“Credit history” refers to your company’s credit report, a record of borrowed money, repayment of that money, late payments, and bankruptcy. Individuals often understand how valuable it is to establish a solid credit history on their credit report, but small business owners often neglect to establish a business credit history.
Not establishing a business credit history means that your business' credit history will tie to your personal credit, and you will be personally liable for business risks
Not only is linking your business' credit history to your personal credit potentially dangerous for your business, it is also dangerous for your personal credit. For example, if your business fails and your business credit and personal credit are linked, your personal credit is ruined right along with your business. On the other hand, by establishing an independent business credit history not linked to your personal credit, business failure will not have the same catastrophic ripple effect into your personal credit history.
Understanding a Positive Business Credit History.
To establish a strong business credit history, you need positive credit ratings with Equifax, Experian, and D&B (Dun & Bradstreet). Equifax is valuable because it provides credit information to most traditional banks that supply business loans. Experian provides credit information to many companies that offer business credit cards. Dun & Bradstreet provides credit information to other agencies that may extend a line of credit to a business.
Besides establishing a positive business credit history with the three national agencies listed above. Your business needs to be “in compliance” with twenty other items in order to qualify for a business loan. What are these twenty items? Some are as easy as making sure that your business information is properly listed in the 411 directory assistance. If you are missing just one of these twenty items, your business may be considered “out of compliance”, and be denied for a business loan. Many small business owners are not even aware that they are out of compliance, leaving the business wondering why a business with an otherwise sound business credit history would nevertheless be denied a business loan.
The people at BusinessFinanceCoach.com have been helping businesses establish a positive business credit history for almost fifteen years
Get started building a strong business credit history today. With the help of BusinessFinanceCoach.com, thousands of businesses have gone on to have excellent business credit ratings with the three national credit rating agencies, and have learned what twenty items they must be in compliance with in order to qualify for a business loan. To find out more, visit BusinessFinanceCoach.com.
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