Recent Business Credit Questions: Can Business Credit Ease Inflation?

Your most recent business credit questions have been weighing on our minds. So, let’s talk about that — and inflation. There’s more of a connection than you may think. What better place to start than at the beginning?

Basic Business Credit Questions

Here are answers to some core business credit questions that the others build on.

What is Business Credit?

Business credit is credit in the name of the business. Every business owner should work to establish business credit and build a credit history.

There are a few reasons for this. First, it protects your consumer credit. Trying to make business purchases on personal credit can have a negative impact. The truth is, that’s the case even if you make your payments regularly and on time.

What Can Business Credit Do for Small Business Owners?

Creating a business credit profile means both your business and you can have a separate score. As a result, your ability to purchase a home or car will not be affected by your business expenses. Furthermore, your ability to get funding for your business will be less affected by your personal financial situation.

Your consumer credit report will have information on payments made, or missed, to your company’s creditors. The more positive history you have, the higher your score will be with whichever credit bureau the lender decides to use.

Why Should Business Owners Want to Have Business Credit Separate From Their Personal Credit?

With a separate profile, small businesses can get approval based on the financial health and well-being of the small business. Whether it is a business credit card, a line-of-credit, or a loan, approval will not be impacted as much by your personal finances. With business credit, it’s a truly separate credit score versus personal credit.

This not only makes it easier to get funding for your business, but it can open doors for you to get even more funding. For example, with a strong business credit profile, you are open to a higher limit and lower rates on a business credit card, lines-of-credit, and even vendor credit. Often, you can get these things despite bad consumer credit and without a personal guarantee.

Do Business Entities Matter When it Comes to Business Credit?

Absolutely—all business entities are not created equal. A sole proprietor can end up being personally liable for business debts. But in a business that is incorporated with its own tax ID, the owner’s personal assets are less likely to be on the line in case of default.

In addition, lenders want to see that a business is a separate entity from its owner. For that to happen, a business needs to have a Fundable Foundation. And that requires incorporating.

What Does a Small Business Owner Need to Do?

To have a Fundable Foundation a business must be set up a certain way. For example, you need to incorporate. A sole proprietorship or even a partnership doesn’t work so well for Fundability.

You also need to have a name for the business that is consistent in all places, and that doesn’t warn of a high risk industry. So, “Bob’s” is better than “Bob’s Gas Station.” And, if it is “Bob & Joe’s,” do not list it as “Bob and Joe’s” somewhere else. Yes, even something as tiny as an ampersand can cause a problem.

Then, get an EIN and a D-U-N-S number. The EIN is like a Social Security Number for your business. You can get one for free on the IRS website. The D-U-N-S number is an identifying number you need to get in the Dun & Bradstreet system. You can get this number for free as well from their website.

A separate business bank account in the name of the small business is also necessary. Keeping business funds and personal funds separate is a good idea anyway. It makes tax time easier for sure. However, some credit providers make it a requirement for approval as well.

It’s also important to have a professional business website. The URL should have the name of the business if possible, and get a business email address that has the same URL as the website.

What Do Business Credit Bureaus Look for When Calculating Scores on a Business Credit Report?

A credit report will show a company’s pay history, even for items as seemingly inconsequential as office supplies. The exact way a score is calculated depends on the specific credit bureau. They each use a different formula.

Dun & Bradstreet is the largest and most commonly used business credit bureau. That’s why getting a D-U-N-S number is so important. You cannot be in their system without one.

That said, Equifax, Experian, and FICO SBSS are also used often. Generally speaking, the main factor that comes into consideration for the score on each of these reports is payment history. However, Experian and FICO SBSS use your personal score in the calculation of your business score. It’s not just about business credit card payments.

Inflation Related Business Credit Questions: What is Inflation?

According to Investopedia, “Inflation is a decrease in the purchasing power of money, reflected in a general increase in the prices of goods and services in an economy.”

In essence, your money does not go as far as it used to. This is true for all businesses, whether it’s a new business, a sole proprietorship, a partnership, a type of corporation, or an LLC.

How Does Inflation Affect Many Small Business Owners?

In business life, companies may find their business customers are looking to spend less. As a result, annual revenue can go down. It makes sense that customers may not want to be personally responsible for as much debt.

Business Credit Questions Connecting Inflation to Business Credit: How Do Inflation and Business Credit Relate to Each Other?

Many lenders and credit card companies will check your credit when deciding how much credit to extend or how large a small business loan they should approve you for. It can affect the interest rate you pay, too. Without business credit, a lender will only be checking consumer credit, as that’s all you’ve got to offer. And if that credit score isn’t so good, you won’t get much. You’ll get a lower credit limit (if they extend credit to you at all), and any potential lender may charge higher interest rates.

How Does What’s on Your Business Credit Report Affect Approvals?

If your funds aren’t going as far as they used to, then you might want to lean on business loans. But you’re less likely to get a business loan if you haven’t built your company’s credit profile. And forget about qualifying for an SBA loan.

If owners cannot meet a lender’s credit requirements, then companies may have few choices. One option is an alternative lender. A small business owner may find they are paying a higher interest rate for a lower credit limit or business loan amount when it comes to alternative loan options however. Alternative lenders, though a helpful loan option to have, are notorious for higher rates.

During an inflationary period, that means such less favorable credit terms put even less money in an owner’s pocket.

Business Credit Questions for Hard Times: How Can Small Business Owners Help Their Businesses Better Weather Inflation?

Of course, the best thing small businesses can do is build business credit. Building a credit history with the business credit bureaus means setting up your business properly.

That includes building the Fundable Foundation mentioned earlier. Then, establishing business credit history with the credit bureaus. Build your business credit profile with an eye toward helping your small business get better credit terms and qualify for business loans. Doing so can help you manage funds and cash flow in a more efficient manner.

A Business Should Get Accounts With Vendors to Start

These are vendors for items which a business uses all the time, like office supplies. It’s a lot easier for a business to get credit accounts with one of these companies early on. Some may even offer a card, making it possible to get a first credit card in the name of the business. Even a secured business credit card will help, so long as it reports to at least one of the business credit bureaus.

Businesses Should Act Now to Pay Less Later

Inflation isn’t going away any time soon. Building credit for a business as soon as possible will help in the future. If inflation gets any worse, you’ll pay more anyway. Why not at least try to minimize that?

Business Soundness Doesn’t Necessarily Help Raise a Business Credit Score, But it Does Help a Business Get More Funding When They Need It

Companies that add working capital now can convert it into more annual revenue when they invest in better equipment or more inventory prudently. And even a new business can have its own business accounts. This is true even when small businesses are fighting inflation.

