4 Steps to strengthen your company's corporate credit file
It's a fact... Small business owners have to work harder to make their business a success. Unlike the Fortune500, you don't have the budget for contracting the best marketing company, or buying the best advertising spots, or hiring a ton of employees. You can't put that responsibility in someone else's hands. In many cases, you are the chief cook, bookkeeper, and bottle-washer, all rolled up into one. And, more often than not, you already don't have enough hours in the day. Budgeting time to learn about, monitor, maintain, and build your business credit usually isn't one of your top priorities.
Many small business owners fail to realize that building business credit is really not all that hard, it just takes a little time and energy and perseverance to get to the finish line. You may already have everything you need to succeed right at your fingertips.
1. Do you have an active and functioning business?
2. Do you have income and expenses?
3. Do you have a business credit report?
4. Have you paid for anything in the business name in the past?
If you answered "yes" to any of the above questions, you are already on the right path. So here are four steps you can take to help get you to the finish line without jumping through hoops...
1. COMPLETE YOUR BUSINESS CREDIT PROFILE
90% of vendors, suppliers, creditors, and lenders will search for your business credit file when making a determination about whether to open an account or lend money to your company. Much like your personal credit report speaks to your personal credit history, a business credit report tells creditors everything they need to know about your business. If any of the information shown below is missing, your file is not complete.
Your D&B© credit profile includes:
Percentage of ownership
Description of business
Estimated annual sales
2. BANK ON YOUR BUSINESS
When separating your business assets and liabilities, you need to go further than corporate registration. You need to start at your bank. Be sure your company name and address are up to date on your business bank account. This helps to insure payments made to your suppliers using the business checking or debit card get applied to your business credit report.
While you may be unable to add and bank or credit card to your file, you need to make sure any payments made using those accounts benefit your company as they filter through the various financial systems. One of the biggest reasons why vendor payments do not reflect in the credit report is because the billing address on the credit card does not match the business address on file with D&B©.
3. BUILD UP YOUR VENDOR BASE
If you already have vendors or suppliers who have billed you for products or services at least one time in the past 12 months, they should be reflecting in your business credit file. D&B© allows trade references to be added to the file in one of two ways: auto-reporting or manual upload.
Auto-reporting vendors will report using the name and address as it appears on your account.
- D&B will match incoming info to a company name and address on the business credit profile.
- If the company name and address are not an exact match, the data may not flow into your profile.
- Verify your company data is correct in: the D&B© report, the payment method, and the vendor's file.
Manual-upload vendors have to be submitted to D&B© by using a Creditbuilder service.
- If your vendor meets D&B's criteria, an agent will contact the vendor and ask basic questions about your account and payment history.
- Only vendors who you have purchased from at least once in the past 12 months should be submitted.
4. CHECK YOUR SUPPLIERS AGAINST D&B'S DATABASE
When choosing which suppliers your company is going to order from, take a minute to compare the information you have about them against what D&B© has in their files. Even the smallest of Mom-and-Pop shops can qualify to report your prompt payments, but only if their own credit report is accurate. If you are going to spend the money, shouldn't you spend it with a company that will benefit your credit file?
We recommend you follow the below steps to see which of your vendors will likely clear D&B©'s strict criteria.
In the search box in the middle of the picture, search for the name and state of your supplier
If their company shows in the list that is generated, they have a D&B© report of their own.
If the name, address, and phone is showing and is accurate, they have cleared the biggest hurdle.
Ask your supplier if they would be willing to take a call from D&B© to confirm your payment history.
The steps outlined above are just a few of many processes we follow when working on our client's files. As you can see, the biggest issue of all is in the accuracy of the data, both what is in D&B's files and what your vendors have on record. The more solid the information and the more closely it matches, the more likely you are to have a strong, healthy, and creditworthy file that will grow as your business grows.
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Submit your trade references to D&B
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Establish new trade lines for your business
Advise you against potentially risky behavior
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Register your business with SAM.gov
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Keep you on a consistent track to success