Opening a Business Credit File: A Step-by-Step Guide

This post was originally published on On Deck

Establishing and nurturing a small business credit profile is a crucial step toward building healthy business credit. Just like individuals have credit reports and scores, businesses have credit profiles and scores that lenders, suppliers and partners use to assess their creditworthiness. A strong credit profile can unlock opportunities for funding, favorable terms and credibility for a business. 

In this guide, we’ll explore the essential steps to create a robust small business credit profile.

How to Create a Small Business Credit Profile 1. Make sure your business is a separate legal entity and open a business bank account.

The first step toward building a small business credit profile is to ensure that your business is legally distinct from your personal finances. Registering your business as a separate legal entity, such as a Limited Liability Company (LLC) or corporation, not only protects your personal assets but also establishes credibility in the eyes of lenders and suppliers. Opening a dedicated business bank account further reinforces this separation, facilitating streamlined financial management and laying the groundwork for building business credit.

2. Apply for an Employer Identification Number (EIN).

Think of an Employer Identification Number (EIN) as the backbone of your business’s financial identity. This

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