If you are determined to make 2020 the year you start building business credit, then this article is for you. Genesis Business Credit
helps entrepreneurs to develop strong business credit profiles so that they can obtain the business credit lines and business loans they need to launch, sustain, and grow their companies. This article offers 4 expert tips to help you start building business credit in 2020
Building Business Credit Tip 1: Separate your business & self.
It is important to establish your business as an entity that is separate from you. Doing so protects you in two ways: 1) if your personal credit suffers for any reason, it won't affect your business credit, 2) if your business fails for any reason, it won't affect your personal credit.
To start separating your business and personal identities, establish a phone number and physical address that is different than what you use personally. You can easily and inexpensively get a VOIP phone number and virtual business address via various online sources. This is excellent for work-from-home entrepreneurs who only have one address.
Building Business Credit Tip 2: Incorporate your business.
If you want to succeed at building business credit in 2020 and beyond, you're going to need to incorporate your company. There are several options to choose from depending on the legal structure of your company - including limited liability company (LLC), C Corps, and S Corps.
C Corporations are the most expensive and complicated to set up. S Corporations fall in the middle and LLCs are the least expensive and easiest to establish. Either of these options will help you begin building business credit. Incorporation also achieves a deeper separation between yourself and your business.
Building Business Credit Tip 3: Get an Employer Identification Number (EIN)
You can think of an EIN as a type of social security number for your company. It is provided for free by the IRS. It is also called a Federal Tax Identification Number. The IRS will use this number to identify your business and the taxation accounts associated with it.
If you are serious about building business credit in 2020, then you're going to have to embrace the IRS. You can get an EIN immediately (in most cases) when you apply online on the IRS's website
. The process is fast, easy, and free.
Building Business Credit Tip 4: Get a DUNS Number
A Data Universal Numbering System (DUNS) Number is another necessary identifier your company needs to start building business credit. DUNS Numbers are issued by Dun & Bradstreet (D&B), one of the world's largest business credit reporting agencies (CRAs). Each 9-digit DUNS Number uniquely identifies a single business entity.
More than 300 million businesses have DUNS Numbers currently on a global level. Along with an EIN, many banks, credit card issuers, vendors, and other creditors require a DUNS before they will extend business credit. You can apply for a DUNS Number from Dun & Bradstreet here
. The process is also quick, simple, and free-of-charge.
Summary Tips for Building Business Credit in 2020
Building business credit isn't something that you can do overnight. It takes some planning, time, and action but it is completely doable. The tips above will help you to get started on the correct path. Once you have them checked off, there are various other ways to continue building a strong business credit profile into the future. Genesis Business Credit
specializes in helping entrepreneurs build business credit that is separate from their FICO credit ratings. Contact our friendly and helpful team today to discuss how we can assist you with building business credit that you need to achieve your entrepreneurial goals.
Sources https://genesisbusinesscredit.com/ https://www.dnb.com/duns-number/get-a-duns.html https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online