Improving Business Credit When Your Credit Isn’t Good

Business credit often ties directly into the owner’s personal credit history, but portions of it also apply specifically to the company itself. For an owner who’s attempting to build up business credit, but has a poor personal financial history, there are some steps worth taking.

Establish a Business Entity

The first step is to establish a business entity by incorporating the company. Then, get an EIN from the Federal Government to take on a new corporate identity. It’s that number you’ll use to establish company credit.

You’ll need to file all the appropriate documentation to file taxes and handle the rest of the regulations in your area. The business has responsibilities but also comes with benefits.

Get a Business Bank Account

Opening a business bank account will help you to establish credit and right standing with the banking industry. You’ll be more easily able to get loans in the business name with one.


A business bank account makes it easy to handle most of the routine financial requirements surrounding the enterprise. Set one up that’s convenient and affordable, and that will help your business meet its objectives.

Master Your Understanding of Credit

If you’re hoping to use business credit to your benefit successfully, you’ll need to know as much about the subject as possible. Otherwise, you may end up choosing poor account options that don’t pay off.

The terms vary significantly for different businesses and depend on your credit as the owner. It’s probably an excellent idea to start rebuilding your credit at the same time you begin to increase on the business end.

Start at the beginning and get the credit risk analysis you need instead of attempting to strategize yourself. Business credit is more sophisticated than it was the past, and it can be a challenging topic for anyone to master.

Obtain Business Credit Cards

Business credit cards will help you establish more credit quickly. They work much like personal ones do, and will require prompt repayment. These are the best way overall to build your credit history because you’ll make timely payments each month that report to the bureaus. As the on-time payments increase, companies become more comfortable lending.

The credit increases only by using it and growing the balance without missing payments. That’s why you need to make sure that the expenses help the business grow, so there’s plenty of money to pay back the loans on time. If you do, you can improve your business to nearly unlimited amounts.

Suffering from Bad Credit? 5 Tips to Recover That Credit Score

If you find that your financial history involves a foreclosure, a long string of continuous past-due payments, or accounts going to collection, your credit score probably took a major hit. However, just because you currently suffer from bad credit, you can take control to rebuild it. The five tips below can help you recover that score and begin improving your financial health.

#1 Begin the Pay Down

Begin paying down on your debt, and avoid incurring any new debt. If you find you are loaded with multiple cards, begin paying off those with the highest interest rate, while you continue to make a minimal payment on all the remaining ones. Once the card with the highest rate has been paid off, start paying down on the one that has the next highest rate. As soon as all of your credit cards are balanced to zero, your credit worthiness will begin to rise.

#2 Keep Score

It is important to know exactly what is on your credit reports to ensure they are free of errors. Any mistake can have a dramatic negative impact on your score. Dispute every obvious error by providing documentation sent directly to the credit bureau. This will allow them to promptly fix any outdated or inaccurate information.

#3 Begin Using Cash

Simply because you have credit cards does not mean you need to use them. When deep in debt, it is important to put a spending freeze on every single credit card. This will provide the ideal breathing room you need to save money to pay down your debt balances quickly.

#4 Create a Budget

Creating a budget is a quick solution to understanding what is causing you to fall deep in debt. Only purchase items and services you need and can afford. Stop wasting money eating out, watching cable TV, or paying for unnecessary cell phone service.

#5 Pay Every Bill on Time

Creating a bill payment calendar is an easy way to ensure that every bill is paid in a timely manner. Missed payments will lower your score and generate late fees, even if the payment arrives just a few days late. Set up a bill payment online through your bank. This usually free service eliminates costly mistakes.

While credit provides the opportunity to make life easier, it can create tremendous anxiety when not handled properly. When your financial trouble is overwhelming, a bankruptcy attorney Omaha firm can assist in restoring financial health to get you back on track.



Brionna Kennedy is native to the Pacific Northwest, growing up in Washington, then moving down to Oregon for college. She enjoys writing on fashion and business, but any subject will do, she loves to learn about new topics. When she isn't writing, she lives for the outdoors. Oregon has been the perfect setting to indulge her love of kayaking, rock climbing, and hiking.