Ways to Increase your Business CreditNov 27, 2023
A business credit score is a number that indicates how creditworthy your company is. Your score, which is based largely on your company’s history of debts and payments, shows lenders how reliable you are with borrowing money and making timely payments. Here are six ways that you can increase your business credit.
- Register your business and get an EIN. To establish a business credit file, register your business with your state Secretary of State. Once registered, request an Employer Identification Number (EIN) from the IRS. An EIN is a lot like a Social Security number—it’s a number that the government, business credit reporting agencies and others use to identify your company. To get your free number, visit the IRS website to determine if you’re eligible and to submit an application.
- Get a D-U-N-S number. Once you receive your EIN, you can contact Dun & Bradstreet to register your business and request a D-U-N-S number, a nine-digit identification number the company uses to distinguish businesses from one another.
- Open accounts with vendors that report payment history. The next step in building credit is opening accounts with creditors and suppliers that will report your company’s payment history to the business credit bureaus.
- Get a business credit card. If you have a good personal credit score, it may be easy to qualify for a business credit card. Bonus: Find a card that also offers the benefit of earning travel rewards or cash back on your company’s expenses.
- Pay creditors on time or early. This is critical if you hope to build good business credit. It will be impossible to build a good score if your report is full of late payments.
- Keep your profile free of errors. Check your business score periodically to make sure all information is accurate—especially before you apply for a business loan. Although each bureau says it carefully vets its information, you may still find mistakes in your company’s report, which can damage your credit score. Errors can be corrected by contacting the bureaus and proving evidence that the information is inaccurate.
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