Build Credit


First and foremost, you need to have the correct business structure if you intend to build your business credit. Creditors will not give you the time of day much less a line of credit if your company is not a corporation or an LLC. Choose your business structure wisely to maximize your ability to build credit under your business name. Also, you may want to consult an accountant regarding the various tax ramifications of each structure depending on the specific type of business you are looking to pursue. You can form these entities with the state of NJ online. There are various companies that will do this paperwork for you for a fee (in addition to the fees charges by the state). Why pay those fees when you can do it for just the fees the state charges? You will also need a FEIN (also called a Tax ID number) number for tax purposes. This is equivalent to a social security number, and uniquely identifies your business to the IRS. You can also request one online at the IRS website.s

You want to make sure your business is established and legitimate BEFORE you start applying for any credit. There are 3 very important aspects you need to consider to get this done. The business address, phone number and a domain name.

Open a business bank account. You will need your formation papers that were given when you formed the company and also the EIN number. The banks may have a minimum deposit requirement and some have withdrawal restrictions, so do some research before you decide. Talk to other business owners for a referral. Your bank will give you a business debit card and some starter checks.
You must now open credit profiles at all 3 major credit bureaus used in business credit. These are Dun & Bradstreet, Business Experian, and Business Equifax. Dun and Bradstreet is the oldest and most widely used for business credit, so start here.

You can not have more than 2 credit inquiries in a 30 day period when applying for business credit. Excessive inquiries are huge red flags to the creditors. Likewise, do not apply for a second line of credit if you have a previous credit application that is still pending. If you do so, you are likely to have both credit applications denied!


Excessive updates to your credit profiles can also be red flags to creditors. Try to consolidate your updates and limit them to no more than one update in a 12 month period. Updates include a change in your business address or phone number. It is not uncommon for a business to relocate or obtain a new business phone number. However, when a business is doing this multiple times within a 12 month period, it may imply that they are running or hiding from someone. Therefore, the creditors treat this a major red flag.


Only after you are done with all the items above should you move on to start applying for business credit (with no personal guarantees). So confirm the following: