A strong business credit score is crucial for any business. It can help you get funding, secure lower interest rates on loans, and establish your business as a credible entity. But how do you go about building a strong business credit score? In this article, we'll walk you through the steps to take to make your business credit as strong as possible.
Should I get a business credit card?
As a business owner, you naturally want to take out loans to fund your business. In fact, the whole point of having a business is to start generating income, so it makes sense that you'd want to borrow money to do that. But what if you don't want to borrow money? What if you don't have the cash on hand to buy supplies or equipment? What if you just don't want to borrow money?
Well, that's where a business credit card can be a huge help. A business credit card is designed to be a convenient tool for businesses to borrow money, but it's also a great way to build your business credit score and get a better interest rate on loans in the future.
HOW TO FIND THE RIGHT BUSINESS CREDIT CARD FOR YOU
A business credit card is a great way to build and maintain a strong business credit score. How do you find the right one for your business?
1. Do your research.
Types of credit card business - personal or business.
The credit card that you choose will be a reflection of what type of business you have. Here’s a quick breakdown of each:
BUSINESS CREDIT CARDS
Business cards are for businesses that have a brick-and-mortar location. They are designed to reflect the business’s revenue, profit, and growth. They are typically used for small businesses and start-ups.
Credit card business requirements.
You may be thinking this is a lot of work. Here's the good news: you don't have to do it all by yourself. In fact, you will have up to five credit reporting bureaus working with you to create a well-balanced credit report.
The five major credit reporting bureaus are:
A good credit score is built from three elements:
1. Your credit history, including the number of accounts you have and the accounts' credit limits
2. Your payment history, including the length of your payment history
3. Your payment history, including the length of your payment history
Build your business credit score by getting your credit reports from each of the five major credit reporting bureaus.
What should your business credit card look like?
So you've decided that your business credit card is a good idea. Now, you're wondering what you should look for in a business credit card.
Here's what you want in a business credit card:
1. A low annual percentage rate. The APR is the annual percentage rate or the cost of the credit for the year. If you took out a $1,000 loan for a year at 12.9% APR, that would cost you $129. That same amount at a 10.9% APR would cost you $109.66
2. A low credit limit. A high credit limit is not necessarily a good thing. A high limit can be a good thing for the business. But, it can also be a bad thing. If a business card limits the credit to $5,000, then it's safe to assume that the business credit card is designed for business expenses only.
Types of commercial credit card applications.
A business credit card application is a formal request for you to be considered for a business credit card. The credit card issuer may ask you to fill out an application form and explain why you want a business credit card. The application may be completed online or by phone.
A business credit card application is different than an individual credit card application. For one thing, it's a business-specific application. A business credit card application is used to determine whether you meet the credit card issuer's business credit card criteria.
The credit card issuer may look at your individual credit history and your personal credit score to determine whether you meet the criteria for a business credit card. If you're accepted, you'll receive a letter or email that tells you how to apply for a business credit card.
If you're refused a business credit card, you can apply for a regular credit card instead.
Annual percentage rate.
First, let's talk about how you can get the best possible interest rate on your business credit card. The annual percentage rate
However, if you're using a credit card for business purposes, you can lower the APR to a much lower rate. In fact, you can have a completely free credit card that has a 0 percent APR for up to 18 months.
The number of credit cards.
We live in a day and age where we're not limited to one or two credit cards. In fact, many of us have several. So how many business credit cards should you have?
The answer is as many as you need. And that's it.
It's a simple concept. If your business credit card needs are met, you'll be able to build a strong business credit score. If your needs aren't being met, then you'll need to add more cards.
It's that simple.
THE NUMBER OF CREDIT CARDS. What's the difference between having one card and having three or four cards? It's not as simple as it sounds.
The first thing to consider is how much you're actually using the cards. You may find that you only use one credit card, but you're charged for purchases in the other two.
To find out how many cards you need, you'll need to calculate your "average daily spending."
THE NUMBER OF CREDIT CARDS. The average daily spending is the total of all your business credit card transactions divided by the number of days in a month. For example, if your average daily spending is $200, you'll need three credit cards. This is assuming that you make no purchases on the credit cards you already have.
THE NUMBER OF CREDIT CARDS. But the average daily spending can be different for different businesses. For example, a restaurant may have a higher average daily spending than an online retailer.
THE NUMBER OF CREDIT CARDS. So what should you do if you find that you're paying a higher average daily spending than you're comfortable with?