Business Credit Questions Relating to Personal Credit: Why Not Just Use a Personal Credit Card for Business Financing?

For one thing, credit approval amounts tend to be higher for a typical business card versus a standard personal credit card.

Your Personal Credit Score Would Plummet

On a personal report, the debt ratio affects your score. That is, the amount of credit you are using relative to the credit you have available to use. Since consumer credit limits are typically lower than business credit card limits, and business expenses are higher, your balance can stay close to your limit even when you may make regular, on-time payments.

In turn, your debt-to-credit ratio stays higher than what lenders like to see. Ideally, it will be less than 30%. Anything higher will have a negative impact on your personal report. This ratio does not affect a business credit profile the same way.

Other factors that affect your consumer report include credit mix and any inquiries on. But for both your business and personal credit score, payment history is a big part of the credit calculation.

Limits on a Business Credit Card Tend to Be Higher Than Those for a Personal Credit Card

To get more funding for a business, small business owners would do well to use a credit card for their businesses. They tend to be more flexible than small business loans, because of their revolving nature. In addition, many of them have 0% interest rates you can take advantage of, as well as rewards programs. Just be sure to choose rewards programs relevant to your business needs.

When You Build Business Credit, Your Pay History on a Business Loan Should Stay Off Your Consumer Credit Report

With a separate business credit profile, you won’t get an inquiry on your consumer credit. Inquiries impact your consumer score negatively, but this is not true of a commercial score. So, separating the two keeps your business finances from affecting your ability to get personal loans. In addition, in some cases it can help you get a loan for your business without a personal guarantee.

What About Using a Personal Guarantee? Won’t That Affect a Personal Credit Score?

If a business owner needs a small business loan immediately but can’t get it any other way, then offering a personal guarantee can be a smart choice. But don’t just offer a personal guarantee if you can help it. It can affect your personal credit report. Even a new business should be able to establish a credit profile and build a credit score without always giving up a personal guarantee.

What Else Can Business Credit Do for Small Businesses?

Even when inflation is on the rise, a separate credit profile increases the chance of loan approval for a business. That doesn’t mean the personal report will be ignored. However, if the business has a good credit score, loan requests are more likely to be approved. It can’t hurt the interest rate either.

Credit Suite Can Answer Your Business Credit Questions

Rising inflation means business owners need more funds. In contrast, getting a loan at times like this is even harder than normal. On the lender side, they have to be much more careful with loans to reduce risk. In general, their risk is higher because borrowers do not have as much disposable income.

Credit Suite can answer your business credit questions. We can help you meet the guidelines a lender sets to meet loan requirements. We walk you step by step through the foundation building process. Then, we help you find the perfect vendors for your business, so you can buy the things you need for your business while building your profile with the bureaus.

Not only that, but we keep our finger on the pulse of the industry. We can often anticipate business credit questions before they are even asked. Due to our lender relationships, we are able to follow the patterns a lender may follow, and keep up with which ones are lending more at any given time. In short, we help increase your chance for loan approval by helping you find the right lender and loan product that best meets your needs.

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Why Is Inflation Bad? Personal Credit Issues and Business Fundability

Why is inflation bad? The simple answer is high interest rates. They affect everything. Money doesn’t go as far, borrowing is more expensive, and everything is harder. Personal credit can be finicky, and inflation doesn’t help. It is subject to a lot of different factors. There is much more to it than just paying your bills on time. Inflation can wreak havoc on personal credit, and that can, in turn, cause serious issues with your ability to get business funding.

Why Is Inflation Bad? The Effect on Personal Credit

These are some of the factors that can affect business credit.

Age of accounts
Account Mix
Debt-to-Credit Ratio
Inquiries
Payment history
And more!

As you might have guessed, this means that even if you pay on time every time, you can still have a less than great personal credit score. Still, how does inflation affect these factors? More so, how can issues with personal credit affect business funding? Then, what can you possibly do about it?

Personal Credit Issues that Can Kill Business Fundability

First, you need to understand which personal credit factors can also affect Fundability. Here are 5 Factors that can affect your personal credit and your ability to get business funding.

Lack of Open Credit

This is the big one. It deals with the debt-to-credit ratio. That is, how much credit you are using versus how much you have available to use, in total.

For example, imagine you have 5 credit cards with a $1,000 limit each. That means you have $5,000 in total credit available to use. Now, if you put $900 on each one, your ratio would be $4,500/$5,000, or .9.

As a result, you are using 90% of your available credit. For an optimal credit score, it needs to be less than 30%. This will especially be an issue if you are using personal cards for business funding. Typically, personal cards have lower limits than business cards. Furthermore, business expenses are usually more than personal expenses. So, even if you make payments, your balance could hover near credit limits.

Why is inflation bad? Higher interest rates mean higher minimum payments with less going toward the principle. Consequently, it is harder to get balances down and keep them down to a more positive debt-to-credit ratio.

Open Charge Offs

If a bank sees open charge offs on your personal credit report, they are going to question your ability to make payments. This can cause them to deny or limit the amount of funding they approve.

Why is inflation bad? With the reduced ability to pay accounts off, more charge offs are likely.

Judgements and Tax Liens

The same is true for bankruptcy, judgements, and tax liens. These kinds of issues on personal credit can make credit providers call other things into question, such as your ability to run and manage a business.

Why is inflation bad? Higher interest rates make it hard to pay obligations, which can increase the likelihood of financial problems, including bankruptcy.

The Relationship Between Business Credit and Personal Credit

How exactly does personal credit have any bearing on business credit? The truth is, at least two of the business credit reporting agencies use your personal credit score when calculating your business credit score. As a matter of fact, both Experian and FICO SBSS do this.

However, when set up properly, the reverse should not be true. Credit in the name of your business should not affect your personal credit score.

What’s the Solution?

First, fix your personal credit issues. Pay down debt, and clear liens and judgments if you can. Bankruptcies only come off with time, but more positive marks will help. Start now, before inflation grows.

Build Business Credit

At the same time, start building business credit, if you haven’t already. Make sure your business has a Fundable Foundation, and start applying for and using vendor credit.

Having business credit will help you get funding to grow and run your business day to day without depending on personal credit.

