The Daily Scribe

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How To Improve Your Business Credit . . .

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There is a growing misconception that because you can effectively manage your personal credit, you will be able to secure a business loan or credit. Nothing could be further from the truth. Not only are the two very different, but you can run the risk of damaging your personal credit as well, if you attempt to use it for business. For individuals just starting their business these tips should prove helpful:

1.  Name your business. In fact, not only should the name be easy for anyone doing business with you to remember, but it needs to be on your bank account, business credit cards, stationary, product packaging and marketing materials.

2.  Incorporate . . . seeking the advice from an accountant or corporate attorney.

3.  Location of your business: Check local zoning regulations to ensure you can operate a business in your neighborhood.

4.  Apply for an EIN (Employment Identification Number) from the IRS in your company’s name. It’s fairly easy to do online, by phone, fax or mail. In my case I left it to my accountant.

5.  Establish a business phone line. I would advise getting a separate fax line. Make sure that your business is listed in the yellow pages (411).

6.  Open a business checking account.

7.  Once you receive your company’s first telephone bill, take it, along with your business banking information to a local office supply store.

Staples and Office Depot for example offer two kinds of business credit: Revolving and Net Pay.

For the purpose of giving your business credit score a boost, opt for Net Pay. The ability to pay itemized invoices will make it easier to track expenses. This should enable you to keep cost to a minimum and ensure that your account balance is paid in full each month.

This straightforward approach along with paying all your account balances in full each month will in time help you to reach your goal of improving your business credit score.

Bradley Booth/Freelance Commercial Writer/Author

 

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One Response

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  1. Excellent suggestions. If your needs and your finances allow it, another idea is to buy a vehicle in your business name. You may be required to guarantee the loan personally, but as long as the corporation is doing the buying, you are on your way to establishing corporate credit. Hope this helps. Jonathan Kremner saying thank you bloggers for giving and receiving business help

    Jonathan Kremner

    June 9, 2008 at 3:53 pm


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