The Mystery of Business Credit...
If you don't know the answer to any of the questions below, you are among thousands of business owners who are lost in the maze of how to build business credit. We can provide you the answers to the mystery.
- Who are the three largest business credit bureaus?
- What are the business credit scores?
- What do business lenders look at?
- Where do you find companies that grant credit?
- How do you get a company to grant credit?
- Which companies report to the business credit bureaus?
- What credit card companies do not require personal guarantees?
- What rights does a business owner have for incorrect information on a credit report?
Separating You From Your Business
You can separate your personal liability and protect your personal assets from that of the business just by incorporating. It is possible to build a business credit profile for a sole proprietorship or partnership however you are still responsible for all the debts of the company.
We recommend building your business credit as a corporation or limited liability company.
Other advantages of a corporation are:
- Separates you from your business
- Limited liability of the owners and officers
- Lower tax liability
- 100% tax deductible insurance
- Reimburse 100% of medical expenses
- Corporate image
- Raise capital and build credit faster
- Lower your audit risk as a small corporation
- Protect Your Personal Assets
- Stock ownership - easier to transfer assets
Build a Strong Business Credit Profile
Just by building a business credit profile you will be able to limit the use of your personal guarantee and build business credit regardless of your personal credit history.
You will have more:
- Cash for the business
- Convenience in purchasing
- Protection of your personal assets from that of the business
- Limit your personal liability from the business
- No need for personal credit checks
- Purchase vehicles with no personal guarantees
- Purchase equipment, computers and more with your business credit
- Preparing your business for future lending needs
Biggest Advantage of Having Business Credit
The biggest advantage of good business credit is saving money. By obtaining a favorable credit score you’ll lower the interest you pay on loans & leases.
For Example:
Business Credit Agencies
There are three main business credit reporting agencies in the United States that lenders and financial institutions rely on for information to grant credit. The three credit agencies are D&B®, Experian Business, and Equifax Commercial.
Dun & Bradstreet
- Over 32 million U.S. businesses are registered with D&B ®
- The credit profile created by D&B ® uses information provided by vendors and self reporting by the business owner
- PAYDEX score based on reported and verified payment experiences of the business
- DUNS Rating based on the financial and firmographic statements of the business
Experian Business
- Over 25 million U.S. businesses are registered with Experian
- The credit profile created by Experian uses information provided by vendors and the SBFE
- Intelliscore based on reported payment experiences and firmographic information of the business
- Financial Stability Risk Rating based on the overall financial health of a business
Equifax Commercial
- Over 33 million U.S. businesses are registered with Equifax
- The credit profile created by Equifax uses information provided by vendors and the SBFE
- Multiple scores based on payment experiences and firmographic information of the business
- Ratings based on failure risk assessment of the business
Business Credit Scores
The business credit scores with D&B®, Experian, and Equifax are what the lenders and financial institutions look for to determine credit.
PAYDEX Score*
- Score ranges from 0 to 100
- An 80 Paydex is the goal
- Based on payment experiences reported by vendors
- Need at least 3 trade references who report to D&B®
DUNS Rating*
- Various rating schedules
- Based on employee size and financial statements
- Also takes into account payment history
Intelliscore
- Score ranges from 0 to 100
- A score of 75+ is good
- Based on payment experiences reported by vendors and the SBFE
- Intelliscore is generated with 1st reported payment experience
Financial Stability Risk Rating
- Predicts the likelihood of deliquency within the next 12 months
- Scale ranges from 1-5 (1 is lowest risk)
- Considers tradeline, public filing and firmographic data
Equifax Scores
- Payment Index ranges from 1-100
- A score of 100 indicates all payments are paid on time
- Based on payment experiences reported by vendors and the SBFE
- Payment Index is generated with 1st reported payment experience
Failure Risk Assessment Ratings
- Predicts the likelihood of a business failure within the next 12 months
- Scale ranges from 1-5 (1 is lowest risk)
- Considers tradeline, public filing and firmographic data
The ONLY TrueBuild Corporate Credit Program...
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