Work with a Credit Partner or Guarantor

This is someone who has good personal credit that can help you get credit for your business using their good credit score. One way they can do this is by helping you get financing through the Credit Suite Credit Line Hybrid. The Credit Line Hybrid is unsecured business financing that you need good credit, or a guarantor with good credit, to get. Better yet, you can get up to $150,000.

Don’t Wait, Start Now Before Inflation Gets Any Worse

Building business credit at the same time you are working on personal credit can keep you going. Eventually, you will have both good personal and business credit. Truly, the sooner the better. Not only will you be better able to weather the inflation storm on the horizon, but you can also double your funding options.

Then you will be able to get even more money by using both your personal credit and your business credit.

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How to Build Credit for A Business: The Truth About Fast Business Credit

Business credit is a journey, not a destination. It’s not somewhere you get to, but rather a road you travel down, continually making progress. It’s time to change our mindset from business credit being a thing you get quickly, to being a thing you can start building quickly, and then continue building upon. This is the truth behind fast business credit

How to Build Credit for a Business: The Truth is Growth Takes Time

Growing your business credit portfolio doesn’t happen overnight. Your portfolio can grow over the life of your business. The key to speed is to get accounts that will build business credit while growing your portfolio at the same time.

The Keys to Building Business Credit

Start with a Fundable Foundation. Then, get initial accounts reporting. Knowing which accounts will approve you and report positive payment history is essential.

A Fundable Foundation Includes:

Separate, consistent contact information
EIN
Incorporate
Fundable foundation
Separate business bank account
D-U-N-S Number
Profession, user friendly business website and email address on same domain

Initial Accounts

With a Fundable foundation, you can start applying for initial accounts. These are limited, but as you grow, more tools become available. There are not a ton of vendors that offer credit without an established business credit score, and of the ones that do, even fewer report positive payment history.

Even if they do, they do not always make it easy to find that out, or what they require for approval. Applying for and using smaller accounts that report sets you up to qualify for accounts that are harder to get in the future.

The major roadblock when it comes to building business credit is finding accounts that you both qualify for and that will report positive payment history.

Trial and Error is Slow

If you just start applying for credit in the name of your business, without knowing if you qualify or if they will report, your progress will be slow.

How to Build Credit for a Business: The Business Credit Builder

This is the beauty of the Credit Suite Business Credit Builder. We find the vendors for you and tell you which ones to apply for and when. This saves you an abundance of time.

In fact, we gather all of the business credit building blocks together in one place and tell you when it is time to use each one. We offer lists of vetted vendors as you become eligible for them. This cuts out considerable time over the trial and error method.

When you know specifically which accounts will approve you and report your positive payment history, you stop wasting time on accounts that will do neither.

The Secret Benefit of the Business Credit Builder

Once you complete the steps, the initial building process is done. However, you aren’t finished growing your portfolio. That process continues. The Business Credit Builder has a large list of advanced vendors. These vendors extend credit to businesses based on business credit scores, but they may not report.

Still, they are important to your business credit portfolio. They allow you to get supplies you need to serve your clients and pay for them after you are paid for the job. As you grow, you can ask for higher limits. The best part is, you have access to this list for 5 years!

The Beauty of a Strong Business Credit Portfolio

Think of a business credit portfolio as a pool of various types of business credit. You can leverage it to run your business successfully. This “pool” will allow you to further business growth and success.

How to Build Credit for a Business: It’s Okay to Use Personal Guarantees

A well-rounded business credit portfolio can include both PG and non-PG financing. In general, personal guarantees should be avoided, but sometimes you just can’t avoid them. If a personal guarantee will help you qualify for funding or credit cards, and you wouldn’t qualify without it, it can be smart to offer one. This is especially true if they report payments to the business credit CRAs. Then they can help you build your business credit score.

How to Build Credit for a Business: The Truth

You can get business credit quickly, in the form of vendor credit, soon after you set up a Fundable Foundation. But, you won’t get anywhere on vendor credit alone. You need a variety of types of business credit accounts. The only way to get those is to continue building on the accounts you have and manage them responsibly.

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How to Use Business Credit to Fight Inflation as a Startup

How to Use Business Credit As a Startup: Where to Find It

The truth is, even as a startup you can benefit from business credit. Generally, the mindset is that you have to have credit to get credit. Unfortunately, this is more true with business credit than personal. However, it is possible to get credit for your business as a startup. With inflation on the rise, it’s more important now than ever. So, here’s how to use business credit to fight inflation as a startup.

First, starting this process as early as the startup phase has many benefits. In fact, the earlier you start the better. Still, it isn’t easy to find companies that will extend credit to a startup.

Business Credit Options for the First 30 Days

In the first 30 days most businesses can get accounts with:

Uline
Brex
Grainger

Uline

Uline sells shipping, packing and industrial supplies. To get a Net 30 account with them you need to meet the general requirements for a FundableFoundation. In addition, they may require that you make a few prepaid orders before they offer net terms.

Now, how do you use business credit with Uline to fight inflation as a startup? Use your Uline account to buy things you need for your business now, before prices rise anymore. Imagine, even if you buy things you will not use for later, you are probably saving money in the long run. Due to inflation, the price may very well go up before you actually need to buy them again.

Some examples of things you can buy include:

Office furniture
Office supplies
Warehouse equipment
Shipping supplies
PPE
Items needed for retail setup

Brex Net Daily

To start, open a Brex cash account. Everyone with a cash account gets a corporate card that works like a debit card. However, as you buy things on it, they report to Dun & Bradstreet like you are making payments on a credit account. Even though this doesn’t include extra funding, it can still be helpful. This is because it can help build your business credit score faster.

Grainger Industrial Supply

Grainger sells hardware, power tools, pumps and more. In addition, they offer fleet maintenance. The account reports to Dun & Bradstreet. To qualify, you need to meet the standard Fundable Foundation requirements, plus be registered with the Secretary of State for at least 60 days.

Furthermore, if you have no established credit, more documents may be necessary. These may include:

Accounts payable
Income statement
Balance sheet

How to Use Business Credit With Grainger to Survive Inflation

You can use your Grainger account to buy:

Constructions supplies
Cleaning supplies
Tools
And more!

Just like with Uline, you can buy now to lock in lower prices before inflation causes them to rise.

Business Credit Options for the First 60 to 90 Days of Operations

In the first 60 to 90 days many will qualify for accounts with:

United Rental
Tiger Direct
Amazon

United Rental

United Rental is the largest equipment rental company in the world. To qualify for a credit account with them, you need to have a FundableFoundation. There is no minimum time in business and they do not require a minimum purchase to report payments.

