5 Steps to Building and Maintaining Positive Business Credit
January 30, 2008 By
Overwhelmed by the idea of being responsible for managing your business credit? Most, if not all, entrepreneurs understand the importance of building a strong business credit history. However, knowing that your business credit rating is important and knowing how to build a positive credit history for your company are two very different things. The good news is that the Small Business Administration (SBA) and Bradstreet (D&B) have joined forces to help demystify the process of establishing and maintaining healthy credit for small businesses so that they can secure the loans they need..
“Both the SBA and Dun & Bradstreet have a long history of experience in working with small businesses to maximize their business success,” said SBA Administrator Steve Preston. “These are five smart and easy steps that any small business can implement to establish and maintain good business credit and protect their businesses.”
5 Steps to A Positive Company Credit File
The SBA and D&B advise entrepreneurs to follow the five tips for establishing and maintaining a healthy credit history:
1. Begin Your Company’s Credit File
The first step in building your business credit file is to obtain a D-U-N-S® Number from Dun & Bradstreet. This unique number is a unique identifier that becomes the basis of the company’s credit file. This should be done as soon as possible once your business opens.
2. Start Establishing a Business Credit History
The best way to begin building a healthy credit history is to separate your business and personal expenses and income from the very beginning. Open a business checking account and use it for all of your company expenses. Doing this allows new businesses to begin building a history of payment that can form the basis of your company’s credit history.
3. On-Time Payments
Just like personal credit, business credit scores are strongly impacted by whether or not the business meets its financial obligations in a timely manners.
4. Monitor Your Credit File
Just as it’s important for individuals to periodically check their personal credit histories, business owners need to pay careful attention to what is in their company credit file. Failure to pay attention to one’s company credit file can lead to problems with supplier, customer, and banking relationships. Small business owners can monitor their files on D&B’s dedicated portal for small business owners.
5. Pay Attention to Customer and Supplier credit
It’s in the best interest of business owners to pay attention to the credit situations of their vendors and clients. Before you agree to payment terms, it’s certainly beneficial to have a good idea of what type of payment record you can expect from customers. If you extend credit to individuals or companies with poor repayment records, your cash flow is likely to suffer.
Posted in 
content rss