How To Build Up A Credit Rating For Your Small Business

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In the early days of a business, an entrepreneur has no choice but to rely on his personal credit rating. But if you don’t start working on a credit rating for your business right away, it won’t be there when you need it a few years down the line.

Most of the work involved in building up credit is fairly obvious–turn a profit, spend responsibly, keep your books clean.

But there are steps you can take to build a good credit score that are less straightforward. The WSJ’s Raymund Flandez explains:

Start by doing business only with vendors and suppliers that are able to report your company’s payment history to credit-reporting agencies such as Dun & Bradstreet, Experian, Small Business Financial Exchange and Cortera, Ms. Detweiler says. If possible, register with these commercial credit bureaus, which lenders check before approving loans. Also, make sure to review your business credit report at least once a year to see where your company stands.

Yves Darbouze, chief executive of Plot Multimedia LLC of New York, says he was able to secure a $100,000 equipment loan in 2007 because his digital marketing agency had a Dun & Bradstreet rating of 87 out of 100. To get that rating, Mr. Darbouze secured loans and credit cards from local gas stations and companies such as Home Depot and Dell, and consistently paid them off.

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