Use this account to rent tools and equipment, which can help you manage your cash flow better.

Tiger Direct

Tiger Direct is an online provider of electronic products. They offer pretty much anything you can think of when it comes to electronics, including:

Computers
Hard drives
Keyboards and more

Use your account to buy things you need, run your company more efficiently, manage cash flow, and build business credit.

Amazon

Everyone knows Amazon is an online retailer of virtually everything. However, they also report payments on business credit accounts to D&B and Equifax.

So, wondering how to use business credit with Amazon to help your company make it through inflation? Like the others, use it to buy things you need for your business while the prices are lower. Then, when you have the cash to pay later, you will not have to worry about the rising prices.

Keep Building Business Credit

That’s how to use business credit as a startup. Leverage the few credit accounts you can get as a startup, and grow your business credit score through the startup phase. Truly, credit for your company can be an excellent life raft to help you get through the sea of inflation. After that, you can continue to grow your business and thrive well past startup.

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How to Use Business Credit to Fight Inflation as a Startup

How to Use Business Credit As a Startup: Where to Find It

First, starting this process as early as the startup phase has many benefits. In fact, the earlier you start the better. Still, it isn’t easy to find companies that will extend credit to a startup.

Business Credit Options for the First 30 Days

In the first 30 days most businesses can get accounts with:

Uline
Brex
Grainger

Uline

Some examples of things you can buy include:

Office furniture
Office supplies
Warehouse equipment
Shipping supplies
PPE
Items needed for retail setup

Brex Net Daily

Grainger Industrial Supply

Furthermore, if you have no established credit, more documents may be necessary. These may include:

Accounts payable
Income statement
Balance sheet

How to Use Business Credit With Grainger to Survive Inflation

You can use your Grainger account to buy:

Constructions supplies
Cleaning supplies
Tools
And more!

Just like with Uline, you can buy now to lock in lower prices before inflation causes them to rise.

Business Credit Options for the First 60 to 90 Days of Operations

In the first 60 to 90 days many will qualify for accounts with:

United Rental
Tiger Direct
Amazon

United Rental

Use this account to rent tools and equipment, which can help you manage your cash flow better.

Tiger Direct

Tiger Direct is an online provider of electronic products. They offer pretty much anything you can think of when it comes to electronics, including:

Computers
Hard drives
Keyboards and more

Use your account to buy things you need, run your company more efficiently, manage cash flow, and build business credit.

Amazon

Everyone knows Amazon is an online retailer of virtually everything. However, they also report payments on business credit accounts to D&B and Equifax.

Keep Building Business Credit

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Business Financing with Bad Credit is Possible: 5 Business Loans You Can Get Even With Bad Credit

Bad credit business loans are kind of a mystery. You probably aren’t going to find them at a traditional bank. Rather, business financing with bad credit generally comes in the form of alternative types of financing and from alternative lending sources.

Is it Possible to Get Business Financing With Bad Credit?

If you have collateral, you may be able to get a loan, even with bad credit. Still, there has to be something to mitigate the risk to the lender. So, here are 5 options to consider.

#5 Business Financing with Bad Credit: Cash Flow Financing or Merchant Account Financing

To get cash flow financing, your cash flow must be positive and well managed. That means, you must spend it wisely and avoid taking on more debt than you can handle.

In essence, you are borrowing from part of future expected cash flows. Consequently, the payment schedule is based on projected cash flows and an analysis of historical cash flows. There may be a minimum credit score requirement. However, it will usually not be as limiting as with other types of funding.

Merchant Cash Advances

A merchant cash advance is like cash flow financing. Yet, the amount of funding and repayment is based on credit card sales. Therefore, the business needs steady credit card sales to qualify. Similarly, repayment is a percentage of daily credit card sales. Rates may be much higher than other types of funding, but credit score minimums are lower.

#4 Business Financing with Bad Credit: Equipment Financing

Equipment financing is a great option for purchasing hard assets for your business. The time in business should be at least one year, and there is no requirement to provide financial statements.

#3 Business Financing With Bad Credit: Other Collateral Financing

The amount available depends on the value of the asset being used as collateral. For this type of funding, open invoices and accounts receivable are considered assets that can be used to secure a loan.

Inventory Financing

The inventory itself serves as the collateral for the loan. There may be revenue requirements and a minimum FICO score. However, it will probably not be as limiting as with a traditional loan.

Invoice Factoring

This is an advance on open invoices, with lenders buying outstanding invoices for less than they are worth.

Honestly, the difference in what they are worth versus what the lender pays is the price you pay for getting the cash up front. It’s not technically interest, but similar. As a result, you do not get the full amount of the invoices, but you will get the cash faster. The lender will collect the full amount and keep it.

Account Receivable Financing

Accounts receivable financing is lending that uses unpaid invoices as collateral. Thankfully, there is no personal credit check. Instead, credit providers consider the payment history of your customer to determine the likelihood they will pay you.

#2 Business Financing with Bad Credit; Securities Based Financing

This is a type of collateral financing that can take many forms. The security is investments like stocks, bonds, and investment funds.

IRA Financing

In this scenario, the borrower invests part of retirement funds into the business. It allows more control over retirement plan assets as well as working capital for the business.

Stocks Financing

This type of financing uses securities as collateral, providing ready access to capital. The only restrictions are that you cannot use this for other securities-based transactions.

Bonds Financing

This type of funding is usually for a large business acquisition or real estate purchase. The value of the loan is based on the borrower’s investment portfolio. The best part is, if stocks or bonds have value over $25,000, you can get approval even with bad personal credit.

#1 Business Financing with Bad Credit: FinTech Lending

This is lending from alternative lenders. Generally, they operate online and offer less stringent lending requirements. As a result, they also have higher interest rates.

BlueVine

BlueVine offers invoice factoring and lines of credit. For invoice factoring, there are no reserves or minimums. There is a minimum personal credit score requirement of 530.

They also offer a revolving line of credit for up to $150,000. To get this, a business must have revenues of $10k or more per month, and the borrower must have a consumer credit score of 600+.

OnDeck

At OnDeck, you can get short-term loans and lines of credit. To do so, there must be annual revenue of at least $100,000. In addition, the time-in-business has to be at least 12 months, and you need a personal credit score of at least 600.

To get a line of credit the revenue and credit score requirements are the same, but the minimum time-in-business is 9 months.

Fundera

Fundera offers term loans to businesses with at least one year in business and $90k in annual revenue. The minimum credit score is 600.

