Some good ways to build business credit include opening credit lines with vendors and opening credit cards in the company's name, explains Inc. However, before a business can build its own credit record, it must have an established identity that is separate from its owner.Continue Reading
Business owners can establish credit in the company's name by first organizing the business as a separate entity with its own employer identification number, or EIN, notes the U.S. Small Business Administration. While a sole proprietorship can operate under the name and Social Security number of the owner, the structure prevents the business from having its own credit identity. With a business organized as a corporation or limited liability company, for instance, with a separate EIN, the owner has the option of establishing a business credit record that doesn't impact the owner's personal credit.
Starting a business credit file is as simple as using the company's EIN to open bank accounts and credit cards in the company's name. Business owners can also use the EIN to get a DUNS number that identifies the business with Dun & Bradstreet, the largest business credit-reporting agency, reports Inc. Armed with a DUNS number, a business can often most easily establish credit with vendors and suppliers that provide essential material for operations. These creditors can provide new businesses with contract terms that allow extra time to pay invoices. They report good account management to Dun & Bradstreet, building the company's credit profile.Learn more about Credit & Lending