Give me some credit: How to build business credit

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Having the access to building business credit will make your entrepreneurial journey a lot easier. The ability to build business credit gives you the ability to apply for loans and credit cards with high limits and perks such as cashback and flyer miles for travel. You get access to purchase things such as vehicles, lease office space and office equipment using your business credit profile without depending on your personal credit score. However, for a lot of people the journey of how to access business credit is still unclear. Here are a few key tips and practices to build business credit. 

#1. Be aware that when you are starting your business and applying for credit-based opportunities your personal credit will reflect what you can be approved for on the business side until you build a solid business profile that standalone. So, if you have a FICO score of 600, the chances of immediately getting approved for an AMEX Business credit card with no limit might be slim.

#2. Doing things as simple as setting up a phone account in your business name and opening a business bank account are great ways to establish the legitimacy of your business and begin to build a solid credit history. Note that most banks, especially Credit Unions will offer you an opportunity to open a business credit card.

#3. Opening credit lines with vendors who report credit lines to credit reporting agencies is a great way to establish a great business credit report. Companies such as Net-30, Quill and Uline all offer credit-based financing that allows you to build a positive credit reporting history. Plenty of these vendors do not require you to use your social security number to apply for credit and you will not need to do a personal credit check.

#4. Only take out credit that you are confident you can maintain a positive payment history and low utilization. You get approved for a credit card that has a $10,000 limit and you immediately think of all the things you can accomplish. But the worst thing you can do is put yourself in a position where you can only make the monthly minimum payments. You will end up accruing so much interest and will lose a lot of money. You also do not want to have a habit of carrying over high balances each month. Make it a habit that whatever you charge on your card, to at least be able to pay 75-80% of that back during your billing cycle. On time payments and carrying low balances will get you approved for credit increases and access to low interest loans and credit lines. 

#5. Keep track of your credit activity. Be sure to sign up for a credit monitoring service that allows you to regularly view your credit report and allows you to track things like potential identity theft and inaccurate information that can hurt your credit profile.