They also offer business lines of credit if you have at least 6 months in business and $50k in annual revenue. Collateral may be necessary in some cases, and borrowers with lower credit scores will have higher interest rates.

To get invoice financing from Fundera, there must be at least 6 months in business and $50k in annual revenue.

Bonus: 401(k) Financing

This type of financing is not a loan. Rather, it is a 401(k) Rollover for Working Capital program. The IRS calls this type of program a Rollover for Business Startups (ROBS).

To qualify, the plan must have more than $35,000 in it, and it cannot be a plan you are currently contributing to or with a company where you are currently employed. Better yet, there are no credit score requirements.

Business Financing with Bad Credit Is Possible

It is possible to get business funding with bad credit, though it may not be the traditional type loan you are used to. These options can look different, but they all serve the purpose. If you have bad credit and need funding now, these are good options. However, to get the best rates and terms in the future, work on improving your personal credit score and building business credit. Want to know how to get started? Get a free Business Finance Assessment today!

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Surprise! Someone Decided to Check Your Business Credit

No one wants a surprise when they apply for a loan, whether it’s a personal loan or a business loan. Rather, the hope is that the process is smooth and ends with approval of funds. However, if you aren’t aware, a surprise is exactly what you might get when you apply for a loan and the lender decides to check your business credit.

Expect Lenders to Check Your Business Credit

Sadly, they don’t have to tell you they are going to do it either. So, the safest bet is to just assume they will. The Fair Credit Reporting Act protects you from this type of surprise when it comes to personal credit. Yet, it only applies to personal credit. In contrast, anyone can look at business credit reports.

In fact, it’s almost always part of the underwriting process for business loans. Frankly, it’s just one of the many ways lenders mitigate their risk and determine the creditworthiness of the business.

What Are Lenders Looking For When They Check Your Business Credit?

First, they need to see that your business is separate from you, the owner. Of course, they want to see that it can and will pay its obligations as well. Business credit reports are like a lender’s dirty little secret. They are made for bankers, not consumers. Actually, many business owners don’t even know they exist. Yet, credit providers want to know it all, and they will look everywhere they can think of to find all the information they can.

Impact on Funding

Unfortunately, some lenders will deny funding if you do not have business credit. To them, that makes it look like business isn’t legitimate. In contrast, a business credit profile helps build trust.

Also, even if a lack of business credit does not affect approval, it may affect how much you get. Furthermore, it can affect terms and rates.

What Can You Do?

At a minimum, you need to be sure your business has a Fundable Foundation. This includes:

Separate contact information
EIN
Business bank account
And more!

In addition, you’ll need to build business credit. To start, work with vendors that will report positive payment history after you build your FundableFoundation.

Credit Suite Business Credit Builder

The thing is, vendors that report are hard to find. Thankfully, as part of the Business Credit Builder, we offer an up to date list of vendors we know report. It is unfortunate, but not all of them do. Also, it can be hard to figure out who does. As a result, the list saves time.

Check Your Business Credit Report Yourself

If you want to avoid surprises, this is vital. I menan, you need to know what lenders will see on your reports. In fact, the Business Credit Builder program can help with this as well. As part of the program, you can get copies of the reports you need. Even better, an expert business credit specialist will go over them with you. They can help you understand where you are, guide you as to how to proceed.

Now, another option is stand alone monitoring. Of course, you can do this with each agency directly. But, with us you can monitor multiple business credit reports at a fraction of the cost.

Honestly, monitoring your business credit is the only way to know who’s reporting and when you can apply for more accounts.

Build a Business Credit Portfolio

A business credit portfolio is a cash flow pool of sorts. It includes all the different types of credit accounts you have. So, it is the total of all:

Vendor credit
Business credit cards
And business loans

In the end, a strong business credit portfolio allows you to even out cash flow, leverage business credit for growth, and keep going during tough times.

Don’t Neglect Personal Credit

Business credit doesn’t take personal credit out of the picture. Remember, lenders will look at everything. Personal credit can impact business credit.

Experian and FICO SBSS use personal credit in their business credit score calculation, and most traditional lenders will check both anyway. Still, if you have good business credit, they may not put as much weight on personal credit.

Be Prepared for Lenders to Check Your Business Credit

Lenders will likely check your business credit. Consequently, all you can do is be sure it is as strong as possible. Let us help. Find out more about building business credit now.

The post Surprise! Someone Decided to Check Your Business Credit appeared first on Credit Suite.

Steps to Building Business Credit in 2022

Welcome to Your Guide to Steps to Building Business Credit in 2022

Do you want to know how to build business credit with EIN to get the financing you need to run your business? Your business setup is key. And records consistency matters. The steps to building business credit in 2022 are in this particular order for a good reason.

You Probably Need to Learn the Steps to Building Business Credit in 2022 if…

You’ve ever tried to get credit for your business but were turned down. Or you’ve heard of building business credit with EIN, but you don’t quite know where or how to start. Or you’re tired of bootstrapping your business and want it to start funding itself. And you’re ready to take your business to the next level.

Steps to Building Business Credit in 2022, Fundability, and Your Business

Business credit is credit in the name of a business. It relates to the company’s ability to pay its bills, and not the owner’s personal credit history. It is also a great way to start to get your business to pull its own weight and fund itself.

Your business’s bill-paying behavior is crucial to getting business financing at good terms, and if you can get business funding at all.

Steps to Building Business Credit in 2022 and Fundability

Fundability is the ability of a business to get funding. A lot of this power is in your hands. You can make life easier for your business and yourself, or not. Fundability is all about paying attention to details.

Continue the Steps to Building Business Credit in 2022 by Building For Fundability

A business starts with no credit profile. As a result, what’s on an application is all that’s reviewed for approvals. So your application must be strong. For businesses where the owners have poor personal credit, what’s on the application is also key. These businesses don’t seem Fundable to lenders, so build Fundability from the start. Laying a strong and proper foundation helps your business make it.

Business Name

We start with your steps to building business credit in 2022 with your business name. This is because it leads to so many other details. Check with your Secretary of State—a business name may have to be unique. Make sure your SOS has all necessary information for your company, and that it’s up to date and correct. You want to be in good standing with them, and your entity must be active. You must file annual reports and pay a fee each year to stay active.

Keep the name of a high-risk or restricted industry out of your business name. Your business can be Juan’s rather than Juan’s Consulting. There is nothing underhanded about this—it is open and honest. It can help prevent a denial from a lender.

Records Uniformity

A common reason for loan and credit card denials is the lender can’t find a business offline or online. So make it simple for lenders and credit issuers to find your business.

