Why Build Business Credit After Years of Conducting Business?

Many things can lead you to a point where you have bad or no business credit after being successfully in business for several years. Everything from not incorporating or forming an LLC, to simply not having a D&B number. Many business owners may go for long periods of time without realizing that a personally guaranteed line of credit is building their own credit, but having no effect on the business credit. Whatever the reason, it's never to late to begin working on business credit.

Some steps you can take to getting on your way are to form a corporation or LLC if you have not. This creates a separate, legal entity with which you may apply for financing, credit and other services. Next, obtain all licenses and permits to operate your business. Once your corporation is formed, make sure you have your TaxID or EIN. They're essentially the same thing, so having one but not the other is typical. Obtain a DUNS number from Dun & Bradstreet so that companies can actually report your activities and you can get a credit report. Open separate accounts with financial institutions, such as banks and lenders.

Once you have created a wholly separate entity for your business, building credit is as easy as paying bills on time and ensuring that all lines of credit and loans are taken out in the name of the business, without a personal guarantee. Be sure to regularly check your D&B report to make sure companies are reporting your activities, and be assertive in getting those who do not to report. Good business credit can go a long way, and may be the next step your need to take to expand your business.