Building a good credit score for your business brings numerous benefits. Besides becoming eligible for more favorable interest rates from the best small business credit card issuers, banks, and other lenders, it will also enable you to pay for goods and services at better terms.
The first step in establishing your business credit history is to incorporate your business. By forming an LLC, you formally separate the legal obligations of the business from your personal legal obligations.
The next step is obtaining a federal Employer Identification Number, which is required when filing for taxes and opening a business bank account on behalf of the LLC.
After opening a business account with the bank, make sure you establish a business credit file with Equifax, Experian, and TransUnion. You will need at least one business credit card issued by companies that regularly report to credit bureaus, as well as to establish a line of credit with vendors and suppliers who also provide data to credit reporting agencies.
When you have completed all these steps, it is especially important to settle your financial obligations on time, as this increases your business credit score.