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Building Personal and Business Credit

by Guest Blogger on 10-13-2009 07:44 PM - last edited on 10-15-2009 02:01 PM

The NYS SBDC Central office has been getting an inordinate number of pre-recorded phone calls lately. Many of them are apparently random-number generated and have messages that start: "We're pleased to let you know that you are eligible for our debt reduction service..." Quoting Simon & Garfunkel: "And blah, blah, blah."

Since someone has recently asked us about how to build their credit, here are some do's and don'ts.

DO establish credit by getting at least one credit card.

DO choose a credit card wisely.

DON'T, if you do get into credit difficulty, hide the overdue bills in a drawer, but rather talk with your creditors.

DO get your credit report. You can get it for free. 

DO dispute credit report errors - yes, they do make mistakes, especially if your name is common.

DON'T believe claims such as "We can erase your bad credit — 100% guaranteed".

DON'T try to hide unfavorable credit information by establishing a new credit identity, unless you are a big fan of hefty fines and prison terms.

NOW, when it comes to building BUSINESS credit, do all of the above for your PERSONAL credit, plus establish credit SEPARATE from the individual by treating business separate from oneself by:
# getting an EIN - you can do it online with the IRS
# setting up a recognized structure such as an LLC or S-Corp
# having a separate phone number (make sure it's listed!), bank account, credit card
# setting up some net 15 or net 30 accounts with your primary vendors and paying them AND the credit card off promptly
# getting a D&B D-U-N-S® Number *

There are lots of companies who will offer to sell you ways to get business credit; some of them will be telling you, or doing for you, some of these same steps. A couple recommended free guidelines from About.com can be found here * and here. *

 

*Please note: these are non-governmental sites.

Message Edited by StuartR on 10-14-2009 04:08 PM
Message Edited by nyssbdcrn on 10-15-2009 02:01 PM

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by on 10-14-2009 02:57 PM
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This was a very helpful and informative article. After reading it, I immediately went and got the latest copy of my credit report, for free. Thanks for that resource. It was helpful because I found out some things I needed to take care of.

 

I also obtained a D&B D0U-N-S no. D&B also offers a free business listing, which I also created a couple weeks ago. My business is an LLC, has its own EIN, and it's own phone.

 

I will check out the resources you posted on getting business credit.

 

Thanks,

 

Eric Bryant, Director

Gnosis Arts

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About The Industry Word
The Industry Word brings together a lineup of notable small business professionals to share their small-business expertise with Community members. The Industry Word is unique in the Business.gov Community as it includes contributions from professionals outside of government. As contributing members of the Community, guest bloggers will cover a range of topics from franchising and marketing, to technology, legal, tax and accounting. All views and opinions expressed on The Industry Word blog are those of the individual contributors and do not necessarily reflect those of the Business Gateway Program Office, the U.S. Small Business Administration, partner agencies, or the Federal government.
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  • Steven Roll is a Senior State Tax Law Editor with BNA Tax & Accounting in Arlington, Virginia.
  • Barbara is a respected corporate speaker, contributing editor, author of more than a dozen books from major publishers, sought-after expert media source, newsletter publisher and, more than ever, a trusted advocate for small business owners. Barbara is passionate about helping the small business community and fostering the entrepreneurial spirit. She enjoys serving as a true small business expert, teaching people how to start a business and expand their current enterprises.
  • Bill Gormley is a former senior federal executive. He has held a vast range of government contracting positions from Contract Specialist to Contracting Division Director to Assistant Commissioner of the General Services Administration (GSA). He is recognized by both the federal government and industry for his proven leadership, and is a frequent guest speaker at GSA-sponsored events. With years of hands-on government contracting experience, Bill now provides invaluable advice and insight to clients looking to sell their services and products to the government. You can reach Bill directly at the Washington Management Group (www.washmg.com).
  • Craig is a journalist and consultant based in Washington, D.C. Craig has contributed to a host of publications about technology and media, including the Washington Post and National Journal. His blog is called Municipalist and focuses on use of the Web by government, local and federal, to engage citizens. Craig's home site is craigcolgan.com and his consulting firm is PotomacPlanet, which he operates with his partner and wife Hilary LaMonte.
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  • Since 1990, The Libava family has been helping future entrepreneurs with their dreams of business ownership. Joel Libava, Franchise Selection Specialists Inc. 2nd generation President, brings real world franchise industry experience to his clients, coming from a franchise management background in the automobile and restaurant and hospitality industries. Joel shoots from the hip, and you'll find his unique take on the world of franchising refreshing, and sorely needed.
  • Federal Employee - Business Gateway's Financial Manager
  • The NYS Small Business Development Center Research Network has been providing reference services to the advisors of the NYS SBDC and their entrepreneurial clients since 1991. It has five full-time librarians that has . The blog can be found at sbdcrn.blogspot.com The writer of this post, Roger Green, has been at the SBDC since October 1992, after returning to graduate school in midlife. Previously, he worked as a manager of a small business - a comic book store - for eight years. He blogs pretty much daily at rogerowengreen.blogspot.com and elsewhere. He tweets very irregularly as ersie.
  • Rieva Lesonsky is CEO of GrowBiz Media (www.growbizmedia.com), which helps corporations, government agencies and other organizations identify, understand and connect with SMBs, and provides information, products, services and resources to help SMBs build their businesses. Lesonsky is also an Editor-at-Large for AllBusiness.com, a Contributing Editor for Microsoft Office Live Small Business, and a small-business blogger for The Huffington Post and can be seen regularly on MSNBC's Your Business. Lesonsky has written several books about entrepreneurship and small business. In 2009 she was named to Folio magazine’s annual Folio: 40 list of top influencers in the publishing industry.
  • Anita Campbell is the Founder and Editor in Chief of Small Business Trends, an online publication touching over 250,000 small business owners each month with news, tips, product reviews, book reviews, and trend analyses. Each week she conducts a podcast interview of a small business expert. Anita is a former corporate attorney who loves running online businesses. Her articles appear around the Web on her own publications, as well as a variety of websites where she guest writes. You can also find Anita on Twitter: @smallbiztrends
  • President and founder of Palo Alto Software, founder of bplans.com, co-founder of Borland International, author of books including 'the Plan-as-You-Go Business Plan' and '3 Weeks to Startup' (Entrepreneur Press, 2008) and conceptual author of Business Plan Pro. Baby boomer ex-hippie Stanford MBA, married 39 years, father of five.
  • As a Certified Program Planner and the Program Manager for the Manufacturing and Technology Small Business Development Center (MTSBDC) at Columbus State Community College (CSCC) I create, coordinate and promote programs and events to inspire, educate and engage individuals in our region who wish to start or grow a small business. I draw on my background in training and development, multimedia production, organizational management, marketing and communication daily to brand and market the SBDC. The SBDC, MTSBDC & ITAC (International Trade Assistance Center) provide free one-on-one business management counseling to small business owners and low to no cost training. You can also find Tonya on twitter at @TonyaWilson.
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