Can My Start Up Build Business Credit?

In a previous post I mentioned how you can start building business credit right away by having your everyday expenses like web hosting, phone services, and printing reported on your profile. If the companies you’re doing business with are not reporting your payment history you can use a business credit builder product at DNB that will get the job done.

You can also start corporate credit accounts with companies like Verizon, Quill, Accurate Office Supply, BestBuy, FedEx and many others. You will need to provide your EIN number when you open an account and some companies will request your Dun & Bradstreet number. Remember, not all companies that you start business credit with will report your payment history.

Also, each company has its own credit approval guidelines and minimum requirements for business startup credit. For example, Accurate Office Supply offers a net 30 account with no personal guarantee but requires your business to have a minimum of three trade references and one bank reference.

So if your goal is building a strong business credit file then you will either need to select companies that report to the business credit bureaus or use the Dun & Bradstreet CreditBuilder to add your trade references yourself.  

Startup business credit cards

While trade credit with companies like Quill and FedEx can help your business fund its short-term needs, cash credit is much more preferable. The mistake that most business owners make is applying for a business credit card that requires a personal credit check as well as a personal guarantee.

These types of cards are a glorified version of a personal credit card because the charges and debt your business incurs all report on your personal credit reports. Furthermore if you default on any outstanding debt incurred on the card then you are personally liable for that debt.

So you’re probably wondering how a start up company like yours can obtain business credit cards with no personal credit check or personal guarantee. For starters I suggest a secured business credit card for establishing business credit. After several months of solid payment history you can request an unsecured credit line increase.

In addition you may want to consider a business debit card from the bank that services your business checking account. Even though this doesn’t start corporate credit for your company it does help establish bank credit.

You should always take advantage of these types of products offered at your bank. Some banks like Comerica, Key Bank, and Associated Bank have their business credit card issued through Elan Financial Services.  Elan’s underwriting guidelines for business credit cards require a personal credit check for approval but your company’s revolving debt and payment experience do not report to your personal credit reports. A big plus for protecting your personal debt to credit limit ratios.

If you're a startup company, I encourage you to start building business credit by taking advantage of everyday expenses, corporate credit accounts, a secured business credit card, a business debit card and business credit cards.

To your business credit success!