by Catherine Gail Turner
Most of us have been inundated with advertisements about how to build one’s personal credit and raise our FICO credit scores. And while this is a critical step in getting the best rates on financed purchases, loans, and credit cards, we hear very little about establishing our business credit separate and apart from our personal credit. Yet, as a business owner, learning about establishing and building business credit is a must know!
Many micro-businesses have already made the decision of how they’ve registered their business entity (Sole Proprietor, Limited Liability Company – single member, partnership, S-Corp, or even as a C-Corp), however, the new separate entity they’ve established now needs to be creditworthy for itself and by itself. If you want other businesses to do business with your business, then you’ve got to show them the business score as your way of winning their trust in your ability to show them the money!
As I did a little research, I found that while there were many credit bureaus on the scene, there are actually three leading business credit bureaus that you may want to focus on: Dun & Bradstreet, Experian, and Equifax. Also, be aware that some government agencies actually require that you have a registered D-U-N-S Number BEFORE they will even consider your business for potential contracts. So, business owners, I encourage you to be proactive in this matter. Your “Getting Started” business checklist should have the need to establish business credit as one of the Top 10. Most importantly, whatever you do, by all means, don’t commingle your personal expenses with your business expenses! While business owners KNOW this rule, believe me, business owners don’t ABIDE BY this rule, and it can come back to haunt you in many ways, both legally and in your attempt to expand and grow.
In a nutshell, I encourage you to go to each of the major three business credit bureau websites and do the comparisons of how they can help your business for yourself. In the long run, it will be well worth your time and hopefully, bring in many dimes! Most of all, it will showcase to potential lenders and companies that you are not just in business, but that you are serious about your business, and you’ve got the established business credit to prove it!
Catherine Gail Turner is the owner of Goodbooks LLC
“Helping individuals and small businesses identify, implement, and IGNITE their WEALTH
Featured in The April 2020 edition