Wednesday, July 28, 2010

Can I Establish A Business Credit File For My Homeshoring Company?

Yes you can! Creating a business credit file for your homeshoring company is more achievable than you ever imagined. I am sure your first thought is “this is probably a very difficult goal to accomplish”. Establishing your business credit file will take some work on your part but let me assure you that it is a lot easier than you think. It is very feasible to establish a business credit file for your homeshoring business.

Corporations are separate legal entities having their own privileges and liabilities distinct from those of its members. For taxes and credit purposes corporations are treated as individuals. When your homeshoring company is registered as a Corporation or Limited Liability Company you are protected from all personal liabilities. As a business owner you have the unique opportunity to have a separate business credit file and a personal credit file. The two files will never commingle.
Dunn and Bradstreet and Experian Business are the two major business credit reporting agencies. Most businesses are assigned a paydex score based on their trade lines. For a new business a padex score of 75-80 is regarded as positive credit rating. My suggestion is that before you start applying for corporate credit, your paydex score should be 80 or above. Keep in mind creditors are not required to send information to the business credit bureaus. They do so voluntarily, so if a creditor is not reporting just ask them to do so.
To start the process of establishing a business credit file your homeshoring company has to be registered under the correct organizational business structure and have all the following documentation:

  • Business Plan and Financial Statement
  • Articles of Incorporation
  • Business Licenses including all Permits allowing you to do business in your area
  • Employer Identification Number (EIN)
  • Dedicated Business Telephone Line - has to be listed under legal name with 411
  • Your Dun and Bradstreet number – 9 digit number used to verify credit history
  • A Corporate Checking Account
Now that you have all your documentation in place you can start applying to companies that are willing to establish business credit without using your personal credit file. These companies should also be willing to report to the major credit reporting agencies. A good starting point is with companies like Staples, Office Depot, Home Depot, Target and Gas Cards companies. If you have excellent personal credit you may want to consider applying for an unsecured American Express and or Business Credit Card. Before starting your quest for corporate credit the business credit reporting data base should reflect at least 5 trade lines and 3 credit cards.

Still not able to find that dream homeshoring opportunity? Then take a look at An Inside Job explore all available options.  You can check it out here!

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