Establishing new business credit is essential for the success of your business venture. However, applying for commercial credit and building up the credit rating of your business is different from establishing personal credit.

Following the simple procedures outlined in this article will make the process of creating and building your new business credit easy.

In addition to personal credit, suppliers are increasingly checking the credit score of a business before they make a decision to extend payment terms or establish credit accounts.

This is why it’s important to make sure your new business credit history is being properly reported to the major credit reporting bureaus.

Another reason your new business credit is vital is to obtain government contracts. Government agencies require you to register your business to receive notifications of available bids.

Before you can register, you will need a D-U-N-S Number assignment from Dun and Bradstreet, which is free for all businesses required to register with the U.S. Federal government for contracts or grants.

Once you establish your new business credit, it’s important that you understand how your business will be rated and how to increase your score. Personal credit scores can range from 300 to 850. Business scores range from 0 to 100, with 100 being the best.

The best way to build your new business credit rating, is by establishing a new business credit account with a creditor that reports trade history to one or all three of the credit bureaus. Not all vendors or businesses you trade with will report credit information. Some only report negative information and will never give you a rating for being a good customer.

When trying to build up new business credit, you should know who reports trade activity and do the bulk of your business with the business that will report your positive history.

If you need to establish and build new business credit, there are three simple steps to follow.

1. Validate Your Business:

Decide how your going to register your business as either a sole proprietor, limited liability corporation, or standard corporation. Then apply for a taxpayer ID number (TIN), with the IRS. Also, make sure your business is properly recorded with your state and local government. If your state has a sales tax, apply for a certificate to collect the tax.

2. Look Like A Real Business:

One thing a creditor will look at, is how separate your business is from your personal credit. Does your business look like a real business, or does it look like a personal hobby? To give your venture the look and feel of a real business, set up a separate address, dedicated phone line, a business bank account and use email with your business domain name.

3. Build Your Credit:

Once you do steps 1 and 2, your now ready to request credit in your business name. When you select a vendor don’t always use low prices as your only criteria for the best supplier. As previously stated, select the vendor that will report your positive payment history.

You may even want to spread your business purchases among multiple suppliers. The more trade lines you have reported on you business report, the better your business will look to creditors.

You want new business credit for your business, then get real and put a little work into it!

Author Bio: For More On Building New Business Credit, Shawn Casey Explains The ‘Ins’ And ‘Outs’ On His Blog At http://www.businesscreditnow.org

Category: Business
Keywords: business credit,new business credit,finding business credit