8 Quick Tips on How to Establish Business Credit and Get Financing

1. Put your business on the map

If you haven’t done so yet, you’ll need to establish your business as separate legal entity with your state. That means either incorporating, or setting up an LLC or S-Corp (discuss what’s best for your situation with a tax advisor). Next, you’ll want to apply for an Employee Identification Number (EIN) through the IRS website.

2. Open a business bank account  

This will help you clearly separate your personal and business financials. Use this account to take care of all business expenses (including paying yourself by depositing into a personal account). If you apply for financing, most lenders will want to see your business account bank data to help them make the decision.

3. Get a business phone number

You can use a cell phone, VoIP, or a landline, but you need to have a separate phone number for your business. Make sure the number is listed, so it can be found.

4. Check to see if you have a D-U-N-S number

Once your business is legally established, you should check to see if it’s listed with Dun & Bradstreet. They are one of the main credit bureaus, and its PAYDEX score is used in most trade credit applications. If D&B doesn’t have a file for you, you can register for a D-U-N-S number for free.

5. Look up Experian and Equifax credit files

Besides Dun & Bradstreet, Experian and Equifax are the other two major business credit bureaus. Lenders tend use Experian and Equifax data when making decisions. Unlike D&B, you can’t manually register with Experian and Equifax to build out your profile. They do it automatically by pulling information from public records and the information sent in by your business creditors and lenders. It’s similar to how your personal credit profile gets populated.

6. Get a line of credit with vendors or suppliers

You may already have some these relationships established. Think about the companies you do business with every day, like Home Depot, Staples, Office Depot, UPS, FedEx, and so on. Ask them to extend you a small amount of credit; most will, they want to keep you as a customer. Just be sure you verify that they send your payment history to the business credit bureaus. It’s reported voluntarily. Ideally, you’ll establish four or five of these types of accounts to help fill in your business credit profile.

See Also: Running out of Cash? Get Help With a Business Line of Credit

7. Open a business credit card

If you’ve been using a personal credit card to pay for business expenses, now’s the time to stop. You should open a couple business credit cards that are not tied to you personally. You’ll need to verify they report to the business bureaus when applying. Most business cards will include travel points or cash back programs—money you can use to reinvest into your business.

8. Pay your bills on time—or early!

Unlike personal credit, where you have 30 days to make a payment before it dings your credit, your business credit scores can take a hit even if you’re one day late. In fact, the only way to get a perfect “100” D&B PAYDEX score is by paying your bills before payment is due.

ANY TYPE OF NEGATIVE ITEMS CAN BE REMOVED

BANKRUPTCY

FORECLOSURE

SHORT SALE

JUDGMENTS

CHARGE-OFFS

REPOS 

LATE PAYMENTS

COLLECTIONS

INACCURATE INFORMATION

STUDENTS LOANS

TAX LIENS

INQUIRIES  ETC......

EXPERIAN,TRANSUNION, EQUIFAX CAN BE FORCED TO REMOVE  FROM YOUR CREDIT PERMANENTLY!!!!!!!!

Here are 13 must-do tips for responsible credit card use – whether you’re building credit from the ground up or repairing damage done to your score:

1.  Limit the number of cards: If you have a mailbox and a home address, you probably receive an array of credit card offers promising dazzling perks and rewards. Yet every time you apply for a new card, the card company pulls your credit score. Too many pulls in a short amount of time will damage your credit. Too many cards can also increase your risk of falling into deep debt. Most people need no more than one or two credit cards.
2. Opt-out of prescreening: To minimize the temptation to open new cards,  
3. Avoid unnecessary fees: Credit card companies charge fees for late payments – even when it’s just a day or two – and exceeding card limits – even if it’s only a few dollars. Worse, these issues may trigger a higher interest rate and ding your credit score.
4. Pick your payment due-date: Setting a payment date a few days after payday helps ensure you have the money to make credit card payments.
5. Pay off balances every month: Don’t fall into the trap of paying just the minimum payment each month. It can take years to pay off your debt in this manner. Try to pay off your entire balance each month, and don’t waste money on interest.
6. Never get a cash advance: The prospect of quick cash is tempting, but cash advances almost always come with hefty fees and high interest rates.
7. Avoid frivolous spending: This one seems obvious, but it’s easy to plunk down a credit card to buy something you can’t really afford. Stick to your budget, and save up for big purchases over time.
8. Don’t close old accounts: While this may seem counter intuitive, closing a credit card can actually lower your credit score because it reduces your credit-to-debt ratio, a major factor credit bureaus use to determine scores. Cut up the card if it will help you resist the urge to use it, but keep the account open.
9. …Unless there’s a steep annual fee: Some credit card companies charge an annual fee, usually to the tune of $50 or more. In this case, the benefits of closing the account and pocketing that fee may outweigh the potential effect on credit scores, especially if you don’t plan to apply for any loans or lines of credit in the near future.
10. Review statements each month: It’s important to check your account statement each month for accuracy. It’s also smart to make sure you understand the fine print.
11. Use the perks: Credit cards offer many important perks – beyond travel rewards and cash back – but many people don’t know about them. Your card member agreement spells out all of the benefits, from buyer protection and car rental discounts to extended warranties and free airport lounge access.
12. Use cards online: With identity theft on the rise, it’s often best to use credit when making purchases online. If your number is stolen, you won’t be out any money while your credit card company investigates. With debit cards, your money may be inaccessible until the situation is resolved.
13. Seek debt help early: If you’re struggling with high debt, don’t delay contacting a credit counselor and establishing a plan for paying down balances and improving your credit.

