Seperating Credit Profiles

The first thing you need to do is create a “wall” or “shield” between yourself and your business. How you simply do this is start off with an LLC or Corporation. Next get your EIN number. Talk to your local experts on what your business model will be and what type of entity will best suit your venture. Remember this can still be done if you’re operating currently as a sole proprietor. Once you establish this corporate veil you will have taken the first steps on separation.

Next it’s important for people and other business to know you exist. You need to register your business with as many free directories as possible. Some of the simple examples are: Superpages, Yahoo, Google, Bing, 411 and so on. There are lots of directories out there so if you can register your business with as many as possible. You want to make it easy for ANYONE to find you. It can take a little bit of time to get your business listed on the search engines so don’t worry it will get there.

After you’re registered with directories you know want to establish your business with the business credit bureaus. Companies like Experian Business & Dunn & Bradstreet are just 2 of the many that exist. There are also smaller reporting agencies that operate in states and regions as well. Get familiar with as many as you have time to find. Once you’re established with the business credit bureaus it’s now time to move to the credit building part.

You need to start out setting up small accounts with vendors that report. There are thousands of vendors out there that extend credit in just the company name however there a few that actually report. It’s important to know who those vendors are and to obtain credit with them. After obtaining credit you will use and pay the lines of credit you established for a few months. Once your business has done this you now develop a paydex score. Paydex scores range from 1-100 so anything scoring 80 or above lets banks and lenders know you’re a great candidate to lend to. You pay your bills and pay them on time or before they are due. Business credit scores are based only off payment history so make sure you pay your bills on time, if you don’t it can hurt you. Then start applying for small lines of credit and credit cards from 2-5 different lenders in just the company name.