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Business credit is establishing trade accounts under a company’s EIN. It has no association with the owner’s Social Security number. The first step is to ensure your business is set up credibly so you meet credit issuer and lender standards, before you apply.
Next you get real usable credit through vendors. These vendors will give you credit when you have no other EIN credit established. And they report this credit to the business reporting agencies.
Within 60 days or less that credit is reported to Experian, Equifax, or Dunn & Bradstreet. Once reported, your EIN will then have an established credit report and score.
A business having its own credit is as real as an individual having their own credit. If you have any questions or concerns with the legitimacy of business credit, check google to see what SBA, Experian, Inc, NASDAQ, and other industry leaders have to say.
A business credit score is a credit score that applies to a company instead of an individual.
Most range from 0-100 (unlike personal credit scores, which range from 350-800).
The FICO Small Business Scoring Service (FICO SBSS) ranges from 0-300.
Business credit scores are determined
Access to working capital is critical for any business, and a good business credit score can help you tap into different types of credit at more favorable interest rates. Lenders, suppliers, and potential business partners will often rely on business credit reports to help determine the risk associated with certain companies and use that information to help decide whether or not to do business with them.
Small businesses, especially sole proprietors, use their personal credit scores for their business. As a result, these two scores would be the same.
However, it’s often better to separate the two. A small business owner can have poor personal credit, but their company can have good business credit. This distinction can ensure that your business gets the working capital it needs to grow.
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