The Fastest Way To Build Business Credit
One of the questions I get asked the most is "How long will it take?" I get it. When you need business credit, you need it now. Not 60 days or 90 days or 6 months from now. What few people realize is that they may already have everything they need to build or boost their business credit.
If you own a legitimate business, you've already been spending money to build, operate and grow your business. All you need now is a way to "get credit" based off of what you've been doing right all along.
Let's start with the basics...
And a checklist to make sure you are covering all your bases!
1) Make sure your business is (and looks) legitimate.
• Business is registered with your city, county and/or state.
• Registration is up-to-date, accurate and in good standing.
• Get your domain name (www) for your business.
• Use a business-based (domain-driven) email address.
• Have a website that shows what you do (even if it is very basic.)
• Get your Employer Identification Number (EIN)
2) Check for an existing business credit profile.
• Some states report new businesses automatically.
• Check Dun & Bradstreet's Business Directory here
• Check Business Experian's Business Directory here
• If you aren't already listed, establish a new company profile.
• If you are already listed, get free access to your report(s)
• Check for duplicate reports on the same company.
3) Access and update your business credit profiles.
• Use D&B's free DUNS Manager to make updates.
• Submit all updates at once on the online portal.
• Only the company's principals can access.
• You will need to verify your identity.
• Log into your business bank account (or)
• Submit copies of your corporate documents
• Updates may take 3-30 days to complete.
• Use Experian's search portal to check the data.
• Submit all updates at once via email.
• Updates may take 3-4 months to complete.
4) Establish and use your business bank account.
• A business bank account is under the business name.
• The bank account address should be the business address.
• This address should match the business registration.
• Home-based businesses use the home address.
• Do not use a virtual address or mailbox service.
• Bring your business registration and ID to create account.
• Do not use the business bank account for personal payments.
• Creditors may review your account to make credit decisions.
• Such reviews are verifying business income and expenses.
• This bank account needs to represent only the business.
• Do not use your personal bank account for business payments.
• Doing so may deem these transactions as personal expenses.
• Personal expenses cannot be reported in business credit.
5) Pay all business purchases and expenses in the business name.
• Open new accounts using the business name and email address.
• Update existing accounts to reflect the business name and address.
• Invoices, statements and receipts should be in the business name.
• Payment should be made using the business debit or credit card.
• Never use a personal credit card to pay a business expense.
• Track all business-based purchases and expenses.
• These are the payments that will build your business credit fastest.
6) What you DON'T need to do to build business credit.
• If you are in business, you already have expenses and payment history.
• Don't buy "tradelines" from online resellers.
• Many of these companies are no longer eligible to report.
• Many generate inquiries that can harm your scores/ratings.
• These companies' sole purpose is selling "Net 30 Credit".
• They may cause your business to be flagged for potential fraud.
• These types of flagged creditors will raise your risk scores.
• Using multiple flagged creditors will generate an investigation.
• Payments to these creditors will be blocked and/or removed.
• Don't use shelf corps or aged businesses to build credit.
• D&B has archives of the entire history for every registered entity.
• The day you update the entity will become its new start date.
• The company will lose all of its previous age and history.
• Don't waste money on products and services you don't need.
• Don't attempt to piggyback your business credit off others.
• Don't misrepresent your company's details or history.
The Fastest Way to Boost Business Credit Scores
• Update your company details to reflect accurate information.
• Add your existing payment history from the past 365 days.
• Make a list of every purchase/payment made within the past year.
• Company name
• Address
• An account or invoice number
• Contact person's name or department
• Contact person's email address
• Use D&B's Creditbuilder to submit those creditors for verification.
• U.S. based businesses only.
• No banks, credit cards or other financial enterprises.
• No creditors who already report (or won't report) to the bureaus.
• Only submit vendors who are always paid on time.
• Prepaid and ACH payments may get added as Cash transactions.
• Prepaid and ACH payments may negatively impact credit scores.
• Use Experian's Business Advantage to submit those same creditors.
• U.S. based businesses only.
• Submit any bank or credit card not already listed in the report.
• Only submit vendors who are always paid on time.
• Track score changes and new data on a daily basis.
• Watch to make sure updates get completed as requested.
• Note new payment history as it gets added to your report.
• Print/save a copy of your report anytime you see changes.
• Scores and ratings will update as new data is verified.
• Updated data will be visible to the public every Monday.
• Data will refresh in the "global" database every 28 days.
Common Misconceptions (and Misrepresentations)
Building business credit is hard.
It's not. You just need to better understand the process.
You have to use a business location.
Almost half of my clients are home-based businesses.
I can use a virtual address so it looks like a business location.
Virtual addresses can actually have the opposite effect.
Virtual or mailbox locations lead to duplicate business credit profiles.
Business credit bureaus already know about these locations.
Most creditors have been defrauded by someone at that address.
Creditors want to know where you are actually working from.
You can get EIN-only based credit.
Building business credit solely from an EIN no longer exists.
Business credit cards and loans require a social security number.
This helps verify a principal's identity and credibility.
All business credit now requires a Personal Guaranty.
A personal credit check does not signify a PG.
A personal credit check is required for identity verification.
It's part of the government's fight against the funding of terrorism.
Business credit won't get reported to personal credit bureaus.
If a PG is required, it can get reported to personal credit bureaus.
If you always pay on time, this can help boost personal credit.
Setting up automatic payments ensures bills are paid on time.
ACH (automatic) payments eliminate the risk that you'll pay late.
They also cast doubt on your responsibility to manage business credit.
That's why ACH payments are viewed as Cash or COD accounts.
Cash/COD/prepaid payments are factored into credit differently.
They may signify a business that can't be trusted with credit.
They can negatively impact credit ratios and stress scores.
It can take 3, 6 or 12 months to get strong business credit.
I have clients who have built/boosted their scores in 2 weeks or less.
Most clients experience a score boost by simply updating their data.
If you already have history, that history just needs to get verified.
Verifiable history is what builds strong business credit the fastest.
Building business credit is expensive.
Nope. You just need to get credit for what you've already spent.
I can help you do that, and my price is the lowest in the industry.
Check out our PRICING page to see for yourself!
Feel free to give me a call at 800-918-7505 if you would like me to review your business credit report and provide insight on ways you can build better business credit or boost your existing scores. You'd be amazed at what a difference it can make!
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