If an individual has a personal credit rating that has taken some hits over the past several years, or if the proprietor has take some financial missteps, a separate credit rating that stands for the business will give the business a fresh start for purchasing inventory, making payroll and other necessary business needs. Some ways that a new business which is set up as an LLC is to apply for credit with a bank in the name of the LLC. The bank will take into account that the owner had a bad credit history, but they will probably give the owner the benefit of the doubt and offer some kind of limited credit.
The business owner can register with Dunn and Bradstreet, a well known credit evaluation company. Registering early is a good idea because Dunn and Bradstreet keeps meticulous records of a business and if early results are positive, that fact alone can cause Dunn and Bradstreet to give the business a good promotional report, which in turn will help when asking for credit from suppliers and other vendors. A sole proprietorship, or a partnership has credit that is tied to the sole proprietor or to the partners, but a corporation or an LLC is a separate legal entity, so the credit score will be tied directly to the corporation or the LLC, and not to the owner. Once the LLC or corporation is formed, the business should open a business bank account in the name of the business. In this way all of the financial transactions of the business can be handled through the business account. All of the payments that are for items purchased on credit should be paid for out of the business bank account. The establishment of a business phone further establishes the validity of the business as a worthy credit partner, as it helps to establish the credibility of the business good resource http://dictionary.reference.com/browse/proprietor. A business credit file should be opened with all three business reporting agencies: TransUnion, Equifax and Experian should all be contacted and forms need to be filled out for those credit reporting agencies.