Tag: setting

4 Mistakes to Avoid When Setting Up With the Business Credit Bureau

Lenders pull business credit reports and scores from a business credit bureau. However,  not every business has a business credit report at all, let alone a credit score. Business credit, in stark contrast to consumer credit, does not start building automatically.

Avoid These Mistakes When It comes to Your Business Credit Profile

With consumer credit, as soon as you use your first credit card you have a credit report. If you continue to use credit responsibly, that report will include a strong credit score. The same is not true of business credit, and that leads us to mistake number one.

#1: Assuming You Are Automatically Set Up With the Business Credit Bureau

Just owning a business does not ensure you have a business credit profile.  There are some things you have to be intentional about to ensure this happens.  The first step is setting up your business with a Fundable foundation to ensure that it is recognized as a separate entity from you as the owner. This has to be done before you can even get credit in the name of your business.

Then, a business credit profile can be established with the bureaus.

How Do You Set Up a Business to Be Fundable?

In addition to a D-U-N-S number, you need to be sure your business has:

  • Separate contact information
  • An EIN
  • A dedicated business bank account
  • A professional website
  • And its own email address

This list is not exclusive, but it is a great start. Additionally, you’ll need to be incorporated. Operating as a sole proprietorship or partnership does not help you get set up with any business credit bureau.

Why Does a Fundable Setup Matter?

If your business is not set up to be Fundable, the information on the credit report may not be accurate. Furthermore, if your business is not set up to be a separate entity from you the owner, payment experiences may not go to business credit bureaus at all.

#2: Assuming There Is Only One Business Credit Bureau

There are many business credit bureaus. The three main ones are Dun & Bradstreet, Experian, and Equifax. Among the others, FICO SBSS is gaining popularity. Not all of them function the same way when it comes to setting up a profile with them either. It’s different for each one.

Many of them don’t really require anything from you. But, you still have to have your business set up properly.  Then, when your creditors report payments, they are reflected accurately.

Dun & Bradstreet

D&B is the oldest and largest credit reporting agency. Go to D&B’s website and look for your business. Don’t see it? It’s probably because you do not yet have a D-U-N-S number. You MUST apply for a D-U-N-S number from them. If you do not have one and your creditors report payments, your business will not be recognized in the D&B system regardless of how your business is set up. This number is how D&B gets your company into their system.  You can get one for free.

Once you have a D-U-N-S number, you’ll need at least 3 payment experiences before they assign a PAYDEX score. A payment experience is just a reported purchase from a business, which reports to a credit reporting agency.

Experian

Experian will assign your business an identification number called a BIN after you have a payment experience reported to them. Just be sure your business is set up to be Fundable.  Then when you have business creditors that report to them, your business will be in the system.

Equifax

Equifax assigns companies an Equifax ID. It doesn’t appear that you will need to sign up for or request one.

#3: Assuming You Already Have a Business Credit Profile With a Business Credit Bureau at All

Suppose you have been in business for a while. Maybe you are just now figuring out what business credit is. Maybe you thought you had credit in the name of your business, when actually what you have is business funding that you got based on your personal credit.

Where do you start if this is the case?First, look for your business credit profile from each of the main credit reporting agencies, starting with D&B. Of course, if you do not have a D-U-N-S number you will not be in their system.It is POSSIBLE that you may be in the Experian or Equifax system. but you’ll want to check your information closely and request corrections to any mistakes.

Business Credit Monitoring

The next question is, how do you do this? You can go through the business credit bureaus directly, but it can be costly. Credit Suite offers business credit monitoring with all three of the most commonly used business credit reporting agencies, for a fraction of the cost.

Once you see your reports, or lack thereof, you can be proactive in either correcting errors or establishing initial reports. What sort of errors are you looking for? In addition to payment experiences being reported incorrectly, you need to look at your actual business information.

Make sure your business contact information is up-to-date and accurate. If you already have an EIN, ensure that it is attached to your business and is correct. One big issue a lot of small business owners run into is inconsistency in the name of the business.

Something as small as using an ampersand in one place and the word “and” in other places can cause big problems. Ensuring your business name is correct and consistent everywhere, including on your business credit reports, is crucial also.

#4: Ignoring FICO SBSS as a Business Credit Bureau

This score is becoming increasingly common. It stands for FICO Liquid Credit Small Business Scoring Service. Unlike your personal FICO, the SBSS reports on a scale of 0 to 300. The higher the score the better. In general, most lenders demand a score of at least 160.

The thing is, you don’t really “set up” your business with FICO SBSS. The scoring model for this score is very different from other business credit scoring models. However, that does not mean you are helpless.

