When you obtain credit in your Business Name, it is called Business Credit. Business Credit allows the business to build its own credit score and profile. Since the business now has its own credit profile and score, the owner can now qualify for business credit. This business credit is based on the ability of the business to pay, not the business owner. No personal credit check is required from the business owner when the business has its own credit score and profile. Your trade references (payables) have a significant impact on your business credit score. How you manage credit in the past is an indicator of any future performance. It is therefore important to effectively manage your business credit. When companies manage their business credit effectively, this will work well for them.

Just like people have credit scores and reports, businesses also have credit scores and reports. Dun & Bradstreet, Experian, amd Equifax all keep records of credit information for businesses. Suppliers, lenders, insurance companies, and creditors use your business credit report to evaluate the credit worthiness of a business. Not all companies or vendors report to business credit bureaus; building a creditworthy business and establishing excellent business credit score therefore requires strategic planning.

You must actively work to build your business credit over time. Business credit has many benefits so it is important to take the time to get this right. Benefits to business credit include:

• Building a credit profile separately from your personal credit
• Borrowing power is doubled (Both personal and business credit now)
• Qualify for retail credit cards
• Qualify for business loans
• Qualify for lines of credit
• Qualify for better payment terms
• Limit personal liability
• Improved opportunities to secure contracts
• Improved opportunities to secure leases
• More favorable terms on contracts or interest rates
• Receive better offers from suppliers
• Protect your personal credit
• Establish banking relationships for your business
• Expand operations