To effectively establish business credit, it helps to properly establish your business. If your business is new, take the time to set up your business so it appears professional to both clients and lenders. Get a business phone number and, if possible, get it listed in directory assistance. Get and use a professional email address. Choose and consistently use a business address, which can be P.O. Box or even your home address if you’re just getting started. Here are 15 steps to make your business legit. Why is this important? Business details such as these may appear on your business credit reports and you want to maintain a consistent, professional image.
Most businesses should be officially registered with their state. If you formed a business entity such as an LLC or S Corp in your state, you should have completed this step. Annual filings will likely be required. (If you formed your business in another state, you may also need to register your business in the state in which you do business.
If you are operating as a sole proprietorship or independent contractor and have not registered your business, you can file a fictitious business name with your state. (This is sometimes referred to as a “DBA”.) In either case, you may need to get professional or business licenses. Check your state requirements.
Why is this important? Public information such as this may be used by some commercial credit agencies to start your business credit profile.
A DUNS number is your business identifier with the credit reporting agency Dun and Bradstreet. If your business doesn’t already have one (you can check whether it does for free), you will want to request one. It’s free. Creditsafe, Equifax and Experian all have separate identifiers (numbers to identify your business in their systems) but you don’t have to initiate this type of request with them.
An EIN is the business equivalent of a Social Security number. The IRS requires some businesses to get an Employer Identification Number (EIN), but having one is not required to establish a business credit file. However, some business financial applications may require an EIN, and EINs may be reported to business credit reports. Why is this important? It ensures your business is visible to Dun &Bradstreet.