How to Build Business Credit If You Have Bad Personal Credit

As an entrepreneur, one of the biggest hurdles you may face is securing funding for your business. It can be even more challenging if you have bad personal credit. However, building business credit can help you overcome this obstacle and establish credibility for your business. In this blog post, we'll dive deeper into the steps you can take to build business credit, even if you have bad personal credit.

Separate Personal and Business Credit

Separating personal and business credit is the first step to building business credit. Personal credit is tracked by consumer credit reporting agencies such as TransUnion, Equifax, and Experian. Business credit, on the other hand, is tracked by commercial credit reporting agencies such as TransUnion Business, Experian Business, Dun & Bradstreet, and Equifax Business. By separating personal and business credit, you can establish a strong credit history for your business, which will help you secure funding and establish credibility.

Register Your Business

To build business credit, you must have a legitimate business that is registered with the state and the IRS. It's crucial to have a business phone number, business location, and a website to create credibility and pass compliance when applying for business credit. Consider forming an LLC, as it is a quick and efficient structure to set up for most people. By having a registered business, you can create separation from personal liabilities and lawsuits, making it easier to access funding and establish business credit lines.

Establish Credit Relationships

To build business credit, you need to establish credit relationships with vendors and suppliers. Start by applying for net accounts with vendors that offer products or services that you need for your business. These vendors may report your payment history to commercial credit reporting agencies, which will help you establish credit. You can also apply for vendor credit cards and fleet accounts, which are another way to build credit. These credit cards are typically easier to obtain than traditional business credit cards, and they often have lower credit limits.

Take Advantage of Business Credit Lines

Business credit lines are an excellent alternative to traditional loans, particularly for new businesses. They often have zero percent interest rates for the first six to 18 months and provide continuous access, making them an attractive option for start-ups that may not know how much money they need initially. By taking advantage of these credit lines, you can build business credit and establish a payment history that can help you secure future funding.

Share Your Experiences

Building business credit can be a challenging and confusing process. That's why it's essential to share your experiences and learn from others who have been through the process. Join online communities or forums, attend business events, and network with other entrepreneurs. By sharing your experiences, you can gain valuable insights and tips on how to build business credit, even if you have bad personal credit.

Monitor Your Credit Report

Once you've established business credit, it's important to monitor your credit report regularly. Check for errors, inaccuracies, and fraudulent activity. If you notice any issues, dispute them immediately. This will help you maintain a strong credit profile and increase your chances of securing funding in the future.

Conclusion: 

In conclusion, building business credit is crucial for securing funding and establishing credibility for your business. By separating personal and business credit, registering your business, establishing credit relationships, taking advantage of business credit lines, sharing your experiences, and monitoring your credit report, you can build business credit, even if you have bad personal credit. Remember, building business credit takes time and effort, but the benefits of securing funding for your business are well worth it. At Broker Solutions, we're dedicated to helping business loan brokers and entrepreneurs achieve success. Check out our website for more valuable resources and tips to help you grow your business.

Invest in Yourself with Broker Solution's Career-Focused Courses

Are you ready to take control of your financial future? At Broker Solution, we offer three courses designed to help you achieve your goals. Our courses include the following:

• Broker Solutions Academy: In-depth training for those interested in becoming a business loan broker. We provide you with the tools and knowledge necessary to become a successful business loan broker, including access to industry professionals, comprehensive training materials, and ongoing support.
• Credit Consulting Academy: This comprehensive course is designed to teach you how to help yourself and others improve their credit scores. You'll learn how to analyze credit reports, identify areas for improvement, and implement strategies to help clients achieve their financial goals. In addition, you'll also learn how to fix your own credit and start your own credit consulting agency. This course provides you with the knowledge and tools necessary to help you achieve financial success while helping others do the same.
• Unsecured Business Lines Academy (DIY): This course is for those interested in securing unsecured business lines of credit on their own. You'll learn how to navigate the lending landscape and gain access to funding sources that can help you start or grow your business.

Our courses are designed to help you start a new career or improve your financial health. Join us and start building a better future. Contact Broker Solutions today!