Melvin Feller Shows You How to Use Your EIN for Business Credit by Melvin Feller

Melvin Feller Shows You How to Use Your EIN for Business Credit by Melvin Feller

Melvin Feller Shows You How to Use Your EIN for Business Credit by Melvin Feller

Melvin Feller knows that a nine-digit employment identification number is approximately to businesses what a Social Security number is to individuals. To use an EIN for credit, you will need to separate your business and personal financial dealings and establish credit for the business in its own right. When using an EIN in financial dealings, reputation counts, so your business must be trustworthy. A DUNS number, issued by Dun & Bradstreet, is sometimes required along with an EIN to establish certain credit relationships. Businesses may also be asked for a TIN, or taxpayer identification number.

However, Melvin Feller describes what you will need below:

Obtain a DUNS Number

Gather basic business information, including legal name and structure, owner, year the business was established, number of employees and any “doing business as” names. You will also need the SIC code, which describes your line of business (see Resources). Contact D&B at 866–705–5711 between 7 a.m. and 8 p.m. C.S.T. on a weekday or online at fedgov.dnb.com/webform. Supply the requested business information. If calling, you will receive your nine-digit DUNS number immediately. Online requests take a business day.

Business Structure

Structure your business as an LLC or corporation rather than as a sole proprietorship to make it easier to establish credit for the EIN and business alone. Otherwise, personal credit can bleed into your business credit report.

Open a checking account for your business using the EIN. A business checking account helps separate personal and business finances.

Treat Your Vendors the Way You Want to be Treated

Your payment dealings can end up on your business credit report. Make it a point to pay before the vendor has to send you a bill. Establish credit trade accounts with several companies that offer revolving credit lines. Use your EIN when filling out applications; charge what you need and then pay the amount in full and before the due date to establish good credit. Companies like Dell, Staples and Lowe’s often work with new businesses.

Build Credit

Contact business credit bureaus to establish a business credit file. Bureaus include D&B, the Small Business Financial Exchange, Experian and Equifax.

Apply for a business credit card after you have established credit, using your EIN. If your business is new, you may need to hunt for an issuer; try small banks in your community. If you have difficulty, consider asking for a secured card, with which the issuer takes cash in advance to offset the risk.

Apply for a small loan after having established at least a year of credit worthiness attached to the EIN. Pay off the loan before melfeller Burkburnett the due date.