7 Tips for Improving Your Credit Score

1. Request a copy of your credit score report – and make sure it is correct.

Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.creditchecktotal.com, .  Note that you may have to pay for the numerical credit score itself.

 

1. Set up automatic bill pay. 

Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score.  Avoid missed payments by setting as many of your bills to automatic pay as possible. 

 

1. Build credit through renting.

VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.

 

1. Keep balances low on credit cards and ‘revolving credit'.

Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.

 

1. Apply for and open new credit accounts only as needed.

Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.

 

1. Don’t close old, paid off accounts.

According to FICO, closing accounts can never help your score and can in fact damage it.

 

1. Talk to credit counselors if you’re in trouble.

Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score. For more information on debt management, contact the National Foundation for Consumer Credit 

Raise Your Credit Score with These Tips

Start now. Credit scores don’t change overnight. If you plan to buy a home a year from now, you need to get to work immediately in order to get your credit in shape by the time you apply.

Do a reality check. Order your credit histories from the three primary credit bureaus: Experian, Equifax and Transunion. Review them for accuracy. You’ll see immediately how detrimental making a payment that is late by only a few days can be to your credit.

If you see errors that you can document, ask for them to he removed. Take note of any really serious marks against you like foreclosure, bankruptcy, tax liens and collections actions. If you have any of these, they will remain on your record for five to seven years and you will have to work extra hard to improve every other aspect of your credit to qualify. Sign up for a service that will notify you of changes in your credit.

Pay your bills on time. If you have missed payments, get current and stay current.Sign up for a “wallet” program through your bank or online service. Pay your bills through your bank so that there is no delay.

With today’s technology, there is no excuse for ever making a late payment to a regular monthly creditor. The longer you pay your bills on time after being late, the more your FICO Scores should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever. The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report

Reduce your use of credit. Most people use their credit too much. Create a budget and learn to live on a cash basis. Use your credit cards only for purchases you can pay off quickly or for emergencies. Keep balances low on credit cards and other “revolving credit”; high outstanding debt can affect a credit score.

Don’t close unused credit cards as a short-term strategy to raise your scores, but don’t open new credit cards just to increase your available credit. Reducing your balances is important, but taking the next step and closing cards won’t really improve your case; lenders like to see that you have credit available. A closed account remains on your credit report.

5 tips for holiday shoppers to get smart about chip credit cards

This isn't an overnight switch

The acronym stands for , MasterCard and Visa — the entities that developed the new chip format. Cards equipped with EMV chips already are in use in Europe, Canada and other places.

In this country, banks have been sending new cards to customers throughout the year, though the process is far from complete. The American Bankers Association estimates that 575 million chip cards will have been issued by the end of 2015. But not everyone will have them for another couple of years.

The cards work a bit differently for consumers

You can tell if you have one of the new cards by looking for a gold or silver square or rectangle on the cover.  Consumers don't swipe their cards but, rather, insert or "dip" them into terminals — face up and with the chip facing forward. Then they must wait for a transaction to finish, after all the items have been rung up. Consumers also might need to answer a few prompts on the terminal screen. You can't pull out the card before this process finishes, which is signaled by a beep or instructions from the cashier.

Transactions take a bit longer to process. How much longer won't be known for a bit longer. "This will be the first holiday season after the transition," said Rob Nichols, incoming president and CEO of the American Bankers Association. "It will be an instructive  holiday season for our industry."

The bigger issue is remembering to pull your card from the machine when finished. When swiping, you never let go of your card. But this time you might let go, then forget.

The new cards have little microprocessors in them

One reason EMV cards are more secure is that the information on swiped cards isn't encrypted. Also, the new cards contain tiny microprocessors that run software that produces a code, or "cryptogram." This code is sent across the network during a transaction and is required for authorization by the bank computer on the other end. Suspicious transactions can be spotted and stopped. Each code can be used only once. The chips themselves are difficult to copy or counterfeit.

The new cards carry the same fraud protections — for consumers

On credit cards, card holders by law are on the hook for a maximum $50 in fraudulent charges, but many banks absorb the losses completely. That doesn't change with the new system. "Customers are fully protected," Nichols said.

On debit cards, the liability depends on how quickly you notify the bank. If you make the report before any fraudulent purchases, you bear no liability. But it rises after that.  After 60 days, you could be liable for all malicious transactions. But again, these liability points don't change.

But there is a liability shift for merchants, many of whom haven't yet upgraded terminals to process the new cards. Starting in October, retailers could face fraud losses if they accept swiped transactions on EMV cards that could have been processed on new terminals. One major exception involves card readers at gasoline stations, which are more costly and complex and don't have to make the shift until October 2017.This liability change, and the need to upgrade terminals, is a source of bickering between the banking industry and retailers.

Cards with fraud-resistant chips can be identified by a silver or gold rectangular design featuring a hologram. (Photo: American Express)

The new cards won't eliminate all card-focused fraud

The new cards should cut fraudulent activity on transactions in stores, but that doesn't erase all fraud issues. EMV cards do make in-store transactions safer, but not those done remotely.

Fraudulent charges still can be made over the phone or Internet by criminals armed with stolen account numbers and other information. Thus, consumers still need to safeguard their personal information and steer clear of suspicious websites.

Adam Levin, chairman of Credit.com, suggests that it's wise to limit the number of credit and debit cards that you carry on shopping excursions. It's also smart to sign up for alerts with your bank or credit card companies that notify you of transactions. Levin recommends monitoring for unauthorized account openings by ordering your credit report through www.creditchecktotal.com.

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