This means the business name on your application must match what’s online and in your Secretary of State listing. Yes, you’re going for a perfect match. Make sure it matches corporation papers, licenses, utility statements, and bank statements. Also make sure the business name and all other information is the same on every online listing you find.

This even includes using the word ‘and’ or an ampersand (&). Pick one and stick with it! Why? Lenders and credit issuers interpret differences as fraud. Keep records of where your business name is, to be sure you catch everything. And if you ever change your business name, make sure to change it everywhere.

Business Address

Your business address must be a real brick and mortar building. That is, it has got to be deliverable physical address. This can never be a UPS box or a PO Box. Some lenders don’t approve and fund unless this criterion is met.

If you want to look like a larger business than you are, use a virtual address. This can also be a good idea to hold meetings or interviews. It’s a lot more professional than doing this on your front stoop. We like Regus, Davinci, and Alliance Virtual Offices. But at least one credit issuer doesn’t accept virtual addresses.

EIN

Get a free EIN for your business at IRS.gov. Much like you have a Social Security Number, your business has an EIN. Use your EIN to open a bank account and to build a business credit profile. Take the time to verify all agencies, banks, and trade credit vendors list your business with the same Tax ID number.

Business Entity

To get financing or credit for your business you must have a business entity. Often, a corporation or LLC business entity gives you more credibility. And corporate entities by default reduce your personal liability. Other entities (like partnerships) don’t. This is because incorporating creates a separate legal entity. You must file this with the Secretary of State for your state. Make sure your entity is set up in the same state as your business address.

Industry and Risk

An early step to Fundability is setting the industry your business is in. Some industries are riskier than others. With traditional funding sources, added risk can mean stricter underwriting guidelines or even no funding at all. Risky industries tend to be where chances of personal injury or property damage are high. Or there are a lot of cash transactions, or the revenue stream is unstable. Or there’s a low barrier to entry (so owners may not be skilled or experienced). Weapons manufacturing, gas stations, and consulting all fill the bill.

Why Risk Matters

The biggest reason why risk matters has to do with funding. Lenders may hesitate to do business with high risk businesses. So, those businesses must find other solutions for financing. These can include crowdfunding, angel investors, venture capital, building credit for business and more. Still, a lot of businesses would rather work with lenders.

NAICS Codes

Choose NAICS codes for your business at the IRS website. Federal statistical agencies use these codes to classify business establishments. This is to collect, analyze, and publish data, on the American business economy. NAICS codes also identify businesses which are high risk. The IRS, lenders, banks, insurance companies, and business CRAs use them. Note: the NAICS list of high risk industries is old and there are no plans to update it.

Of course you want to be honest when choosing your NAICS code. But if more than one can apply, you need not choose the one that’s higher risk. So it pays to check and be careful when choosing. If only high risk codes work, you can change your business, to match a related but lower risk code. There is nothing underhanded or dishonest about doing this.

Business Phone and 411 Listing

Toll-free phone numbers are best. Lenders see them as a sign of business credibility. For a single owner with a home-based business, this makes the company seem bigger. It’s easy and inexpensive to set up a virtual local phone number or a toll free 800 number. Use VoIP (voice over internet protocol) to have the number ring on any cell phone or landline.

If you don’t want customers calling your home all day, don’t use a personal cell or residential phone as a business phone number. It also helps with Fundability to have a dedicated business phone number. Your phone number must have a listing with 411 for most credit issuers and lenders to approve you. Check if your record has a listing and make sure your info is accurate. No record? Then use ListYourself.net to get a listing.

Business Licenses

Contact state, county, and city government offices. See if there are any necessary licenses and permits to operate your type of business. Licensing requirements differ, depending on state, town, and industry. Being licensed builds credibility in your business. This can help you get more customers.

Web Domain and Professional Website

Lenders and credit issuers research your corporation on the internet. It is best if they learn everything straight from your corporate website. Not having a company website can hurt your chances of getting corporate credit. It should be professional, with helpful info for anyone finding your business online.

Buy web hosting from a hosting company. Your domain should be your business name, if possible. You need a company email address for your business. This email must be on the same domain as your website. Use a professional email address like yourname@yoursite.com. This is professional and helps your chances for approval from a credit issuer. Do not use Yahoo, AOL, Gmail, Hotmail, or similar kinds of email.

Business Bank Account in the Business’s Name

This is one of the more crucial steps to building business credit in 2022. You must have a bank account devoted to nothing but your business. The IRS does not want you commingling funds. Make accounting easier and reduce the risk of audit at tax time. Keep personal and business funds separate. A separate bank account makes it easy.

Being able to offer more bank account records helps you get larger business loans. It helps to increase your borrowing potential.

Business Merchant Account

Opening a business merchant account is a smart way to help your business. Now your business can accept credit and debit cards. Studies show that customers spend more if they can pay by card. This also increases your finance options. It tends to be more secure, too.

Get Set Up with Business Credit Reporting Agencies

To start really establishing business credit, go to D&B’s website and look for your business. If you can’t find it, get a free D-U-N-S number on the D&B site. A D-U-N-S number + 3 payment experiences leads to a PAYDEX score. You need a D-U-N-S number to start building business credit. Once in D&B’s system, search Experian and Equifax’s sites for your business. Now that your business is all set up, it’s time to start building business credit.

Steps to Building Business Credit in 2022 from the Ground Up

The steps to building business credit in 2022 lead directly here. Start with vendor accounts. This is a proven way to start building business credit. Each of these steps to establish business credit, and every credit issuer can help your business. It’s meant to help you qualify for business credit cards with EIN only that you’ll want to use. This isn’t building for the sake of building or to increase a number. These credit issuers have what your business needs to succeed. Keep building–your time in business helps.

Starter Vendor Credit

Starter vendors are open to working with most businesses, even startups. Make sure vendors report to the CRAs—many do not. Vendors that report do so within 60 days. They help you build your business credit profile and score.

Terms vary depending on the vendor, but they tend to be Net 30. This means you have 30 days to pay in full. At least one doesn’t accept virtual offices. And you often need a D-U-N-S and an EIN at least. But you don’t need collateral, good personal credit, or cash flow.

Business Credit Building with Vendor Accounts

One of the best things about vendor credit is that it’s often not from a bank. As a result, 31 CFR § 1010.230 (a 2018 federal regulation) does not apply. It requires that anyone in a business with at least a 25% stake or control must provide their Social Security number on a loan application. No Social Security Number means issuers must decide on your credit application with EIN instead of SSN. For any SSN field if you’re not including your SSN, don’t put ANY other number in there. That violates two federal laws!

