How to Build Your Business Credit Profile

You can start building your business credit even before opening your doors for business. Your first step, if possible, is to establish your business as a separate entity, to separate your business credit profile from your personal credit profile. This means you want your business to be structured as a corporation (a Limited Liability Company, or LLC, is most common for small businesses).

Your second step is to make sure you have a well-written business plan, which includes all the sections found in such a plan, along with the necessary financial details. Be prepared to defend everything in your business plan by showing how you came up with your figures and developed your plans. In addition, before progressing any further, you need to make sure you have all necessary licenses and/or permits to start and run such a business. Your initial goal is to establish a viable business on paper, with all the details already in place.

Next, you want to find out exactly what the requirements are for both lenders and credit bureaus. By doing such a credit assessment, you'll know what standards are expected before you start to establish and build your credit profile. It’s always advantageous to know what's required of you before embarking on any such project.