Consumer credit is how many companies verify your payment history. If you have damaged personal credit, you already know how hard it is to open a line of credit based on it. This can also affect your business because companies often use your personal credit to start building your business credit. If you have damaged personal credit, you can build business credit without relying on it.
Pay your first business credit accounts on time or early for about six months before you try to open any other lines of credit. Next, try opening a few retail credit accounts, such as with Home Depot or Target.
Start your business credit with companies that offer trade credit. Trade credit is credit extended to you by suppliers for your particular industry. For example, many office supply companies will extend business credit to nearly any company that has a tax ID number. Staples and Office Depot will both offer starter credit lines for your business.
Check your business credit report each year through the free credit-reporting website endorsed by the U.S. government. Go online to annualcreditreport.com. This will help you keep an eye on your business credit and quickly notice any discrepancies.
Set up your business as legal entity separate from you. This often means setting up your business as a corporation and obtaining a federal tax ID number. Your business should also have a listing in the telephone directory, a business address and all the licenses required for your industry.
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