When starting a business, taking steps to getting a handle on credit today can go a long way in how lenders see you tomorrow.
- Know Your Personal Credit Score
Even before starting a business, you should know your personal credit score. Get your credit report from any of the major credit bureaus. Most lenders will take your personal credit score into account when you apply for a business. Aiming for a score of 700 and above is a good starting point before applying for a business loan.
- Build a Business Credit Profile
Taking steps like opening up a small business credit card, and getting a DUNS number are simple ways to build your business credit profile.
- Keep Business and Personal Finance Separated
Mingling business and personal finances can end up being negative when applying for a business loan. Opening a dedicated business checking account, getting an EIN and generally separating your personal and business finances are some of the first actions to take when starting a new business.
- Keep Good Records
When you apply for a business loan, lenders like to look at financials over a period of time, 2 years in many cases. Good accounting records will help give the lender a clearer view of your business.