How Does FICO SBSS Calculate Business Credit Score ?

The score itself isn’t readily accessible. The formula for calculations is proprietary, and they guard it well. The information is not public. Of course, this means you can go into a lender totally blind as to what your FICO SBSS credit score may be.

With other credit reports from business credit reporting agencies, you can actually get a copy of your credit report and know where you stand. In contrast, the FICO SBSS can be different from lender to lender.

How Does a Lender Get Your FICO SBSS Score?

After you fill out a loan application and turn it in with all necessary documents, the lender processes this information and sends it to FICO with a request for your SBSS score. At this time, the lender can ask for certain factors in the score to carry more weight than others. Your score can vary depending on how a lender weighs each factor .

A score variation can happen if a lender puts more weight on your personal credit score or your business credit. Similarly,  they could choose to weigh annual revenue as more important than payment history. It is their choice.

FICO then searches business credit information from business credit agencies including D&B, Experian, and Equifax. As a result, your score with these bureaus affects your FICO SBSS.

What Can You Do?

Even though there is no real way to set up your business with FICO SBSS, you can definitely work to affect the score. Establish your business with the other business credit bureaus. Keep your personal and business credit in good order. Then, if a lender chooses to use that score, regardless of how much weight they put on each factor, you should be good.

You Must Be Intentional When it Comes to Your Profile with Any Business Credit Bureau

You aren’t powerless. The great thing about business credit is that it does not just carry you off before you know what is happening. In contrast, you have to intentionally jump in. The first step is to set you business up to be Fundable. Then, get a D-U-N-S number. After that, find accounts that report and get started building your business credit score.  Check out our business credit builder for a step-by-step guide to building the strongest business credit score possible for your business.

The post 4 Mistakes to Avoid When Setting Up With the Business Credit Bureau appeared first on Credit Suite.

Setting up a Business Email and Website to be More Fundable

When You’re Setting Up a Business, Did You Know You Need to Pay Attention to Your Company Email and Website?

Setting up a business means attending to what seems like a million little details. Your corporate email and website are two of those details. Don’t drop the ball on them!

But let’s start with business credit.

Business Credit

This is credit in a corporation’s name. It is not tied to the owner’s creditworthiness. Instead, biz credit scores depend on how well a company can pay its bills. Hence consumer and corporation credit scores can vary dramatically.

The Benefits

There are no demands for a personal guarantee. You can quickly get business credit regardless of personal credit quality. And there is no personal credit reporting of company accounts. Biz credit utilization won’t affect your consumer FICO score. Plus the owner isn’t personally liable for the debt the corporation incurs.

The Details

Getting corporate credit is not automatic. Building it requires some work. Some of the steps are intuitive, and some of them are not.

Fundability

Fundability is the current ability of a firm to get funding. Some factors are within your control. Others (like your time in business) aren’t. Your online presence and data are one area which is at or close to 100% with your control.

Business Credit, Fundability, and Business Funding Applications

The better your business credit and fundability are, the more likely you will get approval for financing. Today, let’s concentrate on your online presence, that is, your email address and your website.

Lenders Use Data to Decide on Your Application

They check information from a variety of sources, and they don’t tell you about any of them. Knowing what these secret sources measure can only help you. Understanding what matters the most makes getting a loan A LOT easier, because you know what to improve first. This information is the difference between getting an approval and getting a denial.

Lenders Use LexisNexis Information

LexisNexis is one source where many of the lenders reviewing loan applications get their information from. They offer information regarding likelihood to pay, or not. Lenders compare LexisNexis information to what you put on your loan application. If the application and LexisNexis don’t match, then, the loan providers will deny you a loan. They will see the inconsistency as fraud.

LexisNexis connects all of the data that pertains to you, both positive and negative. They have access to

  • criminal records
  • every email address you’ve ever used (these are your professional and personal email addresses)
  • your speeding tickets
  • any mortgage you have ever held

Keep your business protected with our professional business credit monitoring.

Lenders Use Online Information Including Your Business Email and Website

One place where lenders and vendors will be looking for your company is online. Even if they’re not specifically checking out your online presence, they may still need to know how to order your product or service, or where to send praise or complaints. Your online presence is where they will find that information, or not.

Your Business Email and Website: Your Website

What happens if your family member or a friend built your website? Maybe that person is talented, but corporate websites differ from personal ones. A business website needs to be easy to navigate. It needs to answer customers’ questions.

Styles differ. Wedding photographers and construction companies differ. They have dissimilar sites and design sensibilities, but they both have Contact and About pages, and information about what they do.

