How to Build Business Credit Fast

The importance of having a good business credit score has never been greater. Without one, you’ll have a hard time qualifying for small business loans. And if your business is approved for credit, you’ll likely be subject to high-interest rates.

Developing a good business credit score might sound challenging, especially if your business has little to no credit history. But worry not. There are steps you can take to build business credit fast. Here’s a step-by-step guide to help any small business owner get started with establishing a strong, positive and healthy business credit.

Incorporate Your Business

First things first, separate your business credit from your personal credit. One of the best ways to do this is to incorporate your business. When you change to a corporation, your business will be viewed as a separate entity with its own credit score and report. This means any drops in your personal credit rating won’t generally affect the creditworthiness of your business.

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Obtain an EIN (Federal Tax Identification Number)

Next, get an EIN. Having an EIN will portray you as a serious and legitimate business — something lenders/creditors want to see. You’ll need an EIN to open your business checking account. Once your business checking account is open, be sure to use it to pay all your business financial transactions. It’s great for your business credit score.

Open a Business Credit Card

You can accelerate the rise of your business credit rating even further by opening at least one business credit card. Be sure to open your credit cards using your EIN. This will ensure all your credit card payments are reported to your business credit report. Also, choose a credit card provider who reports payments to the business credit agencies.

Cultivate Positive Relationships With Your Vendors/Suppliers

Your vendors/suppliers are the lifeblood of your business. Therefore, make sure you establish and maintain a solid and healthy relationship with them. The stronger the relationship, the more the vendors will be more likely to offer you favorable payment terms, translating to a more consistent purchasing history.

The vendors will also be more than willing to report your purchasing history to the credit reporting bureaus. Having your payments reported can boost your business’s perceived creditworthiness.

Monitor Your Business Credit

Another way to build and maintain a healthy credit rating is to monitor your business credit for inaccuracies regularly. If you notice any mistake that may negatively affect your business’s creditworthiness, have it rectified immediately.

Pay Your Debt and Bills on Time

Missing deadlines for paying your business debt and bills could result in penalties or additional fees, which could seriously damage your business’s creditworthiness. As such, be sure to pay your bills on time.

Remember, building a good credit score is a combination of discipline, picking the right strategies, and patience. Try out some of the above tips and see how much your business credit will grow.

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