not be
struggling later with questions. With any luck building your
business credit will be a smooth transaction with a huge net
profit for you in the end!
About the author:
If you would like to get more credit information you can
visit our website which contains many credit resources.
http://www.my-credit-report.info This article is copyright
2005, but can be freely reprinted, as long as no changes are
made, including hyperlinks.
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