how do i build business credit if my personal credit stinks?

[uppie1]

how do i build business credit if my personal credit is lousy> I have some old credit items that I cant seem to get off my reports. i guess Im saying my personal credit is bad so I need to know how to build business credit scores

[hulk]

You need to repair your personal credit before you can build your personal credit

[Credit Expert]

How to Establish Business Credit

Establishing business credit is never easy and does not happen overnight; especially for a new business. It can be done, and it's easier than you think.

Follow these steps, and you'll be on your way to an excellent business credit profile.

Step 1: Set up a “Corporation” business. Smart to protect yourself and the only type of business that allows you to keep your business credit and personal credit separate. Limited Liability Corporations (LLC) and Sole Proprietors are okay but you still should get a Corporation to manage it.


Step 2: Once you get your EIN, through registration, set up your business phone. Try to make sure it is at an address different then your home address because it is not looked upon favorably by the lending world to work from home. The phone number will need to be registered in the 411 directory. You may be able to call your local phone company and get a call forwarding number which is a business number that automatically forwards to any desired phone. Make sure it will list with 411 before signing up.


Step 3: After receiving your first phone bill, go to http://www.staples.com and fax in copy of application along with copy of phone bill to apply for business credit. Use professional letterhead for coversheet. You should receive the standard $750 credit line with no personal guarantee.

Step 4: Go to http://www.dnb.com and register your business to receive a D&B number. It will take 30-40 days to receive it in the mail. If you want to establish business credit sooner, you can pay for the credit builder ($399), but it's not needed unless you are in a hurry. After you have at least 5 business accounts reporting, you'll receive a Paydex Rating (similiar to FICO for personal credit).

REMEMBER - a Paydex Score will only take into account your payment history. Unlike personal credit, this is counted in days. For example, if you pay your invoices 10 days late, it will be reported as such. If you pay your account off before the statement or invoice comes, it will be reported as such. The bottom line: Pay your invoices on time, and you will get a better Paydex Score.


Step 5: Set up the following business accounts, and make at least one purchase with each one.

1. UPS - http://www.ups.com Apply online.

2. FedEx – Contact the Revenue Services Department 1-800-622-1147 press 4 then 1

3. Barnes & Noble - Contact the Purchase Order Department 1-212-414-6000

4. Quill Corporation – Contact the Credit Department 1-800-634-3090

5. Viking - Contact the Credit Department 1-888-454-5457

6. Rapid Forms – Contact the Billing Department 1-800-257-5287

7. Nebs - http://www.nebs.com Apply online.

8. Office Depot http://www.officedepot.com Apply online.


Step 6: Pay off each purchase before the balance is due. After 45-60 days they will automatically report to D&B creating your business file.



Step 7: Once you have a Paydex Score of 75+, you can apply for Lines of Credit or business Credit Cards without any sort of personal guarantee and likely be approved. We recommend you open a minimum of 12 accounts total.


Some highly recommended accounts to apply for are:

Enterprise Rent a Car (Corp. Rental) http://www.enterprise.com

Wells Fargo Bank (Visa/Mastercard) http://www.wellsfargo.com

Bank of America (Visa) http://www.bankofamerica.com

American Express (Green/Gold) http://www.americanexpress.com

Chevron http://www.chevron.com

Mobil http://www.mobil.com

MBNA Bank http://www.mbna.com

Wells Fargo (Line of Credit) http://www.wellsfargo.com

Bank of America (Line of Credit) http://www.bankofamerica.com

Union Bank (Line of Credit) http://www.unionbank.com

Cal Fed http://www.calfed.com

United California Bank http://www.unitedcalbank.com