Why You Need Business Credit (and how to build it)

Welcome to the exciting world of business credit, where the stakes are high, the interest rates are low (if you play your cards right), and being financially focused is the name of the game. We're going to break down why establishing and building business credit is not just a suggestion—it's the secret handshake to the VIP club of favorable financing options.

(Business) Size Doesn't Matter, But Your Credit Score Does.

Alright, let's debunk the myth that only the big players need to worry about business credit. Newsflash: businesses of all sizes can (and should) flaunt their credit scores like a prized possession. Why? Because whether you're a David or a Goliath, having a good business credit score means you get better rates, better terms, and a buffet of financing options. Who wouldn't want that?

The Business Credit Free-For-All.

Now, let's address the business credit elephant in the room: It's a free-for-all. Unlike personal credit, where your secrets are safe and sound until you give the nod, business credit is like a gossip magazine that anyone can flip through without needing your VIP pass.

When someone decides to take a peek at your business credit, buckle up, because they're getting the whole package deal. Your Employer Identification Number (EIN) becomes fair game, as do your business address, email, website, and phone number. Oh, and let's not forget the pièce de résistance—your business credit reports. It's like opening up a treasure chest of information, but instead of gold doubloons, they get details about your financial credibility.

And That's the Crux: It's all about credibility.

Picture this: You walk into a lender's office with your grand business plan and dreams, only to leave with your tail between your legs because they've seen your not-so-great credit score. Or maybe you're trying to land a big client or acquire another business, but your credibility factor is shit, and they can't even be bothered to return your calls. Your business credit and credibility are what separates the wheat from the chaff. The five-star restaurant from Five Guys.The Patron El Alto Reposado from the Jose Cuervo. If you've got a job interview coming up, you wear a nice suit, right? That's what credibility and a strong credit score is like. Without it, you might as well show up in your PJs.

How does one become credible? And how do I build my credit? 

So, the good news is that it's all a little easier than you (probably) think. Begin with the basics: Name, address, phone number, 411 listing, EIN, website, email, license, bank account, etc. In short, you’re proving you're not a two-bit con man trying to run a business out of your mom's basement. (Not that you COULDN'T run it out of mom's basement, but it's not always a good look.)

From there, it's all about building credit through the different tiers of Vendor Accounts, making strategic purchases, paying your bills on time, and working your way up to credit cards and business loans. It doesn't happen overnight - you need to play the long game. But the payoff is worth its "wait" in gold. (See what we did there?)

By managing the components of your business that are on display for all to see, you're not just confirming that you're legit—you're showing you're open and ready to do business (just not in a brothel kind of way).

A Final (and maybe most important) Piece of Advice.

Now, it should be noted that doing the work and paying your bills and all that jazz is great, but that's not where your biz credit/credibility journey ends. You need to channel your inner Joe Biden and get handsy with it...or at least hands-on. That means REGULARLY check and monitor your credit reports. Because stuff happens. Mistakes are made. And the last thing you want is a mucked-up credit score when trying to secure financing. 

So, Where Do I Go From Here?

If you're looking for more info on the process of building business credibility and want a place where you can track your credit scores all in one spot (and have access to a bunch of other cool features), check out Credit Banc. It’s the simple, one-stop-shop where you can access, monitor, and share real-time data from your personal and business credit reports with, well…anyone you want to! It’s so genius we’re kind of surprised nobody thought of it sooner.