Credit 101

Reader Question: How do you establish business credit?

Comments 6 Comments

We receive so many fascinating reader questions each month, usually in response to our Tidbits Newsletter. Last week, Joe asked about opening up credit and loan accounts for his business:

I am interested in learning more about how to qualify for a business loan, credit
card, line of credit, etc. I am currently working on improving my personal
credit report.  I know that my credit score will that play a big part in
me being able to obtain a business loan. What else factors in?

Qualifying for a business credit card is much the same process as qualifying for an individual credit card. The borrower’s credit score will play a large role in the application review along with some basic information about the company. The applicant will need to provide details about the type of industry they are in, how many years they have been in operation and how much revenue the business earns a year along with their Federal Tax ID.  A good or excellent credit score is needed for most business credit accounts.

Commercial mortgages
may also be a good option for small business owners. These loans are specifically designed to help business owners and investors buy real estate such as multi-family, office, warehouse, self-storage, bed and breakfast, restaurant and automotive properties. With these mortgages the applicant will also need to provide information about your business income and industry.
 
Have a question? Want to share a small business credit tip with Joe? Share your questions and feedback in the comments section below.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Melissa Lee

    If you are interested in establishing business credit without using personal information or personal credit?
    Please go to http://www.b2bcredit.com or contact them at 1-877-464-3700 x103

  • Chris Howard

    Thanks for the Great Information.

  • http://www.initialunderwriting.org Ilya Bodner

    A lot of times business owners underestimate the true weight of strong business credit. Strong implies undeniably sturdy. Well-built, demonstrating strength, are both synonyms for strong business credit. Do not forget that lenders look for only the top performing companies to lend to – why would they take the unnecessary risk? If your companies business credit in not top notch then it is probably lacking strong business credit. With that said, do not think that your business must be the biggest on the block. On the contrary, small and well articulated businesses sometimes have a better chance at financing compared to the Goliath down the street.
    Strong Business Credit is measured through the business credit score reported at D&B (through the use of a Paydex Score) and, more importantly, it is measured by the business credit profile of the business.
    Sincerely,
    Ilya Bodner
    Initial Underwriting Group

  • Ndugu Hunsu

    I finally found a book on business credit that’s worth it! The book is “Principles of Building Business Credit,” and it is the most comprehensive book on building business credit available today.

  • http://www.initialunderwriting.org Ilya Bodner

    b2bcredit mentioned above is a lot like strongbusinesscredit.com Be careful about picking a company that can help build strong business credit

  • http://safeorsorry.net Robyn P

    I recently signed up with AFT Credit building. I strongly recommend NOT doing business with them. First it started with the owner ( MIKE) being very rude, when I started asking questions about what he promised. Then I canceled with in a 14 days and hey tried stealing 40% of the money that I paid, saying thats the cost for them to set up a account. What account? I haven’t seen anything. Not one phone call or any work done from this company has be done in my behalf!
    All they gave me was some resource on how to apply for credit. Who doesn’t know that? They don’t actually do anything, other then refer you to a reference page for a step by step cheat sheet. We all can get this information in any of the books discussed here. Doing it our self is the way to go…

Find out where you stand.
Get your FREE personalized credit report card.

Sign Up Now
X

Stay connected to our experts

Please submit your email address to get credit & money tips & advice
from our team of 30+ experts, delivered weekly to your inbox.