There are significant benefits, such as better payment terms, when you maintain good business credit.
Atlanta, GA (PRWEB) October 07, 2014
C2C Resources, an Atlanta-based commercial debt collection agency, released today five steps to take to separate personal and business credit scores. With the second quarter Experian/Moody’s Analytics Small Business Credit Index report indicating business recovery, the company believes this is the perfect time for: businesses to launch and successfully build their business credit scores; and existing business owners to take control of their business credit scores.
“Separating your business and personal credit is essential when getting your business off the ground,” said Todd Tinkler, President of C2C Resources. “There are significant benefits, such as better payment terms, when you maintain good business credit.”
Tinkler believes that creditors today are moving away from relying entirely on personal credit history when assessing a business’s financial health and risk.
C2C Resources released the first five steps to take when beginning to establish a small business credit profile for new start-up companies.
1. Obtain a Federal Employer Identification Number (EIN).
An EIN is similar to a social security number for businesses. All businesses must have an EIN if they have employees or the business is operated as a partnership or a corporation. Top benefits of obtaining an EIN include:
a. Banks typically require an EIN when opening a business bank account.
b. Businesses need an EIN when applying for a business license.
c. An EIN is required when filing tax reports for federal and state taxes.
d. When doing transactions with enterprise-sized businesses, an EIN is often a requirement on their business credit application due to IRS requirements.
2. Open a Business Bank Account.
Surprisingly, many small businesses still do a majority of their banking on their personal accounts. By opening a business checking and credit accounts in the legal business name, the business can establish payment history with its financial transactions.
3. Establish a Business Phone Number.
Establishing a business phone number under the company’s legal name and having it listed in various online directories will help build trust with creditors and suppliers.
4. Open a Business Credit File.
Verify that the business is listed on Dun & Bradstreet (D&B) and Cortera. Owners can create a profile for free if the business is not listed. If listed, review the business’s D&B, Cortera and Experian reports to make sure all information is accurate.
5. Establish Lines of Credit with a Business Credit Card and Suppliers.
Opening up multiple lines of credit helps the business establish a credit record. Many creditors report this information to the various business credit companies. Opening lines of credit with suppliers can be beneficial because businesses can then use them as trade references on credit applications.
About the Small Business Credit Index:
Experian’s Business Information Services and Moody’s Analytics have been releasing the Small Business Credit Index report on a quarterly basis since 2010. The report features an in-depth analysis of the health of small business credit throughout the United States.
About C2C Resources:
C2C Resources is a global Commercial Debt Collection agency headquartered in Atlanta, Georgia. The company collects commercial debt on behalf of their over 25,000 clients and is considered one of the top agencies in the country. The executive team at C2C brings more than 60 years of experience helping businesses collect their accounts receivable.
C2Cs powerful combination of Profit Maximizer, InfoMax Collection System, and Legal Forwarding Edge, can help your company be more effective with your own in-house collecting and maximize recovery of accounts turned over for collection.