It's a fact that most businesses won't report your good or bad credit ratings, and you might
run for years on trade credit with your vendors and never show any movement on your
business credit report. So why even try?
There are statistics about average Americans and their credit, and a typical American has
one hard credit check per year and eleven open accounts. If a business owner, such as your-
self, merely uses personal credit for all business activities, there will be more credit checks
and likely more accounts with debt on the personal credit report, theoretically lowering the
personal credit score. This will make it harder to obtain personal credit when needed.
The solution is to use your EIN to keep your personal credit out of business activities as
much as possible.
1. Assuming that you have your EIN, go register it with the business-credit bureaus and
comply with their requirements. Some of them are simple, like having a dedicated tele-
phone number for your business. Don't offer any red flags and be as thorough as possible.
2. Have your business plan available. It's often asked for by businesses that offer credit.
3. Find a vendor that will offer you trade credit without a personal credit guarantee.
4. Ask that vendor to report the payment records to the credit bureau to help you build your
5. Make sure you don't make late payments.
6. Continue to accrue debts and then subsequently make payments each month to keep your
business-credit profile current. Pay them off each month if possible.
It's in your best interest to begin early and get your business credit started off on the right
foot. It's a simple process, it's a benefit of being your own boss, and it can keep the person-
al side of your credit as clean as that of the average American out there—but we all know
that the business owner is anything but average!
This is a big topic and businesses can be made or broken by their vendor relationships. I
classify the important vendors as the suppliers you buy your inventory from. A predictable,
honest, and reliable vendor goes a long way in helping your company succeed. In the pro-
cess, the vendor succeeds as well, so this relationship can easily be looked at as a win-win
You'll want to choose carefully. In the beginning, you won't have any “relationships.”
So shop around for your inventory with as many vendors as you can find. What makes
a good vendor? Someone who sells reliable items at a great price who will stand behind