Make sure you own your domain, and not just your domain at Wix or WordPress or the like. You can do this by buying hosting. This is through hosting companies like GoDaddy or HostGator.

Your Business Email and Website: Your Email Address

Given that so much more of lending decisions is going on online these days, then your email address is an opportunity for your firm to puts its best foot forward. Don’t squander this easy and free opportunity! General email addresses like admin@yoursite.com tend to be best.

With a general email address, if someone leaves your employ, another employee can seamlessly take over that email address. A username like admin, webmaster, or even hello is far, far better than cutiepie or the like, even if you’re in a playful industry that caters to kids. After all, your bank and banker aren’t.

Your Business Email and Website: Records Congruency

Keep your records consistent! This includes your online records. LexisNexis and the SBFE (Small Business Financial Exchange) are looking at everything, so it had better match.

Inconsistent records will lead to a denial due to fraud because that’s how lenders interpret inconsistencies. This is a cause of denials which is in the owner’s hands. You have the ability to change and correct this.

This means your corporate name, address, phone number – everything! – must look the same in these places and more:

  • Every place you have an online presence (your website, Yelp, SoTellUs, etc.)
  • IRS records
  • Company records with Dun & Bradstreet, Experian, and Equifax
  • All licenses needed to run your business
  • Incorporation documents

Copy/paste this information; don’t chance it with retyping.

Keep your business protected with our professional business credit monitoring.

Build Fundability on Business Credit Applications to Avoid Denials

Keep your firm looking fundable (legit) with:

  • A professional website and email address
  • A toll-free phone number
  • List your phone number with 411
  • A business address (not a PO box or a UPS box)
  • Get all necessary licenses

Your Business Email and Website: Online Fundability

There are some aspects of fundability where you should pay particular attention to what’s going on online. They include:

  • Firm owners listed and listed ownership uniformity
  • Company name and address uniformity
  • Industry aligned
  • Company domain
  • Information uniform on all records

Online Fundability: Business Ownership Listings

Records consistency matters here, too. Your website should show who owns your company. And that information needs to be consistent. So if the owner is named Susan Johnson on your website’s About page, then she can’t be listed as Sue Johnson on your Contact page. If your ownership changes, you need to show that here.

Business Name and Address Uniformity

Abbreviations can be your downfall here, as can punctuation like hyphens, commas, and colons. If your Contact page says your main office is on Main Street, then your About page can’t say it’s on Main St.

If you move, or you add subsidiaries and other locations, then you need to update that information everywhere. This even means whether you use your 5-digit ZIP code, or a ZIP plus 4 code (9 digits).

Fundability: Industry Alignment

If your industry is over the road trucking, then it needs to be listed that way. Pro tip: when your industry can be called several different names, like long distance trucking, mention those other phrases on your website.

Your Business Email and Website: Company Domain

When your company domain matches your company name, it helps with fundability. Pro tip: try to match what people will be searching for online, so if (for example) the word ‘brothers’ is in your company name, then determine if ‘brothers’ or ‘bros’ will be used by people searching for your company and its goods and services online.

Keep your business protected with our professional business credit monitoring.

Bonus: What Your Website Needs

Good websites can help you get funding and convert prospects to customers. While websites differ, there are some things they all need. Such as:

  • Easy to use navigation – hiding important information won’t help
  • Speed – if visitors have to hang around and wait for pages to load, they’ll go elsewhere
  • Intuitive organization – keep your address and phone numbers on your About and Contact pages because people expect that data to be there

Your website also needs:

  • Branding – if your company is known for the color green, but it’s nowhere to be found on your website, you’re losing an opportunity for connection
  • Visual design – ugly websites, and those which haven’t had a design update in a decade are not conducive to enhancing your reputation or making sales
  • SEO – search engine optimization means making your site easier to find. Stuffing in keywords doesn’t help with this, but writing honestly about your biz and using the kinds of terms people search for? That does

One of the more vital items your website needs is content. This can mean blogging, and it certainly means creating pages which explain what you do and what sets your biz apart from its competition. It also means a page devoted to each product you sell or service you provide. Again, you’re making it easier for your prospects to find you.

Setting Up a Business Email and Website: Takeaways

More fundable companies can get more money, and they tend to get more prospects who decide to become customers. One area of fundability you have total or near total control over is your corporate online presence. Keep it professional, uniform. and appealing, and easy to use. We can help you with even more aspects of fundability.

The post Setting up a Business Email and Website to be More Fundable appeared first on Credit Suite.