Add payment experiences from three vendors. Once they report to business CRAs like Dun & Bradstreet, you start qualifying for more credit. But keep in mind, any cards issued by banks fall under federal regulations.

For starter vendors, check out our starter vendor research. And for the most up to date info, confirm on the vendors’ sites.

Business Credit Cards with No Personal Guarantee

As you build exceptional business credit and pay your bills on time, credit issuers trust you more. You get higher limits and better terms, and start to get business credit cards with no PG.

Retail Credit

Retail credit comes from major retailers like Staples. Buy everything from office supplies to power tools. Retailers check if business info is uniform everywhere and if your business has proper licensing.

There can be a time in business requirement. You may need to have at least a certain number of employees. You may have to meet a minimal annual sales amount. Terms can be revolving. You need at least 3 accounts reporting to business CRAs.

Fleet Credit

Use fleet credit to buy fuel, maintain vehicles of all sorts, and repair vehicles. Even businesses which don’t have big fleets can still benefit. These are often gas credit cards.

There may be a time in business requirement. But if your business doesn’t meet it, you may be able to instead offer a PG or give a deposit to secure the credit.

Business Credit Cards

Business credit cards are more universal-type credit cards, like MasterCard. Use them almost anywhere. These cards may even have rewards programs or offer other valuable perks.

Terms can be revolving. Often you need at least 14 accounts reporting to business CRAs. There can be longer time in business requirements. You may need to have at least a certain number of employees. Qualifying for bank credit cards means you can meet most if not all the requirements for other kinds of financing.

Beyond the Steps to Building Business Credit in 2022: A Quick Look at Business Financing

Incurring debt and then paying it back on time helps you build business credit. Startups tend to not qualify for bank loans or most SBA loans. But they may qualify for loans from alternative lenders. For startup owners with good personal credit, our Credit Line Hybrid is an excellent choice. You can build business credit and finance a business at the same time.

Our Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. Many report to business CRAs—build business credit at the same time.

You need a good credit score or a guarantor with good credit for approval (FICO score of at least 680). No financials necessary. Loans go up to $150,000. Note: some cards may report on your personal credit.

Monitor Your Business Credit at D&B, Experian, and Equifax

Yet another aspect of the steps to building business credit in 2022 is monitoring your business credit reports. Know what is going on to spot trends and put on the brakes if you must. If there are errors, you can dispute them. And you’ll stay focused on the process because business credit building never ends. But monitoring can get pricey fast.

Monitor Business Credit at D&B, Experian, and Equifax for Less

But there’s a solution! Did you know you can get business credit monitoring for all 3 of the big business CRAs, and all in one place—for less? Credit Suite offers monitoring through its Business Finance Suite (through Nav). See what credit issuers and lenders do. So you can improve your scores and get the business credit and funding you need.

Improving Your Reports

Paying off accounts on time always pays dividends, as does avoiding bankruptcies. Avoid lawsuits if possible. It’s always wise and helpful to be correcting errors as you spot them.

Use Your Business Credit History to Get Higher Credit Limits

Not every cardholder gets a credit limit increase if they ask for one. Credit issuers want to know you’ll pay them back. A good payment history assures a credit issuer that you’ll pay your debts. You’re less risky to them, so they feel they can extend more credit to you.

As you qualify for credit limit increases, you’ll get new offers for more credit. And as you continue to show how responsible you are in paying business debts, approvals will come easier. Credit issuers trust an ever-increasing business credit score.

Get the most favorable funding by paying all bills on time. This gets your business a PAYDEX score of 80. You’ll also get an Equifax Credit Risk Score of 90 or better. And you’ll get a good FICO SBSS score, driven (in part) by on-time payments and business credit history. For Experian, historical behavior (payment history) is 5—10% of the total score.

Steps to Building Business Credit in 2022: Takeaways

Business credit building is a process. Performing the steps in order saves time, money, and aggravation. Get the best scores by paying your bills on time, every time. And monitor your reports to spot errors and fix them ASAP.

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Credit Strong: Read This Before You Sign Up

Credit Strong is a Division of Austin Capital Bank. It offers credit building programs for both personal and business credit. Does it work? Yes, but not on its own. It can be a legitimate part of a credit building system. Is it worth it? The short answer is, it depends. It can, if you handle it properly.

Credit Strong Business Credit Builder

The credit builder program at Credit Strong is an account that combines a cash secured commercial installment loan and a commercial savings bank account. When you open the account, you choose the program you want. There are two different ones when it comes to the business credit builder.

The 5 year plan is $199 per month and the 10 year plan is $115 per month. Both programs report on your business credit report as payment on a $10,000 installment loan. However, you do not receive any loan proceeds.

Rather, the funds from the loan are deposited into the savings account as collateral for the loan. You can not access the funds in the savings account for the life of the loan. During this time, the loan and payment activity for the loan are reported to commercial credit bureaus. In turn, you are building the credit profile for your business.

Who Does Credit Strong Report To?

Right now, the business credit builder accounts only report to Equifax and PayNet. They claim plans to expand reporting for commercial credit to Experian and the SBFE soon. It’s also important to note, they do not do a hard pull, or inquiry, on your personal or business credit. So, just applying for an account will not negatively impact your personal or commercial credit.

Who Qualifies for a Credit Strong Business Credit Builder Account?

To qualify, a company must:

Have a registered EIN
Be at least 3 months old
Be an LLC, Partnership, or Corporation
Have a physical U.S. address as your place of business

Individuals must:

Have at least 25% ownership of the business and a larger share of ownership than anyone else
Have other owner that owns 25% or more of the business individually
Be a permanent U.S. resident and at least 18 years of age
Have a physical U.S address inside the U.S.
Have a valid Social Security number (SSN) or individual taxpayer identification number (ITIN)
Possess a valid identification document like a driver’s license, state ID, passport or Permanent Resident Card- AKA a “Green Card”

Also, these accounts are not available in Florida currently, and some industries and activities may be prohibited.

Does Credit Strong Work?

This is a tricky question. In short, the answer is yes. It does help build your business credit score by reporting payments to business credit reporting agencies. It’s a little more complicated than that, however.

First, it takes way more than just one account reporting to build strong business credit. Also, there are more business credit CRAs than just Equifax and PayNet. If a lender pulls your business credit from Dun & Bradstreet or Experian, this account will not even show up. Therefore, it will not affect your business credit score on these reports at all.

