Posts Tagged ‘having good business credit’
Having a business credit account is much like having a private credit account. The big change is that it’s only for your company’s use. You are smart to keep them both separate from one another. That way there won’t be any problems that will make both your private and business credit histories be bad if something goes wrong.
If you keep a handle on your business credit, you will always be able to get premium loans with low interest rates and you won’t have to give personal promises. And if you rate high levels of credit spending, you will have plenty of cash to pay your vendors fast, extend payments, and always look good so people will jump to be your customer.
Now that you understand the principle of having good business credit, you will want to know how to get it.
First, be sure not to put your own credit on the line when applying for business accounts. To do this, apply for loans and credit lines in the name of your company, not your own name. It has to be in your business name so it gets the credit for the business you conduct. This also helps keep your personal credit safe in case your business goes under.
Second, make sure your status puts you as an incorporated, single entity company, and not a sole-proprietorship or a partnership. That way each is their own separate unit, even though you have full control over your company.
Third, enroll in a business credit builder plan. These plans are there to give businesses lines of credit with vendors who participate. If you don’t belong to one, you don’ get as good a deal if you open up a line of credit. When they open up an account with a vendor, the account may not have very favorable terms compared to one from a vendor in a participating plan. And vendors that don’t participate don’t report your good credit, they just take your money and are happy for you to pay on time. But they sure report you if you don’t pay on time. Then you get a bad mark on your credit report.
But if you join a business credit builder program they help you pick the vendors that give better terms. These vendors always report your good history to the credit bureaus. If you pay on time, you build up a good credit history. And sometimes they even do things like watch over your account, help you apply for loans and help you understand any needed forms. It’s a great way and a fair way to build up business credit!