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October 3, 2024 at 5:26 pm #1056
Kikoff
KeymasterOctober 3, 2024 at 5:35 pm #1058Kikoff
KeymasterBuilding credit for an LLC can be similar to building credit for an individual.
The most important thing is consistently paying off any credit card bills, loans, or other forms of credit debt on time.
It is generally recommended that individuals keep personal and business credit separate, to simplify transactions and taxes. The most common way LLCs and other businesses begin building credit is by opening a business bank account. From there you can open a business credit card or take out a loan in your company’s name. As you make timely payments, the bank will report your payment history to the three major credit bureaus and your business will begin building credit.
These are a few tips that can help your business build credit faster.
- Always pay on time. Consistent on-time payments make up 35% of your business’s total credit, and missing a payment can have a big impact on your score.
- Keep your credit utilization low. Using less than 30% of your total credit limit is recommended; the lower the better. Avoid maxing out your business’ credit cards or using up too much available credit.
- Request a credit limit increase. Increasing your total credit limit makes it easier to maintain a low utilization rate.
Consider a business loan. Like any loan, making consistent on-time payments helps build credit, and may make your business seem like a lower risk to lenders.
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