Can my Corporation Establish Business Credit?

Yes, a corporation can establish business credit. It is in the best interest of both you and your business to separate the credit profile of the business from your personal credit profile. One of the reasons you decided to incorporate was to separate your personal liability and your business liability. By loaning your personal credit to the business, you create personal liability, not separation.

We want you to think about this question for a moment: if your business fails today, how much financial debt would you be personally liable for? For people just like you, that has become reality for them. They are stuck for years trying to shovel out of personal financial ruin. With a little work you can prevent this from being your reality.

Do understand that business credit is nothing like personal credit. If you make financial mistakes with your personal credit, you are able to fix it over time; not so with your business credit. If a personal creditor provides incorrect reporting you are able to have it corrected; a business can’t. And the biggest difference between personal credit and business credit is that there isn’t a single federal regulation governing business credit bureaus, so the bureaus get to make their own rules and play by their own rules. Dun & Bradstreet (D & B) is the oldest and most well-known of those credit bureaus, and the majority of business creditors rely solely on their reports when determining businesses credit worthiness. So it’s important to have a solid Duns number.

Thousands of businesses are out there promising business owners assistance with establishing business credit. You have probably heard their advertisements, offering promises of enchanted lines of business credit, instant access to unsecured credit cards, millions of dollars of investment capital, the ability to obtain luxury vehicles, to name a few. These Organizations make millions of dollars from their inaccurate advertising, due in full to business owners who leave their common sense in the bathroom so they can buy into these organizations’ programs.

We would encourage you to make establishing business credit a priority; however, be understanding when it comes to the work and time involved with doing so. If you are inexperienced in building business credit, having someone with experience to help you along the way is a great idea. If you would like assistance finding a reputable organization to assist in establishing business credit, give NexStep Innovations LLC a call.