- If you're starting a business,
you might have heard of business credit, and it may sound
like building business credit is complicated.
It's not. We're gonna show you
how to build business credit fast.
(gentle music)
Before we jump into how to build business credit fast,
let me give you some context
about what business credit is and why it's important.
Just like you have a personal credit report
and personal credit scores,
your business can have its own business credit report
and business credit scores.
Companies like Equifax, Experian,
and Dun & Bradstreet collect information
about how businesses pay their bills,
and then they package that up
and sell those in business credit reports.
Building business credit can help
your small business get financing,
and get better financing as your business grows.
But it's not just about financing,
it can also unlock big opportunities for your business.
The first step in building business credit
is to create a professional persona for your business.
A lot of business owners will start a business
without taking some basic steps
to make their business look legit.
You want your business to look good and to look professional
because that unlocks lots of opportunities for you.
There are a few things you wanna make sure you do.
One is to make sure that you register with your state.
If you're operating as a sole proprietor,
file your business name with your state,
get business licenses if they're required.
Another thing you wanna do
is have a professional home for your business,
even if you don't have an office.
So, that could be a professional-looking website,
and it will include an email address
that directs to that website.
Don't use a freebie email address
that doesn't represent your business well.
Think about your customers, are they going to see that
as a professional business or just a hobby?
It's also helpful to have a business phone number,
and these days you don't have to sign up
with your local telecom.
You can actually sign up for an inexpensive service
to get a phone number that rings to your business
on the cell phone you use every day.
Establish these steps at the beginning
so that your business is legit and looks legit,
and that will make it a lot easier
when it goes to building business credit.
The second step to building business credit
is to get vendor accounts.
Vendors are companies that sell things to other businesses.
Working with vendors that report your account
to business credit will give you a credit reference
on your business credit report.
The big mistake that business owners make
with vendor credit is they work with vendors
that don't report to business credit bureaus.
Just having a couple of vendor accounts
reporting on your business credit report,
paid on time, can go a long way
toward building business credit fast.
You don't need to be an expert in business credit,
you just wanna be fast and efficient
and build references that report.
Another step toward building business credit fast
is to get a business credit card
that will appear on your business credit reports.
If you're a new business, you can get a business credit card
as soon as you start your business.
Business credit card issuers typically make a decision
based on income from all sources, not just the business,
and the personal credit score of the owner.
So that's good news,
it means you don't have to have a business
that's making a lot of money
or has been in business for two years
to get this type of financing.
Don't be too worried about picking
the absolute perfect business credit card.
You only need two, three, maybe four accounts
appearing on your business credit report
to build good business credit scores.
So don't worry about getting lots of accounts,
or worry about lots of different types of accounts.
As long as you have a few reporting and you pay on time,
or better yet, pay early,
you can build a good business credit score.
Now that you've learned how to build business credit,
take those steps, and if you have questions in the process,
drop them below and we'll do our best to help you
get on the journey to building your business credit
and your business successfully.
(gentle music)