How To Get Business Credit For My LLC?

Lisa JacksonDecember 22, 2023

One of the most crucial things you can do as a new small business owner is to begin establishing your company's credit. It's time to begin establishing your entity's credit at the same time that you are working to establish your personal credit, if necessary.

The eight steps that follow are simple and widely accepted, and they'll get you started on the path to obtaining credit lines for your company. Please understand that there are no shortcuts, and you are not inventing the wheel. You'll earn credit for your business if you follow the steps outlined here, seek out assistance as needed, don't give up, and remain persistent.

The eight steps that reputable industry professionals recommend are listed below:

1. Give your company legitimacy. You must operate a profitable business—one that is not merely a hobby or leisure activity. Have a strategy in place before you start working hard to establish business credit. This is undoubtedly essential for reaping the rewards of tax planning as well.

2. Create a company. Get an Employer Identification Number (EIN) and create an S corporation or a limited liability business (LLC) that can become an S corporation (EIN). You'll need a formal organization, and you'll want to design a strategy for sustainability and success in credit-building. Better still, if you already have an entity. Unless you've previously attempted to create corporate credit and your company has a terrible payment history and bad credit, you don't need to start with a new corporation.

3. Get a D&B number. You'll require this number, also known as a DUNS number, as it serves as the foundation for your Paydex score. The rating system for your corporate credit is called a Paydex score, and it is similar to a personal FICO score. Register your business and its EIN to get the process started.

4. Think about hiring a company credit coach. There are trustworthy and reasonably priced businesses that can perform the thorough job necessary to inform you of the credit-building procedure. 

This process includes, among other things, tedious technical tasks and follow-up, such as writing letters to creditors and credit-reporting companies to have issues removed from your personal credit score. Additionally, they can offer tools and directories of businesses and credit cards that are typically simpler for your firm to obtain. They'll also make sure you stay away from any hazards and help you learn as much as you can.

5. Open trade and vendor credit lines. Apply for credit lines from Home Depot, Staples, Verizon, Office Depot, or other merchants under your company's name, then use the cards and make on-time payments. For some of these credit lines, you might initially be turned down and have to personally co-sign, but that's okay in the early stages of the procedure. During this process, you must rely on your credit coaching firm.

6. Make a company credit card application. You can begin applying for business Visa, MasterCard, and American Express cards when the time is perfect after establishing the business's credit history and credit score through the aforementioned processes.

7. Verify that the business credit bureaus are D&B. Corporate Experian and Business Equifax are receiving information from your creditors. Keep track of your company's credit rating and confirm that your creditors are regularly submitting to your business credit reports.

8. Develop healthy behaviors. Always pay on time, and develop your company credit score using some of the same guidelines as your personal credit.

Creditors will assess your business's stability and earning potential when you establish your business credit. Keep in mind that your objective is to establish a company and use the credit you are working so hard to obtain to benefit your company. 

Focus on the task at hand and portray your company as a different entity from yourself. Have a separate checking account, business website, phone number, and answering service (if required). Finish your tax returns on time and concentrate on generating legal money. A lawful business strategy will be used for legitimate company credit.

If you are interested in more articles like this, here’s one about how to apply for a covid small business loan.

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