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How to Build Business Credit Rating and Use It to Your Advantage
When a business is first developed it is often difficult or impossible to determine the credit of the business. After time a business owner will be able to develop credit for their business. To develop a positive business credit rating, business owners are encouraged to use the following tips:
If a business owner is seeking financing to open their business for the first time they will have their personal credit examined. New business owners looking to obtain financial assistance are encouraged to first clean up their personal credit. A poor credit rating can prevent you from being able to open your business.
When establishing a business many business owners do not take the necessary steps to separate their personal credit from their business credit. To establish business credit separate from personal credit, a business entity should be set up such as a limited liability company (LLC) or a corporation.
The best way to establish a healthy credit rating for your business is to know what credit bureaus and financial lenders take into consideration when examining business credit. Keeping this information in mind will help you develop a good business credit rating.
Business credit is most easily built up by making purchases, but you must make sure that the items and your bills are paid for on time. Making late payments on your business purchases is likely to will have a negative impact on your business credit rating. If you have a business loan, you will need to be sure to make your loan payments on time.
The three main credit bureaus in the United States are Experian, Trans Union, and Equifax. Business owners should periodically verify their business credit rating to make sure everything is in check.
A healthy business credit rating has a number of benefits - the key benefit is that it will help get financing for a business. Developing business credit will not only be beneficial to a business now, but in the future as well.
Click here if you are looking for business financing, commercial real estate financing, or if you need a business loan for equipment or working capital.
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