How to Build Business Credit and Avoid Common Mistakes

Building business credit is crucial for any business owner, whether you are a startup or an established business. Properly establishing business credit can help you secure funding, improve your business's credibility, and separate your personal credit from your business credit. However, building business credit can be a challenging process, and many entrepreneurs make mistakes that can hinder their progress. In this blog post, we will discuss the steps you need to take to build business credit properly and avoid common mistakes.

Submit Correct Information on Applications

One of the most common mistakes entrepreneurs make when building business credit is submitting incorrect information on applications. Lenders will not be able to verify the information submitted if it does not match across different platforms. To avoid this mistake, ensure that all information you provide on applications, such as your business name, address, and EIN number, is accurate and consistent.

Form a Real Business Entity

Another mistake many entrepreneurs make is not forming a real business entity. Sole proprietors doing business as a DBA are still 100% liable for business debt and take on legal liability, making it challenging to build business credit. Instead, form a real corporation such as an LLC, S corp, or C corp. This will allow you to establish credit lines tied to an EIN number rather than a social security number.

Make Your Business Fundable

To make your business more fundable, you need to position yourself properly. Begin by naming your business with a name that won't cause funding issues, avoiding provocative names for businesses in sex or porn industries. Getting a real EIN number is crucial as it helps you open up bank accounts, get credit cards, and other essential tasks. You should also get a business address or a virtual address to stay away from using your home address, which affects your business's credibility.

Conclusion:

Building business credit takes time and effort, but it is a critical step in growing your business. By following the steps outlined in this blog post, you can avoid common mistakes and build business credit properly. Remember to submit correct information on applications, form a real business entity, and make your business fundable. If you are struggling to build business credit, seek assistance from experts in the field. At Broker Solutions, we offer free training, tips, and assistance to help entrepreneurs access capital and fix personal credit. Contact us today to learn more.

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!