Countless small business credit card offers are just waiting for the next business account to open. You may have even received these specialized small business offers in the mail. Building business credit can be very important for the future of your company. Just like a good personal credit history, a strong business credit history shows your creditworthiness and also gives credence to your business as a legitimate company.
When you have your own company, you may have to juggle business credit cards, business lines of credit, and small business loans to keep your company moving forward. Your credit behavior with these forms of borrowing for business can help you to build strong business credit if you play your cards right. One thing to remember when working to build corporate credit is the importance of separating your personal credit and spending from your business credit and spending. Treat your business as a separate entity to ensure you receive adequate protection for your business as well as opportunity to borrow higher amounts of money through your corporate line of credit.
Benefits of Building Business Credit
A good business credit score typically allows your business to borrow more money and also allows you as the business owner to negotiate more favorable terms for your business loans. You can also establish relationships with vendors where you have a corporate line of credit or other special arrangements.
To ensure your company builds its own corporate credit, financial experts recommend having your own business credit cards separate from your personal credit cards. This allows you to build business credit that is not at all associated with your personal credit. Your purchases using your corporate credit cards will be reported to Dun & Bradstreet, Equifax, and Experian, the three business credit reporting agencies. To get the most out of your business credit opportunities, be sure to pay your bills on time and avoid spending more than you can afford. By keeping your debt to assets ratio in good shape, you can show your company’s creditworthiness with ease.