That’s not to say the plan doesn’t work. On the contrary, it can be very helpful. It just won’t work on it’s own. It works better as a part of a complete business credit builder process.

How Do You Get Your Money?

Of course, if you are making deposits into an account that you cannot touch, you are probably wondering how you get access to that money. After the loan’s balance and outstanding interest is paid, and your account is closed, there is a processing period of 6 business days before the savings account is unlocked. You can keep the funds in the account or submit a request to the customer support team to transfer the funds.

After the savings account is closed, remaining funds can be sent to the payment method on file via direct deposit. That is of course, after interest and fees.

Can You Cancel Your Account Early?

What if you can no longer afford the payments? You can close your Credit Strong Business credit builder account at any time. There is no prepayment or early termination fee required. To close your account, you will need to pay any outstanding interest and loan balance using your linked payment method.

However, payments more than 30 days late will be reported as “late” to credit bureaus. Also, using funds from a locked business account to pay off a credit builder loan will result in the loan being reported as “paid out of collateral.”

This is where some customers run into issues. Basically, what happens is, the funds you have in your account are used to pay the loan. It looks the same as if you put up another asset for collateral and the bank took it in payment for the loan. So, be careful. Once you start, it’s best to keep going.

Credit Strong and the Better Business Bureau

Credit Strong has a B rating from the BBB. There are a lot of bad reviews, but they are mostly related to the personal credit builder product. Furthermore, they are typically from customers that did not understand exactly how the product works.

It appears that most thought they could cancel and get the full amount of payments back at any time. However, what they actually get is the full amount minus interest and fees. It’s important to understand all of the details before entering into any agreement.

Is Credit Strong Legitimate?

Yes, they are a legitimate division of an FDIC bank. They offer a product that can help you build credit in the name of your business. However, that is all it is. The main benefit is that you build business credit. There are no funds for use. That is what they promise, and that is what you get.

This is a product that can and will help you if you use it properly and understand what you are getting. However, for it to do any good, it must be combined with other accounts that help build business credit as well. How do you get more accounts? The Credit Suite Business Credit Builder can help! It can help you set up properly and find vendor accounts that will help you build business credit and get things that you need for your business. This allows you to use your money, rather than having it locked away.

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What You Need to Know About How Personal Credit Impacts Business Operations

There are 125 factors that affect the fundability of your business. Personal credit is one of them. Since it impacts the fundability of your business, personal credit impacts business operations.

Personal Credit Impacts Business Operations in More Ways Than One

Fundability is the obvious one. This is the ability of your business to get funding. If you don’t have funding for your business, it can’t operate.

However, there are more subtle effects as well. For example, if you are worried about your personal finances, business decisions can suffer. You may be more tempted to make decisions based on trying to control personal issues, rather than what is best for the business. Personal financial issues can distract you from running your business well.

Control What You Can, Mitigate What You Can’t

Bad credit doesn’t have to be the downfall of your business. Some factors are out of your control. Others are not. The key is to know what is causing the problem, fix what you can, and mitigate the rest.

One way to mitigate personal bad credit and its negative impact on business operations is to build strong business credit. It can also help to know which types of funding rely most heavily on the credit score from your personal report.

Until you improve your credit, you may not qualify for a traditional business loan. However, there are other options.

Your Personal Score Even Affects the Types of Funding You Can Get

While you are working on improving your credit score, you don’t have to be stuck without funding. You just have to find those types of funding that you can qualify to get with a less than ideal credit score.

Invoice Factoring

If you have open invoices and offer credit to customers in some form, then you can get paid faster with invoice factoring. Usually, this involves invoices with net terms, such as net 30, 60, or 90. You turn those invoices over to a factoring company, and they give you an agreed upon percentage of the total of the invoices. You get this amount of money immediately, and when your customer pays, the factoring company keeps their agreed upon fee while sending the balance to you.

Merchant Cash Advances

A merchant cash advance (MCA) technically isn’t a loan. Rather, it is a cash advance based upon the credit card sales of a business. A small business can apply for an MCA, and have an advance deposited into its account fairly quickly. This is ideal for business owners who accept credit cards and are looking for fast and easy business financing.

A lender will review 3 months of bank and merchant account statements, looking for consistent deposits. They’ll also verify revenue of $50,000 or higher per year and a time in business of 6 months or longer. A lot of Non-Sufficient-Funds (NSFs) showing on your bank statements will likely be a deal breaker, as will excessive chargebacks on merchant statements.

Basically, they want to see that you manage your bank and merchant accounts responsibly. Of course, a decent number of consistent credit card transaction deposits each month is important for this type of financing as well.

Alternative Lenders like Fundbox

Fundbox offers a revolving line of credit for up to $100,000 and will auto debit your weekly payment from your bank account. They connect directly to your online accounting software. You pay in equal installments over the course of a 12 or 24 week plan.

You do need to have a 600+ personal FICO score and $100,000+ in annual revenue, and you must have a business checking account. Ideally, you will also have 6 months in business or more.

Can You Fix Personal Credit?

If you have bad credit, it needs to be fixed. How do you do that? The short answer is, pay your bills. Still, if you already have bad credit, it will take some time for that to make a difference.

Also, make sure your credit report is current and free of mistakes. YIn fact, you can get a free copy of your credit report annually.

The three main reporting agencies when it comes to personal credit are:

You can get a free report from all three each year. How?

Per FTC.Gov:

“You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies. Order online from annualcreditreport.com, the only authorized website for free credit reports, or call 1-877-322-8228. You will need to provide your name, address, social security number, and date of birth to verify your identity.”

Once you get your report, read it carefully and make certain all of your information is correct. Contact the appropriate credit agency in their preferred manner if you find a mistake. Each agency has its own procedures for corrections. Generally, you can find them on their website. Online options for disputes are more common now due to the pandemic.

These steps will help you get a jump on improving your credit score.

Credit Monitoring

In addition to a free copy of your credit report each year, there are free monitoring services that will give you an updated credit score each month. New information that has been posted to your credit report is available with some of these services. As a bonus, some will offer suggestions as to which factors are dragging down your score. Some of these services even provide real-time credit updates for a fee.

Good Personal Credit Also Affects Business Operations

Of course, a good FICO score will impact business operations as well. Business lenders will generally look at personal credit when you apply. Consequently, good credit will not only help you get approvals, but better rates and terms also.

Maintaining good credit is important for a number of reasons. Keeping your business running is one of them.

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