1. Make sure that your business has a legal entity

Your business will not be able to build business credit if it does not have an entity unto itself. And thus, it is necessary for you to be incorporated or to form an LLC (Limited Liability Company). No lender will be willing to give a business loan to a sole proprietor because this might end up as a personal loan in disguise.

2. Find a Good Address, a Telephone Line, E-mail and Internet Service

Having a good physical location for your company adds credibility for lenders to believe that your company is legitimate when your office address is not your own home address. And having the right means for people to contact you such as owning a telephone line as well as an e-mail address and even a web site, is essential especially for faster communication.

3. Check Your Business Listings

Have your company enlisted under all the necessary agencies and make sure that all your listings are under the same exact legal name as well as with the same exact phone number and address. It is very important for all your personal creditors to have you listed under a uniform identity.

4. Obtain All Necessary Business Licenses, Permits, etc.

Obtain a business license for your company and, if applicable, a license for tax resale in the state, city or county location of your business. Follow all the necessary regulatory guidelines for running your business.

5. Organize Financial Statements and Tax Returns

Be ready to present at least two years of financial statements, with which the help of a CPA is highly recommended. And it is also very important, that your business at this time should already have its own tax ID number. Both federal and state business tax ID numbers should be enlisted under the same exact legal business name.

6. Secure Bank References

A minimum of one bank reference is necessary for your business to establish its score. And it would be advisable if your bank account were at least active for two years, with a good stable balance of at least $10,000 for the past three months for it to be in a favorable position for lending. How you manage cash flow in your business will be reflected from your banking.

7. Obtain At Least Five Trade References

Your business will need five trade references that have given you a credit account. This may include your suppliers or any firm in which your company has purchased goods, preferably at a regular basis. Make sure to choose references that will give a favorable credit history to agencies investigating on your financial history.

8. File for Credit Report Agencies

Get three business credit cards that do not have personal links to you and that will give business credit reporting agencies their feedback on your company.

After doing all these, just remember to play your business in a clean and fair game and of course, pay all your bills on time, and you will surely be able to attain an excellent business credit score.

Credit scores are determined by a lot of factors, how much your outstanding debts is, how regular do you pay for it, how much you spend and how much you earn. It will also be determined by your past credits and how were you as a borrower. These are all being gathered and recorded by credit bureaus and credit reference agencies like Equifax, TRansUnion and Experian.

So if you think, you are the only one who knows that you owe a credit card company a big amount, think again because they do keep records and what is more, all the credit transactions that we get are being filed for future reference of every credit and financial institution in the country.

Credit scores is important because it can mean being accepted or rejected for a loan. With a really bad credit score, you may not be able to get a house loan, a car loan, a school loan and even a credit card. In short, with a bad credit history, your days of borrowing money is history. As an added salt to the injury, it is not only credit card companies, lending companies and banks that do get information from the credit scores.

Even private companies and government agencies use this to background check a current employee or a potential employee. You see, a credit score will determine a person’s financial savvy and sense of responsibility. This will also show just how much a person is willing to face up to a problem instead of running away from it.

This is especially true with employees that are being hired or were hired to assume posts that deal with really sensitive financial issues or those who are directly in contact with money. A credit history and a credit score is important in determining if they will be able to handle the finances well.

Mobile phone companies and credit card companies also use credit scores to determine the clients that they should target. People who have good credit scores are often those who have the spending power. Thus, they are good people to offer mobile phone packages and credit card services.  

In securing a loan, credit scores are also used in determining the kind of loan that will fit your credit profile. People who have high credit score are given higher amounts in loan, lower interest and longer time frame in which to pay the loan.

In contrast, people who do not have a good credit score may be refused a loan or at the very least be given a small amount in loan, much higher interest and shorter time frame to pay the loan. This is because credit card companies and lender also want to protect their interest. Low credit scores are more riskier and therefore warrant higher interest rates.

Credit scores can be purchased through the internet via Equifax. They will send you your FICO (Fair Isaac Corporation) score for a fee, $12.95.

First, find out what is your credit score. You can get this information from FICO that is a system developed by the Fair Isaac Corporation.

When you have the information, it is time to cut some off your expenses temporarily and start paying off those credit card debts. If you have more than one credit card, work off the one with the highest interest rate first.

If your credit score is not that bad, make sure that you do not use your credit card almost to its limit because this too may affect your credit score even if you are able to pay the bill when it arrives. A good example is to stick only to 30% of the card limit. For those who may have a hard time keeping track of all this, it is best to put all your bills into a finance software program to monitor your expenses.

Sometimes your credit score is goes down because your lender has given you a lower limit when you know for a fact that it is much higher. To prevent this from happening, it is best to check this on a regular basis and if there is a mistake, this can easily be corrected by calling up your lender so this information can be corrected.

You should only have two credit cards so you are able to keep track when the due date is. For those who have more than two, it is best to pay them off and cancel the rest. When you only have two cards left, keep the oldest one since this is what credit bureaus look at as basis of your credit score. Keep in mind that you don’t have to use it regularly. The important thing is that it is still working.

We all make mistakes and sometimes we forget to pay our credit card bills on time. If this has only happened once, perhaps you can talk to your lender about it so he or she can remove this from your record. That way, your credit card score won’t be affected.

But if the amount isn’t that big and you refuse to pay for it because you feel that you charged unjustly, the collection agency won’t even bother to check it as this is no big deal.

The things that affect your credit score include charge offs, collections and negatives that were not yours in the first place, late payments,  low credit limits reported, accounts listed as paid as agreed, paid derogatory, paid charge off or settled, accounts listed as unpaid and lastly, negative items that have occurred over a seven period.

How to raise your credit score will not happen overnight so you have to pay your bills on time, check your credit limits and make sure previous loans have been settled. That way, there won’t be a problem when a lender conducts a background check on your credit history and your loan can be approved.