EIN
The next thing you need to do is get an EIN for your business. This is an identifying number for your business that works in a way similar to how your SSN works for you personally. You can get one for free from the IRS. You may still have to provide your SSN for identification purposes, but your EIN will designate your business as separate.
Incorporate
Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability. It lends credence to your business as one that is legitimate. It also
offers some protection from liability.
Business Bank Account
You have to open a separate, dedicated business bank account. There are a few reasons for this. First, it will help you keep track of business finances. It will also help you keep them separate from personal finances for tax purposes, and some creditors require a separate account. Also, it is a requirement for a merchant account, which allows you to accept payments via credit card.
Hack #2: Add Accounts That Report
Here is another key way that your business credit profile is different from your personal credit profile. Pretty much all personal accounts report your payments, or lack thereof, to the credit reporting agencies (CRAs). In contrast, only about 7% of business creditors will report payment history to your business credit report. This makes finding accounts that will report to the business CRAs essential.
It’s easier said than done however. Creditors do not make this information easy to find. We have a hack that can help you find vendors that will report, so don’t stop reading.
Hack #3: Pay bills on time!
Okay, so if you made it this far and realize you may not have a business credit score at all, now you know how to fix it. However, if you do already have an established business credit profile, but need a credit score increase, this is the key.
It sounds like a no-brainer, and most asking the question of how to get a credit score increase are looking for a different answer. However, this is the absolute best way to raise your credit score.
In fact, it is much more important with business credit scores than with personal credit scores. That’s because there are a few different things that are used to calculate personal credit. Payment history is one of them, and the most important, but it is not the only one. Also, a payment isn’t really considered late for personal credit score purposes until it is over 30 days late.
When it comes to your business credit score however, payment history is virtually
all that matters. Not only that, but a payment is reported as late when it is as little as
one day late. So, late payments have a much larger impact on your business credit score. Do whatever you have to do to get those payments in on time.
Hack #4: Make Sure Your Personal Credit Score is on Track
Now here is a fun twist. Remember how I said your business credit accounts do not affect your personal credit score? The reverse is not exactly true. While personal accounts do not report to the business credit CRAs, your personal credit can be used in the calculation of your business credit score in some cases. So, one way you can potentially increase credit score for your business is to improve your credit score on your personal credit profile.
Hack #5: Work With a Business Credit Expert
Here is the number one hack if you are looking for a credit score increase. You absolutely need a business credit expert. It’s not hard to raise your personal
credit score. All accounts report, and paying on time and being otherwise responsible with your credit does the trick.
A business credit score is much more complicated. Establishing a profile isn’t so hard, but there is a lot more to fundability than that. In fact, there are over 100 factors that contribute to the fundability of a business. That means, you could pay your debt responsibly for years, and if you do not have accounts that report it will make no difference. Even worse, without some help, you may never know what is causing you to be denied funding.
A business credit expert can walk you through the process and help you navigate the complicated web of fundability. They can help you analyze it and figure out how to improve it if needed. Then, they know where to look and who to talk to to help you find accounts that report. In the end, a business credit expert is the best way to build credit score for your business.
Get a Credit Score Increase By Working With a Business Credit Expert
Technically you could give this a shot yourself now that you know what’s what. However, as you can see in the image above, it’s a lot. There is a secret sauce of sorts, and it pays to have a business credit expert help you. They know the secrets, and they can save you a lot of time. We all know time is money, and with all the tiny details, chances are if you try to do it alone something will be missed. An expert can walk alongside you and make sure you take the fastest, smoothest route possible to building a strong overall business credit profile.