Has anyone every setup business/corporate credit and if so what company did you use and what company should I stay away from? Also, how long did it take for you to start getting the credit establish?
First of all, you don’t need any outside businesses to set up your company’s credit, but it will take some time, effort, and patience of your part to build it.
What are the goals for credit-building for your company? What kind of line of business are you in that you believe that credit buiding is necessary?
I want to flip houses.If I have business credit I would not have to apply for a hard money or a bank loan. The money will be at my fingertips without having to apply for anything.How do you get funding for your deals if you don’t go thru a hard money lender and don’t have the money in the bank to do so? And have you ever setup business credit for youself Jake?
You’ve raised many questions in your short post, I’ll do my best to answer them as best I can and direct to a site that can better explain what I can’t! It sounds as if you may have a bit of a misperception regarding what business credit is. Like an individual, a business entity can establish a credit rating for itself, although the entity’s credit rating is NOT automatically created when the biz entity is created. The ultimate goal is to establish a strong enough credit profile for the biz entity that it can obtain lines of credit completely on its own without the need for the owner of the entity to personally guaranty the credit.
Their are different types of credit lines available to businesses, with the most common type (and most readily available) being lines at retail stores, such as Staples, or HomeDepot. From there you can work your company up to other lines of credit, such as credit cards at gas stations and the like, and finally up to actual business credit cards. Believe it or not, there is an actual defined process one can follow to establish these tradelines for your company. Head on over to creditboards.com and visit the Biz Credit forum and begin reading everything on the forum to learn more.
Thanks for your help Jake.
Jake, where is the best place to view a copy of your credit report. For an individual and a business.
There’s a million places where you can view a copy of your personal credit report. Annualcreditreport.com is the easiest site where you can check your credit report once a year for free.
As for your biz credit, you don’t automatically have acredit report for your company, you have to take the time to build one. Duns and Bradstreet is the largest and most well known biz credit reporting company, so I would head over to dnb.com to start reading, and remember, no matter what DNB tells you, you DONT need to pay them any money to start establishing your business’s credit profile.
Thank you Good Stuff!!!
I have been trying to for about a year to set up my business credit…I literally had all kinds of companies tell me if i gave them x-amount of dollars they would help me set up my business credit…Well needless to say I’ve been doing alot of leg work and reading and found out i can do all this by myself and i dont need to pay anyone to do it for me…I also realized in doing so the most important thing to business credit is having a viable business address and telephone number listed in the directory… Before i got my enity set up through the irs it was really hard for me to get any kind of business credit…Now I have this it aint realy A Problem at all…Has everyone been having to do this with their business.What are the next steps to tier 1 and tier 2 maybe even tier 3 business credit???
We use local banks for lending and personally guarantee our loans. Our credit is very good for our personal side. We don’t have a DNB # or anything like that. We get lending on good deals when we want it. We’re currently doing no money down deals and able to secure financing for some of the more costly parts of rehab. We don’t have any store credit cards.
justin- understandable that you can perform REI without having ridiculous amount of business credit set up, but wouldn’t it be nice to have a $10,000 AmEx/Home Depot/etc card, NOT attached to your name, that you could use for the company whenever/whereever you need to? I’d love to be at the point where I DONT need to PG all my loans-thats the level where I really want my biz to be at in a couple years…
Good info on these posts, thanks guys.
I have had quite the experience with business credit. I paid 15K to a service for an LLC with promise of 1mil in credit lines. The credit crunch was too much and the service went under, all I am left with is the entity. I have been building the credit myself and have some tradelines now. It is definitely a process and could take a year or two. There is a lot of info out there about it and services that will help but avoid the up front costs as I have never heard anyone who has had success with them. Best of luck!!
I thought about getting a card for Lowe’s since that’s pretty much all we have here. My wife wanted to stay away from that so we just use the the debit card. It would be nice to not have to PG the mortgages, but as long as we can still get funding for the deals we want I’m ok with it.
I am a new investor and would love to build my business credit.
The problem with credit cards ect. is that I don’t even have a need for them.
My property manager always buys and then bills me once a month for any minor stuff. Not complaining!
But, how can I really build credit for the business even though it is so small?
My bank is tight with money right now too. Went down that road with commercial side already.
I always am coming across great deals, but pass so many because of the money.
Find a new bank. Some are lending on NOO properties; some aren’t. You do not have to mess with the D&B or paydex stuff to do this. If you want to, that’s fine but it’s not a necessity.
Are there issues with your personal credit/income that preclude you from sealing the deal?