New entrepreneurs face a variety of obstacles to success, but few are as challenging as building business credit. Owners with poor personal payment histories are among those who can have a difficult time developing a solid FICO score for their companies. The good news is that there is a right and wrong way to develop that score, and entrepreneurs simply have to choose the right approach.
The most important thing to do is to ensure that the company is established with the appropriate structure right from its beginnings. Licensing, listed phone numbers, and similar aspects of legitimacy are important details to the agencies and bureaus that help to assign that all-important score.
Some companies may be tempted to forget about this stage of the process and try to rely upon some of those businesses that promise to allow paying clients to use their FICO scores for loan applications. In most cases, these promises are hollow and new companies simply end up paying good money without getting anything in return.
Entrepreneurs should also avoid the quick score schemes that involve paying a company to submit erroneous payment details to the bureaus. The fact is that these false data entries are invariably ferreted out by each bureau, and simply get deleted from their scoring databases.
The best and right way to build a great score is to work on developing a real payment history. This is accomplished by purchasing from vendors and others who make regular reports to the reporting agencies. Over time, these reports will develop the score that any company needs.
Nothing, however, beats a strong personal score. With that in mind, every entrepreneur should strive to bolster his personal score and company score simultaneously. When that effort is made, and these tips are followed, entrepreneurs can have a much easier time building business credit the right way.
The most important thing to do is to ensure that the company is established with the appropriate structure right from its beginnings. Licensing, listed phone numbers, and similar aspects of legitimacy are important details to the agencies and bureaus that help to assign that all-important score.
Some companies may be tempted to forget about this stage of the process and try to rely upon some of those businesses that promise to allow paying clients to use their FICO scores for loan applications. In most cases, these promises are hollow and new companies simply end up paying good money without getting anything in return.
Entrepreneurs should also avoid the quick score schemes that involve paying a company to submit erroneous payment details to the bureaus. The fact is that these false data entries are invariably ferreted out by each bureau, and simply get deleted from their scoring databases.
The best and right way to build a great score is to work on developing a real payment history. This is accomplished by purchasing from vendors and others who make regular reports to the reporting agencies. Over time, these reports will develop the score that any company needs.
Nothing, however, beats a strong personal score. With that in mind, every entrepreneur should strive to bolster his personal score and company score simultaneously. When that effort is made, and these tips are followed, entrepreneurs can have a much easier time building business credit the right way.
0 comments
Post a Comment